| o      |   | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934                                                                                                                                                                                                                                                                                                                                                       |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   | OR                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| x      |   | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011                                                                                                                                                                                                                                                                                                                      |
|   |   | OR                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| o      |   | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM              TO                                                                                                                                                                                       |
|   |   | OR                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| o      |   | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934DATE OF EVENT REQUIRING THIS SHELL COMPANY REPORT                     FOR THE TRANSACTION PERIOD FORM              TO              |

----

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| Title of Each Class                                |   | Name of  Exchange On Which Registered |
|----------------------------------------------------|--------|--------------------------------------------|
| American depositary shares, each representing four |   | New York Stock Exchange                    |

----

| ordinary share, with no par value per share    |   |                    |
|------------------------------------------------|--------|-------------------------|
|                                           |   |                    |
| Ordinary shares, with no par value per share * |   | New York Stock Exchange |

| Ordinary shares, with no par value |   | 177,621,367 |
|------------------------------------|--------|-------------|

----

----

|                                                                                         |   | Page                                                       |
|----------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|
| SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS                                            |   | 1                                                          |
| CERTAIN TERMS AND CONVENTIONS                                                                |   | 2                                                          |
| PART I                                                                                       |   |                                                       |   | 3 |
| ITEM 1.                                                                                      |   | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS      |   | 3 |
| ITEM 2.                                                                                      |   | OFFER STATISTICS AND EXPECTED TIMETABLE                    |   | 3 |
| ITEM 3.                                                                                      |   | KEY INFORMATION                                            |   | 3 |
|                A. |   | SELECTED FINANCIAL DATA                                    |   | 3 |
|                B. |   | CAPITALIZATION AND INDEBTEDNESS                            |   | 6 |
|                C. |   | REASONS FOR THE OFFER AND USE OF PROCEEDS                  |   | 6 |
|                D. |   | RISK FACTORS                                               |   | 6 |
| ITEM 4.                                                                                      |   | INFORMATION ON THE COMPANY                                 |   | 27 |
|                A. |   | HISTORY AND DEVELOPMENT OF THE COMPANY                     |   | 27 |
|                B. |   | BUSINESS OVERVIEW                                          |   | 28 |
|                C. |   | ORGANIZATIONAL STRUCTURE                                   |   | 38 |
|                D. |   | PROPERTY, PLANTS AND EQUIPMENT                             |   | 39 |
| ITEM 4A.                                                                                     |   | UNRESOLVED STAFF COMMENTS                                  |   | 40 |
| ITEM 5.                                                                                      |   | OPERATING AND FINANCIAL REVIEW AND PROSPECTS               |   | 40 |
|                A. |   | OPERATING RESULTS                                          |   | 40 |
|                B. |   | LIQUIDITY AND CAPITAL RESOURCES                            |   | 63 |
|                C. |   | RESEARCH AND DEVELOPMENT                                   |   | 66 |
|                D. |   | TREND INFORMATION                                          |   | 66 |
|                E. |   | OFF-BALANCE SHEET ARRANGEMENTS                             |   | 66 |
|                F. |   | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS              |   | 66 |
|                G. |   | SAFE HARBOR                                                |   | 67 |
| ITEM 6.                                                                                      |   | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                 |   | 67 |
|                A. |   | DIRECTORS AND SENIOR MANAGEMENT                            |   | 67 |
|                B. |   | COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS           |   | 69 |
|                C. |   | BOARD PRACTICES                                            |   | 71 |
|                D. |   | EMPLOYEES                                                  |   | 72 |
|                E. |   | SHARE OWNERSHIP                                            |   | 73 |
| ITEM 7.                                                                                      |   | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS          |   | 74 |
|                A. |   | MAJOR SHAREHOLDERS                                         |   | 74 |
|                B. |   | RELATED PARTY TRANSACTIONS                                 |   | 74 |
|                C. |   | INTERESTS OF EXPERTS AND COUNSEL                           |   | 75 |
| ITEM 8.                                                                                      |   | FINANCIAL INFORMATION                                      |   | 75 |
|                A. |   | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION    |   | 75 |
|                B. |   | SIGNIFICANT CHANGES                                        |   | 75 |
| ITEM 9.                                                                                      |   | THE OFFER AND LISTING                                      |   | 75 |
|                A. |   | OFFER AND LISTING DETAILS                                  |   | 75 |
|                B. |   | PLAN OF DISTRIBUTION                                       |   | 75 |
|                C. |   | MARKETS                                                    |   | 76 |
|                D. |   | SELLING SHAREHOLDERS                                       |   | 76 |
|                E. |   | DILUTION                                                   |   | 76 |
|                F. |   | EXPENSES OF THE ISSUE                                      |   | 76 |
| ITEM 10.                                                                                     |   | ADDITIONAL INFORMATION                                     |   | 76 |
|                A. |   | SHARE CAPITAL                                              |   | 76 |
|                B. |   | MEMORANDUM AND ARTICLES OF ASSOCIATION                     |   | 76 |
|                C. |   | MATERIAL CONTRACTS                                         |   | 81 |
|                D. |   | EXCHANGE CONTROLS                                          |   | 81 |
|                E. |   | TAXATION                                                   |   | 81 |
|                F. |   | DIVIDENDS AND PAYING AGENTS                                |   | 85 |
|                G. |   | STATEMENT BY EXPERTS                                       |   | 85 |
|                H. |   | DOCUMENTS ON DISPLAY                                       |   | 86 |
|                I. |   | SUBSIDIARY INFORMATION                                     |   | 86 |
| ITEM 11.                                                                                     |   | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |   | 86 |

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| ITEM 12.                                                                                     |   | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       |   | 87 |
|----------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|----|
|                A. |   | DEBT SECURITIES                                                              |   | 87 |
|                B. |   | WARRANTS AND RIGHTS                                                          |   | 87 |
|                C. |   | OTHER SECURITIES                                                             |   | 87 |
|                D. |   | AMERICAN DEPOSITARY SHARES                                                   |   | 87 |
| PART II                                                                                      |   |                                                                         |   | 89 |
| ITEM 13.                                                                                     |   | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |   | 89 |
| ITEM 14.                                                                                     |   | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |   | 89 |
| ITEM 15.                                                                                     |   | CONTROLS AND PROCEDURES                                                      |   | 89 |
| ITEM 16.                                                                                     |   | RESERVED                                                                     |   | 91 |
| Item 16A.                                                                                    |   | AUDIT COMMITTEE FINANCIAL EXPERT                                             |   | 91 |
| Item 16B.                                                                                    |   | CODE OF ETHICS                                                               |   | 91 |
| Item 16C.                                                                                    |   | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |   | 91 |
| Item 16D.                                                                                    |   | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |   | 92 |
| Item 16E.                                                                                    |   | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       |   | 92 |
| Item 16F.                                                                                    |   | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT                           |   | 93 |
| Item 16G.                                                                                    |   | CORPORATE GOVERNANCE                                                         |   | 93 |
| Item 16H.                                                                                    |   | MINE SAFETY DISCLOSURE                                                       |   | 94 |
| PART III                                                                                     |   |                                                                         |   | 95 |
| ITEM 17.                                                                                     |   | FINANCIAL STATEMENTS                                                         |   | 95 |
| ITEM 18.                                                                                     |   | FINANCIAL STATEMENTS                                                         |   | 95 |
| ITEM 19.                                                                                     |   | EXHIBITS                                                                     |   | 95 |

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|   | · | our expansion plans;                                                            |
|--------|--------|---------------------------------------------------------------------------------|
|   |   |                                                                            |
|   | · | our anticipated growth strategy;                                                |
|   |   |                                                                            |
|   | · | our plans to recruit more employees;                                            |
|   |   |                                                                            |
|   | · | our plans to invest in research and development to enhance our service lines;   |
|   |   |                                                                            |
|   | · | our future business development, results of operations and financial condition; |
|   |   |                                                                            |
|   | · | expected changes in our net revenues and certain cost or expense items;         |
|   |   |                                                                            |
|   | · | our ability to attract and retain customers;                                    |
|   |   |                                                                            |
|   | · | trends and competition in the IT services industry; and                    |
|   |   |                                                                            |
|   | · | general economic and business conditions, particularly in China.                |

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|   | · |  “Camelot,” “we,” “us,” “our company” or “our” refers to Camelot Information Systems Inc. and its consolidated subsidiaries; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                          |
|   | · |  “China” or the “PRC” refers to the People’s Republic of China, excluding Taiwan and the special administrative regions of Hong Kong and Macau;            |
|   |   |                                                                                                                                                                                          |
|   | · | “RMB” or “Renminbi” refers to the legal currency of the PRC;                                                                                                          |
|   |   |                                                                                                                                                                                          |
|   | · |  “U.S. GAAP” or “GAAP” means accounting principles generally accepted in the United States of America; and                                                  |
|   |   |                                                                                                                                                                                          |
|   | · | “Greater China” refers to the PRC, Taiwan, the special administrative regions of Hong Kong and Macau.                                                                             |

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| ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
|---------|-------------------------------------------------------|

| ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
|---------|-----------------------------------------|

| ITEM 3. | KEY INFORMATION |
|---------|-----------------|

|   | A. | SELECTED FINANCIAL DATA |
|--------|----|-------------------------|

|                                                                                              |   | For the Year Ended December 31,                              |    |
|---------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------|
|                                                                                              |   | 2007                                                         |    |   | 2008 |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |
|                                                                                              |   | (U.S. dollars in thousands, except share and per share data) |    |
| Consolidated statements of operations data:                                                       |   |                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net revenues                                                                                      |   |                                                         | 51,380  |   |   |   | 90,772 |   |   |   | 118,003 |   |   |   | 192,863 |   |   |   | 227,120 |   |
| Cost of revenues(1)(2)                                                                       |   |                                                         | (35,620 | ) |   |   | (64,187 | ) |   |   | (81,976 | ) |   |   | (130,862 | ) |   |   | (167,520 | ) |
| Gross profit                                                                                      |   |                                                         | 15,760  |   |   |   | 26,585 |   |   |   | 36,027 |   |   |   | 62,001 |   |   |   | 59,600 |   |
| Selling and marketing expenses(1)(2)                                                         |   |                                                         | (1,796  | ) |   |   | (3,818 | ) |   |   | (6,199 | ) |   |   | (11,138 | ) |   |   | (20,263 | ) |
| General and administrative expenses(1)                                                       |   |                                                         | (5,700  | ) |   |   | (11,613 | ) |   |   | (12,627 | ) |   |   | (21,605 | ) |   |   | (45,065 | ) |
| Research and development costs                                                                    |   |                                                         | — |   |   |   | (1,705 | ) |   |   | (1,496 | ) |   |   | (2,741 | ) |   |   | (5,956 | ) |
| Postponed initial public offering costs                                                           |   |                                                         | — |   |   |   | (2,457 | ) |   |   | — |   |   |   | — |   |   |   | — |   |
| Impairment of Intangible Assets                                                                   |   |                                                         | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (8,552 | ) |
| Impairment of Goodwill                                                                            |   |                                                         | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | (21,457 | ) |
| Changes in fair value of contingent consideration for acquisitions of Agree, Tansun and Dimension |   |                                                         | — |   |   |   | — |   |   |   | (549 | ) |   |   | (3,880 | ) |   |   | (1,669 | ) |
| Total operating expenses                                                                          |   |                                                         | (7,496  | ) |   |   | (19,593 | ) |   |   | (20,871 | ) |   |   | (39,364 | ) |   |   | (102,962 | ) |
| Government subsidies                                                                              |   |                                                         | 27      |   |   |   | — |   |   |   | 56 |   |   |   | 123 |   |   |   | 255 |   |
| Income (Loss) from operations                                                                     |   |                                                         | 8,291   |   |   |   | 6,992 |   |   |   | 15,212 |   |   |   | 22,760 |   |   |   | (43,107 | ) |
| Interest expense                                                                                  |   |                                                         | (6      | ) |   |   | (310 | ) |   |   | (96 | ) |   |   | (475 | ) |   |   | (935 | ) |
| Interest income                                                                                   |   |                                                         | 396     |   |   |   | 244 |   |   |   | 118 |   |   |   | 498 |   |   |   | 1,194 |   |
| Dividend income from short term investment                                                        |   |                                                         | — |   |   |   | 11 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Gain/(loss) on short-term investment                                                              |   |                                                         | — |   |   |   | (115 | ) |   |   | 44 |   |   |   | — |   |   |   | — |   |
| Gain from extinguishment of liability                                                             |   |                                                         | — |   |   |   | 3,926 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Income (Loss) before provisions for income taxes                                                  |   |                                                         | 8,681   |   |   |   | 10,748 |   |   |   | 15,278 |   |   |   | 22,783 |   |   |   | (42,848 | ) |
| Provisions for income taxes                                                                       |   |                                                         | (1,374  | ) |   |   | (1,400 | ) |   |   | (2,241 | ) |   |   | (4,100 | ) |   |   | 1,791 |   |
| Equity in earnings/(loss) of an affiliate, net of income taxes                                    |   |                                                         | 6       |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Net income (Loss)                                                                                 |   |                                                         | 7,313   |   |   |   | 9,348 |   |   |   | 13,037 |   |   |   | 18,683 |   |   |   | (41,057 | ) |
| Less: Net (loss)/income attributable to non- controlling interest                                 |   |                                                         | — |   |   |   | (66 | ) |   |   | (71 | ) |   |   | (86 | ) |   |   | 233 |   |
| Net income (loss) attributable to Camelot Information Systems Inc(3)                              |   |                                                         | 7,313   |   |   |   | 9,282 |   |   |   | 12,966 |   |   |   | 18,597 |   |   |   | (40,824 | ) |

----

| Net income per share attributable to shareholders of Camelot Information Systems Inc.     |   |   |        |   |   |   |        |   |   |   |        |   |   |   |        |
|-------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|-------------|
| Basic-ordinary shares                                                                     |   |   | 0.06        |   |   |   | 0.07        |   |   |   | 0.10        |   |   |   | 0.12        |   |   |   | (0.23 | ) |
| Diluted-ordinary shares                                                                   |   |   | 0.06        |   |   |   | 0.07        |   |   |   | 0.10        |   |   |   | 0.11        |   |   |   | (0.23 | ) |
| Net income(loss) per ADS attributable to shareholders of Camelot Information Systems Inc. |   |   |        |   |   |   |        |   |   |   |        |   |   |   |        |   |   |   |   |   |
|     Basic-ADSs                                                             |   |   | 0.26        |   |   |   | 0.30        |   |   |   | 0.40        |   |   |   | 0.48        |   |   |   | (0.91 | ) |
| Diluted-ADSs                                                                              |   |   | 0.26        |   |   |   | 0.29        |   |   |   | 0.39        |   |   |   | 0.45        |   |   |   | (0.91 | ) |
|                                                                                      |   |   |        |   |   |   |        |   |   |   |        |   |   |   |        |   |   |   |   |   |
| Weighted average shares used in calculating net income per share                          |   |   |        |   |   |   |        |   |   |   |        |   |   |   |        |   |   |   |   |   |
| Basic-ordinary shares                                                                     |   |   | 73,691,478  |   |   |   | 77,394,257  |   |   |   | 82,035,859  |   |   |   | 128,663,415 |   |   |   | 179,954,056 |   |
| Diluted-ordinary shares                                                                   |   |   | 114,516,885 |   |   |   | 127,587,315 |   |   |   | 133,017,168 |   |   |   | 165,258,030 |   |   |   | 179,954,056 |   |
| Weighted average shares used in calculating net income per ADSs                           |   |   |        |   |   |   |        |   |   |   |        |   |   |   |        |   |   |   |   |   |
|  Basic-ADSs                                                                          |   |   | 18,422,870  |   |   |   | 19,348,564  |   |   |   | 20,508,965  |   |   |   | 32,165,854  |   |   |   | 44,998,514 |   |
|  Diluted-ADSs                                                                        |   |   | 28,629,221  |   |   |   | 31,896,829  |   |   |   | 33,254,292  |   |   |   | 41,314,508  |   |   |   | 44,998,514 |   |

| (1) Includes the following amounts of share-based compensation expenses for the years indicated: |
|---------------------------------------------------------------------------------------------------------|

|                                    |   | For the Year Ended December 31, |   |
|-----------------------------------------|--------|---------------------------------|--------|
|                                    |   | 2007                            |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |
|                                    |   | (U.S. dollars in thousands)     |   |
| Cost of revenues                        |   |                            | 89     |   |   |   | 130 |   |   |   | 147 |   |   |   | 136 |   |   |   | 1,463 |   |
| Selling and marketing                   |   |                            | 55     |   |   |   | 94 |   |   |   | 158 |   |   |   | 354 |   |   |   | 7,427 |   |
| General and administrative              |   |                            | 355    |   |   |   | 852 |   |   |   | 938 |   |   |   | 2,434 |   |   |   | 10,476 |   |
| Total share-based compensation expenses |   |                            | 499    |   |   |   | 1,076 |   |   |   | 1,243 |   |   |   | 2,924 |   |   |   | 19,366 |   |

| (2) Includes the following amounts of amortization expense related to intangible assets acquired for business combination for the years indicated: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                       |   | For the Year Ended December 31, |   |
|------------------------------------------------------------|--------|---------------------------------|--------|
|                                                       |   | 2007                            |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |
|                                                       |   | (U.S. dollars in thousands)     |   |
| Cost of revenues                                           |   |                            | 8      |   |   |   | 360 |   |   |   | 440 |   |   |   | 1,776 |   |   |   | 1,594 |   |
| Selling and marketing expenses                             |   |                            | 946    |   |   |   | 2,372 |   |   |   | 3,224 |   |   |   | 4,332 |   |   |   | 3,213 |   |
| General and administrative expenses                        |   |                            | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 278 |   |
| Total acquisition-related intangible amortization expenses |   |                            | 954    |   |   |   | 2,732 |   |   |   | 3,664 |   |   |   | 6,108 |   |   |   | 5,085 |   |

----

|                                                                           |   | For the Year Ended December 31, |   |
|--------------------------------------------------------------------------------|--------|---------------------------------|--------|
|                                                                           |   | 2007                            |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |
|                                                                           |   | (U.S. dollars in thousands)     |   |
| Net income (loss) attributable to Camelot Information Systems Inc. (U.S. GAAP) |   |                            | 7,313  |   |   |   | 9,282 |   |   |   | 12,966 |   |   |   | 18,597 |   |   |   | (40,824 | ) |

| Share-based compensation                                               |   |   | 499   |   |   |   | 1,076  |   |   |   | 1,243  |   |   |   | 2,924  |   |   |   | 19,366 |   |
|------------------------------------------------------------------------|--------|--------|-------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Acquisition-related intangible amortization                            |   |   | 954   |   |   |   | 2,732  |   |   |   | 3,664  |   |   |   | 6,108  |   |   |   | 5,085  |   |
| Gain from extinguishment of liability                                  |   |   | -     |   |   |   | (3,926 | )      |   |   | -      |   |   |   | -      |   |   |   | -      |   |
| Postponed initial public offering costs                                |   |   | -     |   |   |   | 2,457  |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |
| Impairment of Intangible Assets                                        |   |   | -     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 8,552  |   |
| Impairment of Goodwill                                                 |   |   | -     |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 21,457 |   |
| Changes in fair value of contingent consideration                      |   |   | -     |   |   |   | -      |   |   |   | 549    |   |   |   | 3,880  |   |   |   | 1,669  |   |
| Total non-GAAP adjustments                                             |   |   | 1,453 |   |   |   | 2,339  |   |   |   | 5,456  |   |   |   | 12,912 |   |   |   | 56,129 |   |
| Net income attributable to Camelot Information Systems Inc. (non-GAAP) |   |   | 8,766 |   |   |   | 11,621 |   |   |   | 18,422 |   |   |   | 31,509 |   |   |   | 15,305 |   |

|                             |   | As of December 31,          |   |
|----------------------------------|--------|-----------------------------|--------|
|                             |   | 2007                        |   |   | 2008 |   |   | 2009 |   |   | 2010 |   |   | 2011 |   |
|                             |   | (U.S. dollars in thousands) |   |
| Consolidated balance sheet data: |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents        |   |                        | 18,851 |   |   |   | 22,916 |   |   |   | 33,820 |   |   |   | 140,356 |   |   |   | 57,128 |   |
| Term deposit                     |   |                        | 337    |   |   |   | - |   |   |   | 299 |   |   |   | 160 |   |   |   | 45,318 |   |
| Total assets                     |   |                        | 72,352 |   |   |   | 118,905 |   |   |   | 191,267 |   |   |   | 341,465 |   |   |   | 315,396 |   |
| Total liabilities                |   |                        | 12,162 |   |   |   | 32,412 |   |   |   | 75,310 |   |   |   | 88,188 |   |   |   | 83,308 |   |
| Total equity                     |   |                        | 60,190 |   |   |   | 86,493 |   |   |   | 115,957 |   |   |   | 253,277 |   |   |   | 232,088 |   |
| Total liabilities and equity     |   |                        | 72,352 |   |   |   | 118,905 |   |   |   | 191,267 |   |   |   | 341,465 |   |   |   | 315,396 |   |

|   |   | Noon Buying Rate |   |
|--------|--------|------------------|--------|
| Period |   | Period End       |   |   | Average(l) |   |   | Low |   |   | High |   |
|   |   | (RMBper$1.00)    |   |
|   |   |             |   |   |   |   |   |   |   |   |   |   |
| 2007   |   |             | 7.2946 |   |   |   | 7.5806 |   |   |   | 7.2946 |   |   |   | 7.8127 |   |
| 2008   |   |             | 6.8225 |   |   |   | 6.9193 |   |   |   | 6.7800 |   |   |   | 7.2946 |   |
| 2009   |   |             | 6.8259 |   |   |   | 6.8295 |   |   |   | 6.8176 |   |   |   | 6.8470 |   |
| 2010   |   |             | 6.6000 |   |   |   | 6.7603 |   |   |   | 6.6000 |   |   |   | 6.8330 |   |
| 2011   |   |             | 6.2939 |   |   |   | 6.4475 |   |   |   | 6.2939 |   |   |   | 6.6364 |   |

----

|       October  |   |   | 6.3547 |   |   |   | 6.3710 |   |   |   | 6.3534 |   |   |   | 6.3825 |   |
|----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|       November |   |   | 6.3765 |   |   |   | 6.3564 |   |   |   | 6.3400 |   |   |   | 6.3839 |   |
| December                                     |   |   | 6.2939 |   |   |   | 6.3482 |   |   |   | 6.2939 |   |   |   | 6.3733 |   |
| 2012                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January                                      |   |   | 6.3080 |   |   |   | 6.3172 |   |   |   | 6.2940 |   |   |   | 6.3330 |   |
| February                                     |   |   | 6.2935 |   |   |   | 6.2997 |   |   |   | 6.2935 |   |   |   | 6.3120 |   |
| March                                        |   |   | 6.2975 |   |   |   | 6.3125 |   |   |   | 6.2975 |   |   |   | 6.3315 |   |
| April (through April 20)                     |   | 6.3080 |   |   | 6.3052 |   |   | 6.2975 |   |   | 6.3150 |   |

| (1) | Annual averages are calculated using the average of month-end rates of the relevant year. Monthly averages are issued by G.5 statistical release of Federal Reserve Board, except April of 2012, which is calculated by using the average of daily rates during the relent period. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | B. | CAPITALIZATION AND INDEBTEDNESS |
|--------|----|---------------------------------|

|   | C. | REASONS FOR THE OFFER AND USE OF PROCEEDS |
|--------|----|-------------------------------------------|

|   | D. | RISK FACTORS |
|--------|----|--------------|

----

----

|   | · | Termination.  The initial term is four years and can be renewed by IBM for one or more years with substantially the same terms and conditions. The technical services agreement may be terminated |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   | at an earlier date upon the occurrence of certain events, including, among others, a change of control, liquidation or bankruptcy of our company, and a failure by us to meet certain service standards.                                                                                                                                                                                                                                                                                                                                                       |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Non-compete undertaking.  We have agreed not to compete with IBM, in the field of SAP consulting services, for any existing or future business opportunity from IBM’s existing customers that is either continual or relating to any services provided by us under the technical services agreement. However, such non-compete undertaking does not apply to our existing customers. Our non-compete undertaking is effective throughout the term of the master SOW and for a period of 18 months following the termination of the master SOW. |

----

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|   | · | recruiting, training and retaining sufficient skilled technical, marketing and management personnel;                                                              |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                              |
|   | · | adhering to our high quality and process execution standards;                                                                                                     |
|   |   |                                                                                                                                                              |
|   | · | preserving our culture, values and entrepreneurial environment;                                                                                                   |
|   |   |                                                                                                                                                              |
|   | · | developing and improving our internal administrative infrastructure, particularly our financial, operational, communications and other internal systems; and |
|   |   |                                                                                                                                                              |
|   | · | maintaining high levels of customer satisfaction.                                                                                                                 |

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|   | · | actual or anticipated fluctuations in our quarterly operating results; |
|--------|--------|------------------------------------------------------------------------|
|   |   |                                                                   |
|   | · | changes in financial estimates by securities research analysts;        |

----

|   | · | announcements by us or our competitors of new services, acquisitions, strategic partnerships, joint ventures or capital commitments; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                 |
|   | · | technological breakthroughs in the IT services industry;                                                                             |
|   |   |                                                                                                                                 |
|   | · | potential litigation or administrative investigations;                                                                               |
|   |   |                                                                                                                                 |
|   | · | addition or departure of key personnel;                                                                                              |
|   |   |                                                                                                                                 |
|   | · | fluctuations in the exchange rate between the U.S. dollar and Renminbi;                                                         |
|   |   |                                                                                                                                 |
|   | · | release or expiry of lock-up or other transfer restrictions on our outstanding ordinary shares or ADSs;                              |
|   |   |                                                                                                                                 |
|   | · | sales or perceived sales of additional ordinary shares or ADSs;                                                                 |
|   |   |                                                                                                                                 |
|   | · | general market conditions or other developments affecting us or our industry; and                                                    |
|   |   |                                                                                                                                 |
|   | · | negative market perception and media coverage of our company or other companies in the same or similar industry with us.             |

|   | · | investors’ perception of, and demand for, securities of IT service solutions providers; |
|--------|--------|-----------------------------------------------------------------------------------------------|
|   |   |                                                                                          |
|   | · | conditions of the U.S. and other capital markets in which we may seek to raise funds;    |
|   |   |                                                                                          |
|   | · | our future results of operations, financial condition and cash flows;                         |
|   |   |                                                                                          |
|   | · | governmental regulations of foreign investment in China or other jurisdictions;               |
|   |   |                                                                                          |
|   | · | economic, political and other conditions in China and other jurisdictions; and           |
|   |   |                                                                                          |
|   | · | PRC governmental policies relating to foreign currency borrowings.                            |

|   | · | further develop or enhance our customer base;                 |
|--------|--------|---------------------------------------------------------------|
|   |   |                                                          |
|   | · | acquire necessary technologies, products or businesses;       |
|   |   |                                                          |
|   | · | expand operations in China and elsewhere;                     |
|   |   |                                                          |
|   | · | hire, train and retain employees;                             |
|   |   |                                                          |
|   | · | market our software solutions, services and products; or |

----

|   | · | respond to competitive pressures or unanticipated capital requirements. |
|--------|--------|-------------------------------------------------------------------------|

|   | · | we have failed to timely provide the depositary with notice of meeting and related voting materials;               |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                               |
|   | · | we have instructed the depositary that we do not wish a discretionary proxy to be given;                           |
|   |   |                                                                                                               |
|   | · | we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; |
|   |   |                                                                                                               |
|   | · | a matter to be voted on at the meeting would have a material adverse impact on shareholders; or               |
|   |   |                                                                                                               |
|   | · | the voting at the meeting is to be made on a show of hands.                                                        |

----

----

| ITEM 4. | INFORMATION ON THE COMPANY |
|---------|----------------------------|

|   | A.     | HISTORY AND DEVELOPMENT OF THE COMPANY |
|--------|--------|----------------------------------------|
|   |   |                                   |

----

|   | B. | BUSINESS OVERVIEW |
|--------|----|-------------------|

----

|   | · | enterprise application services, or EAS, which primarily consist of (i) packaged software services for leading ERP software packages, and (ii) software development and maintenance services; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                             |
|   | · | financial industry IT services, or FIS, which primarily consist of software solutions, system support and maintenance, as well as IT consulting services for the financial industry.                             |

|                            |   | For the Year Ended December 31,                 |    |
|---------------------------------|--------|-------------------------------------------------|---------|
|                            |   | 2009                                            |    |   | 2010 |   |   | 2011 |   |
|                            |   | Amount                                          |    |   | % of Total |   |   | Amount |   |   | % of Total |   |   | Amount |   |   | % of Total |   |
|                            |   | (U.S. dollars in thousands, except percentages) |    |
| Enterprise application services |   |                                            | 79,423  |   |   |   | 67.3 |   |   |   | 126,555 |   |   |   | 65.6 |   |   |   | 159,181 |   |   |   | 70.1 |   |
| Financial industry IT services  |   |                                            | 38,580  |   |   |   | 32.7 |   |   |   | 66,308 |   |   |   | 34.4 |   |   |   | 67,939 |   |   |   | 29.9 |   |
| Total net revenues              |   |                                            | 118,003 |   |   |   | 100.0 |   |   |   | 192,863 |   |   |   | 100.0 |   |   |   | 227,120 |   |   |   | 100.0 |   |

----

|   | · | Packaged Software Integration.  We work with providers of packaged software to install and integrate these packages with our customers’ existing computer systems and with various Internet applications to meet the individual needs of our customers. ERP systems are built with the purpose of tightly integrating processes within an enterprise such as planning, manufacturing, sales, marketing, inventory control, customer service, finance and human resources. Our ERP integration services enable these systems to communicate with each other as well as the organization’s data warehouse, any custom-developed enterprise systems or legacy applications. Our integration services help our customers manage cost by reducing or eliminating duplicate data entry and time spent reconciling discrepancies between different systems. Our ERP integration services also enable our customers to streamline business processes and improve data access in support of data-based decision making. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | · | Solution Design.  Our professionals assist our customers in the design of application configuration options, detailed business procedure documentation, customized extensions, interfaces and data conversions. In addition, we help our customers identify process and organizational changes required for the implementation of ERP systems.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | · | Technical Configuration and Customization.  We provide configuration services to customers to match the ERP software package with the customers’ existing business processes. Further, we provide customization services to extend the use of the ERP system or change its use by creating customized interfaces and underlying application code.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | · | Training.  In connection with the implementation of a system, we provide training to the various members of the customer’s staff, such as network specialists and end-users to help them acquire the required ERP application knowledge and skills.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | · | Project Management.  We provide customer side project management for IT projects, starting from defining the scope, quality, time and cost considerations of the projects. For the duration of the projects, we provide systematic controlling, risk management, quality assurance and sub-contractor management. Our experts have the required IT specific knowledge on managing complex projects and achieving project goals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | · | Quality Assurance and Testing.  We assist our customers in planning, scripting, executing and monitoring system and stress tests to see if the expectations of the end customers, defined in service level agreements, will be met. For each particular customer, we focus on developing a framework for ongoing testing in order to seek continuous improvement in the predictability of our customer’s internal systems.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|   | · | Maintenance and production support.  We provide maintenance services for our customers’ ERP and other large software systems that cover a wide range of technologies and businesses. Our approach to software maintenance focuses on long-term functionality, stability and preventive maintenance. This approach, coupled with our quality processes, allows our customers to reduce recurring maintenance costs. We generally perform maintenance work at our development centers using secure and redundant communication links to our customers’ systems. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | · | Infrastructure management.  To address our customers’ specific requests to provide infrastructure and technology support, we provide solutions and services which range from routine maintenance of software to complex security solutions. Our services include administration, infrastructure management, migration, upgrades, configuration, backup, security management, performance management, operations monitoring and consolidation services for a variety of operating systems and platforms.                                                             |

----

|   | · | intermediary business solutions for commercial banks, including teller/counter systems, channel management solutions, payment and settlement solutions, and front end communication exchange midware; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                  |
|   | · | key function systems for commercial banks, including corporate loan, commercial loan, supply chain financing, cash management, as well as internal collaboration and workflow                         |
|   |   |                                                                                                                                                                                                  |
|   | · | check image processing services for commercial banks;                                                                                                                                                 |
|   |   |                                                                                                                                                                                                  |
|   | · | core life insurance solutions;                                                                                                                                                                        |
|   |   |                                                                                                                                                                                                  |
|   | · | risk management and anti-money laundering systems for banks;                                                                                                                                          |
|   |   |                                                                                                                                                                                                  |
|   | · | application localization and customization;                                                                                                                                                           |
|   |   |                                                                                                                                                                                                  |
|   | · | data transformation and verification; and                                                                                                                                                             |
|   |   |                                                                                                                                                                                                  |
|   | · | help desk support and production support.                                                                                                                                                             |

----

|   | · | maintenance of core banking systems, international banking systems, mutual fund systems, and credit card systems;                       |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                    |
|   | · | system installation and customization;                                                                                                  |
|   |   |                                                                                                                                    |
|   | · | system performance health check and investigation of performance issues;                                                                |
|   |   |                                                                                                                                    |
|   | · | system performance tuning;                                                                                                              |
|   |   |                                                                                                                                    |
|   | · | evaluation of longer-term capacity needs and recommendations on the architecture of new applications based on performance expectations; |
|   |   |                                                                                                                                    |
|   | · | system and application emergency support;                                                                                               |
|   |   |                                                                                                                                    |
|   | · | installation and maintenance of performance measurement tools; and                                                                      |
|   |   |                                                                                                                                    |
|   | · | installation and maintenance of program temporary fix packages.                                                                         |

|   | · | business process re-engineering;           |
|--------|--------|--------------------------------------------|
|   |   |                                       |
|   | · | Basel II risk management;                  |
|   |   |                                       |
|   | · | customer relationship management;          |
|   |   |                                       |
|   | · | financial services logical data model; and |
|   |   |                                       |
|   | · | system conversion/cut-over.                |

----

|           |   | For the Year Ended December 31,                 |    |
|----------------|--------|-------------------------------------------------|---------|
|           |   | 2009                                            |    |   | 2010 |   |   | 2011 |   |
|           |   | Amount                                          |    |   | % of Total |   |   | Amount |   |   | % of Total |   |   | Amount |   |   | % of Total |   |
|           |   | (U.S. dollars in thousands, except percentages) |    |
| PRC and Taiwan |   |                                            | 105,567 |   |   |   | 89.4 |   |   |   | 175,860 |   |   |   | 91.1 |   |   |   | 204,112 |   |   |   | 89.9 |   |
| Japan          |   |                                            | 11,642  |   |   |   | 9.9 |   |   |   | 14,663 |   |   |   | 7.7 |   |   |   | 21,120 |   |   |   | 9.3 |   |
| Others         |   |                                            | 794     |   |   |   | 0.7 |   |   |   | 2,340 |   |   |   | 1.2 |   |   |   | 1,888 |   |   |   | 0.8 |   |

| Total net revenues |   |   | 118,003 |   |   |   | 100.0 |   |   |   | 192,863 |   |   |   | 100.0 |   |   |   | 227, 120 |   |   |   | 100.0 |   |
|--------------------|--------|--------|---------|--------|--------|--------|-------|--------|--------|--------|---------|--------|--------|--------|-------|--------|--------|--------|----------|--------|--------|--------|-------|--------|

|                                   |   | For the Year Ended December 31,                 |    |
|----------------------------------------|--------|-------------------------------------------------|---------|
|                                   |   | 2009                                            |    |   | 2010 |   |   | 2011 |   |
|                                   |   | Amount                                          |    |   | % of Total |   |   | Amount |   |   | % of Total |   |   | Amount |   |   | % of Total |   |
|                                   |   | (U.S. dollars in thousands, except percentages) |    |
| Financial services                     |   |                                            | 41,276  |   |   |   | 35.0 |   |   |   | 69,950 |   |   |   | 36.2 |   |   |   | 66,350 |   |   |   | 29.2 |   |
| Resources and energy                   |   |                                            | 28,256  |   |   |   | 23.9 |   |   |   | 41,413 |   |   |   | 21.5 |   |   |   | 42,794 |   |   |   | 18.8 |   |
| Manufacturing and automobile           |   |                                            | 20,139  |   |   |   | 17.1 |   |   |   | 34,003 |   |   |   | 17.6 |   |   |   | 39,213 |   |   |   | 17.2 |   |
| Technology                             |   |                                            | 12,153  |   |   |   | 10.3 |   |   |   | 20,947 |   |   |   | 10.8 |   |   |   | 27,178 |   |   |   | 12.0 |   |
| Telecommunication, media and education |   |                                            | 4,346   |   |   |   | 3.7 |   |   |   | 6,778 |   |   |   | 3.6 |   |   |   | 13,563 |   |   |   | 6.0 |   |
| Construction and steel                 |   |                                            | 3,949   |   |   |   | 3.3 |   |   |   | 7,530 |   |   |   | 3.9 |   |   |   | 5,402 |   |   |   | 2.4 |   |
| Retail, consumer and transportation    |   |                                            | 6,558   |   |   |   | 5.6 |   |   |   | 5,420 |   |   |   | 2.8 |   |   |   | 8,821 |   |   |   | 3.9 |   |
| Others                                 |   |                                            | 1,326   |   |   |   | 1.1 |   |   |   | 6,822 |   |   |   | 3.6 |   |   |   | 23,799 |   |   |   | 10.5 |   |
| Total net revenues                     |   |                                            | 118,003 |   |   |   | 100.0 |   |   |   | 192,863 |   |   |   | 100.0 |   |   |   | 227,120 |   |   |   | 100.0 |   |

----

|   | · | 3 Days Purchase Demand Priority. Subject to the accomplishment of IBM’s internal process and system setting, for technical service subcontracting demand of IBM 's application service business line (the scope of which will defined by IBM solely), IBM will provide us a purchase demand 3 days before it provides such purchase demand to other technical service suppliers. IBM reserves the right to change or cancel such 3 days priority, in the event we materially breach the renewed technical services agreement.      |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Term and Termination. The initial term was four years and can be renewed by IBM for one or more years with substantially the same terms and conditions. The technical services agreement may be terminated at an earlier date upon the occurrence of certain events, including, among others, a change of control, liquidation or bankruptcy of our company, and a failure by us to meet certain service standards.                                                                                                                           |
|   | · | Non-Compete Undertaking. We have agreed not to compete with IBM, in the field of SAP consulting services, for any existing or future business opportunity from IBM’s existing customers that is either continual or relating to any services provided by us under the technical service agreement. However, such non-compete undertaking does not apply to our existing customers. Our non-compete undertaking is effective throughout the term of the master SOW and for a period of 18 months following the termination of the master SOW. |

|                                                                                                                                                                                                   | As of December 31, 2011    |   | Services and Solutions Provided |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|--------|---------------------------------|
|                                                                                                                                                                                                   | Number of IT Professionals |   | % of Total                      |   |   |
| Beijing                                          | 1,968                      |   | 49.0                            |   | all service lines |
| Shanghai                                         | 396                        |   | 9.9                             |   | all service lines |
| Dalian                                      | 482                        |   | 12.0                            |   | enterprise application services |
| Taipei                                      | 153                        |   | 3.8                             |   | financial industry IT services |
| Zhuhai                                      | 189                        |   | 4.7                             |   | financial industry IT services |
| Jiaxing                                     | 26                         |   | 0.6                             |   | enterprise application services |
| Tokyo                                       | 40                         |   | 1.0                             |   | enterprise application services |
| Nanjing                                     | 20                         |   | 0.5                             |   | enterprise application services |
| Xiamen                                      | 227                        |   | 5.7                             |   | financial industry IT services |
| Kunshan                                                                                                                                                                                                | 436                        |   | 10.8                            |   | enterprise application services |
| Wuxi                                                                                                                                                                                                   | 80          |   | 2.0                             |   | enterprise application services |
|     Total                              | 4,017                      |   | 100.0                           |   |   |

----

----

----

----

|   | C. | ORGANIZATIONAL STRUCTURE |
|--------|----|--------------------------|

----

|   | D. | PROPERTY, PLANTS AND EQUIPMENT |
|--------|----|--------------------------------|

|  Location   |   | Type of Ownership |   | Approximate Size of Space |
|------------------|--------|-------------------|--------|---------------------------|
|             |   |              |   | (Square meters)           |
| Beijing, PRC     |   | leased            |   | 6,912                     |
| Beijing, PRC     |   | owned             |   | 748                       |
| Kunshan, PRC     |   | leased            |   | 3,256                     |
| Xiamen, PRC      |   | owned             |   | 1,611                     |
| Dalian, PRC      |   | leased            |   | 3,374                     |
| Taipei, Taiwan   |   | leased            |   | 1,494                     |
| Nanjing, PRC     |   | leased            |   | 436                       |
| Taichung, Taiwan |   | leased            |   | 406                       |
| Shanghai, PRC    |   | leased            |   | 933                       |
| Zhuhai, PRC      |   | leased            |   | 81                        |

----

| Jiaxing, PRC      |   | leased |   | 266    |
|-------------------|--------|--------|--------|--------|
| Shenzhen, PRC     |   | leased |   | 876    |
| Kaohsiung, Taiwan |   | leased |   | 97     |
| Hongkong, PRC     |   | leased |   | 44     |
| Tokyo, Japan      |   | leased |   | 29     |
| Wuxi, PRC         |   | leased |   | 1,594  |
| Total space       |   |   |   | 22,157 |

| ITEM 4A. | UNRESOLVED STAFF COMMENTS |
|----------|---------------------------|

| ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
|---------|----------------------------------------------|
|    |                                         |

|   | A. | OPERATING RESULTS |
|--------|----|-------------------|

|   | · | Productivity and utilization.  The changes in productivity and utilization of our professionals are affected by the number and size of customer engagements, the timing of the commencement, completion and termination of engagements, billing rates of our professionals, and our ability to transition our professionals efficiently from completed engagements to new engagements. A key indicator we use to assess the productivity and utilization of our professionals is net revenues per employee, which is calculated based on the simple average number of employees at the beginning and end of each period, totaled approximately US$48,000,  US$58,600 and US$53,800, for 2009, 2010 and 2011, respectively. To enhance productivity and utilization of our professionals, we have increased the use of outsourcing services and are cautious in hiring permanent employees. Billing rates of our professionals have remained relatively stable in recent years and are expected to |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   | continue to remain relatively stable for the foreseeable future. The productivity and utilization of our professionals will continue to affect our net revenues, gross profit and net income in the future.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | · | Customer diversity.  In recent years, as we have expanded significantly in the financial industry IT services business, we have diversified our customer base. While we are seeking out new customers in both of our service lines, we intend to continue to enhance our strategic relationships and address the needs of our existing customers. The gain or loss of significant customers, or any significant change in the business volume from a particular customer will affect our operating performance. In particular, we have maintained a strong relationship with IBM for the past 14 years. IBM has been our largest customer in 2009, 2010 and 2011, accounting for 31.6%, 33.7% and 34.1% of our net revenues, respectively.  As part of our cooperation with IBM, we have entered into a number of initiatives, including the joint development of a service delivery center in March 2008, focused on enterprise application software and services. Our net revenues derived from this delivery center totaled US$15.7 million in 2009, US$36.5 million in 2010 and US$47.4 million in 2011, or 13.3%, 18.9% and 20.9% of our total net revenues, respectively. As this delivery center becomes more successful, we expect IBM to continue to be our largest customer and the net revenues contribution from IBM may increase even as we intend to continue to diversify our customer base.                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | · | Acquisitions.  As part of our growth strategy, we make, and plan to continue to make, strategic acquisitions from time to time to complement our existing business. We identify potential acquisition targets based on a variety of factors, such as the target’s profitability, growth potential, customer base, business and portfolio mix, domain expertise, shared management vision, and our ability to integrate the target’s business with our existing business. In recent years, our acquisitions (including those of VLife, Yinfeng, Harmonation, Agree and Tansun) have been primarily in the financial industry IT services area, which we believe will experience significant growth as banks continue to modernize their IT infrastructure. Although these acquisitions have helped us increase our net revenues and maintain our gross margins, they have also contributed to an increase in the absolute amounts of our operating expenses, which were US$20.9 million, US$39.4 million and US$102.9 million (including US$30.0 million impairment loss on intangible assets and impairment loss on goodwill) in 2009, 2010 and 2011, respectively. In addition, in light of the number of acquisitions we have made in recent years, our acquisition-related intangible amortization expenses have significantly affected our net income. As we continue to pursue acquisition opportunities in the future, our operating results and other aspects of our financial performance will be affected accordingly. |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | · | Quality, range and delivery of services.  We intend to increase our net revenues by continuing to expand our service offerings and providing quality service to our existing customers and to attract new customers. As a result, our financial results are affected by the market demand for our services, the amount of which is significantly dependent on the quality, range and delivery of our services as well as our industry expertise compared to those of our competitors. In particular, as part of our strategy, we will continue to expand our service offerings to provide high quality end-to-end solutions of customized software, onsite and offsite services, training and maintenance. Our acquisitions of Agree and Tansun are part of this effort in expanding our financial industry IT services business. The market acceptance of these services and our ability to attract new customers based on the offering of these services will affect our operating results. To expand our delivery channels, we are seeking to enter into additional cooperative programs with leading IT service providers, and build alternative delivery models (such as a remote delivery model) for our services. Our ability to expand into these additional delivery channels will affect the growth prospects of our business.                                                                                                                                                                                                              |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | · | Ability and related costs incurred to attract, retain and motivate qualified employees.  Our ability to attract, train and retain a large and cost-effective pool of qualified professionals, including our ability to leverage and expand our proprietary database of qualified IT professionals, to develop additional joint training programs with universities, and our employees’ job satisfaction, will affect our financial performance. We have incurred significant costs, and plan to incur additional costs in the future, to attract qualified professionals to work for us. Our compensation and benefits expenses for our IT professionals totaled US$29.4 million, US$39.0 million and US$63.5 million for 2009, 2010 and 2011, respectively, which reflected 24.9%, 20.2% and 28.0% of our net revenues, respectively. These costs have included share-based compensation expenses of US$147,000, US$136,000 and US$1,463,000 for share options granted to our IT professionals for the years ended December 31, 2009, 2010 and 2011, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

|                            |   | For the Year Ended December 31,                 |    |
|---------------------------------|--------|-------------------------------------------------|---------|
|                            |   | 2009                                            |    |   | 2010 |   |   | 2011 |   |
|                            |   | Amount                                          |    |   | % of Total |   |   | Amount |   |   | % of Total |   |   | Amount |   |   | % of Total |   |
|                            |   | (U.S. dollars in thousands, except percentages) |    |
| Enterprise application services |   |                                            | 79,423  |   |   |   | 67.3 |   |   |   | 126,555 |   |   |   | 65.6 |   |   |   | 159,181 |   |   |   | 70.1 |   |
| Financial industry IT services  |   |                                            | 38,580  |   |   |   | 32.7 |   |   |   | 66,308 |   |   |   | 34.4 |   |   |   | 67,939 |   |   |   | 29.9 |   |
| Total net revenues              |   |                                            | 118,003 |   |   |   | 100.0 |   |   |   | 192,863 |   |   |   | 100.0 |   |   |   | 227,120 |   |   |   | 100.0 |   |

|                       |   | For the Year Ended December 31,                 |    |
|----------------------------|--------|-------------------------------------------------|---------|
|                       |   | 2009                                            |    |   | 2010 |   |   | 2011 |   |
|                       |   | Amount                                          |    |   | % of Total |   |   | Amount |   |   | % of Total |   |   | Amount |   |   | % of Total |   |
|                       |   | (U.S. dollars in thousands, except percentages) |    |
| Time-and-expense contracts |   |                                            | 59,667  |   |   |   | 50.6 |   |   |   | 99,071 |   |   |   | 51.4 |   |   |   | 121,762 |   |   |   | 53.6 |   |
| Fixed-price contracts      |   |                                            | 58,336  |   |   |   | 49.4 |   |   |   | 93,792 |   |   |   | 48.6 |   |   |   | 105,358 |   |   |   | 46.4 |   |
| Total net revenues         |   |                                            | 118,003 |   |   |   | 100.0 |   |   |   | 192,863 |   |   |   | 100.0 |   |   |   | 227,120 |   |   |   | 100.0 |   |

|           |   | For the Year Ended December 31,                 |   |
|----------------|--------|-------------------------------------------------|--------|
|           |   | 2009                                            |   |   | 2010 |   |   | 2011 |   |
|           |   | Amount                                          |   |   | % of Total |   |   | Amount |   |   | % of Total |   |   | Amount |   |   | % of Total |   |
|           |   | (U.S. dollars in thousands, except percentages) |   |
| Single largest |   |                                            | 37,315 |   |   |   | 31.6 |   |   |   | 64,987 |   |   |   | 33.7 |   |   |   | 77,387 |   |   |   | 34.1 |   |
| Five largest   |   |                                            | 57,869 |   |   |   | 49.0 |   |   |   | 92,974 |   |   |   | 48.2 |   |   |   | 121,211 |   |   |   | 53.4 |   |
| Ten largest    |   |                                            | 74,325 |   |   |   | 63.0 |   |   |   | 115,456 |   |   |   | 59.9 |   |   |   | 155,193 |   |   |   | 68.3 |   |

----

|                                   |   | For the Year Ended December 31,                 |    |
|----------------------------------------|--------|-------------------------------------------------|---------|
|                                   |   | 2009                                            |    |   | 2010 |   |   | 2011 |   |
|                                   |   | Amount                                          |    |   | % of Total |   |   | Amount |   |   | % of Total |   |   | Amount |   |   | % of Total |   |
|                                   |   | (U.S. dollars in thousands, except percentages) |    |
| Financial services                     |   |                                            | 41,276  |   |   |   | 35.0 |   |   |   | 69,950 |   |   |   | 36.2 |   |   |   | 66,350 |   |   |   | 29.2 |   |
| Resources and energy                   |   |                                            | 28,256  |   |   |   | 23.9 |   |   |   | 41,413 |   |   |   | 21.5 |   |   |   | 42,794 |   |   |   | 18.8 |   |
| Manufacturing and automobile           |   |                                            | 20,139  |   |   |   | 17.1 |   |   |   | 34,003 |   |   |   | 17.6 |   |   |   | 39,213 |   |   |   | 17.2 |   |
| Technology                             |   |                                            | 12,153  |   |   |   | 10.3 |   |   |   | 20,947 |   |   |   | 10.8 |   |   |   | 27,178 |   |   |   | 12.0 |   |
| Telecommunication, media and education |   |                                            | 4,346   |   |   |   | 3.7 |   |   |   | 6,778 |   |   |   | 3.6 |   |   |   | 13,563 |   |   |   | 6.0 |   |
| Construction and steel                 |   |                                            | 3,949   |   |   |   | 3.3 |   |   |   | 7,530 |   |   |   | 3.9 |   |   |   | 5,402 |   |   |   | 2.4 |   |
| Retail, consumer and transportation    |   |                                            | 6,558   |   |   |   | 5.6 |   |   |   | 5,420 |   |   |   | 2.8 |   |   |   | 8,821 |   |   |   | 3.9 |   |
| Others                                 |   |                                            | 1,326   |   |   |   | 1.1 |   |   |   | 6,822 |   |   |   | 3.6 |   |   |   | 23,799 |   |   |   | 10.5 |   |
| Total net revenues                     |   |                                            | 118,003 |   |   |   | 100.0 |   |   |   | 192,863 |   |   |   | 100.0 |   |   |   | 227,120 |   |   |   | 100.0 |   |

|               |   | For the Year Ended December 31,                 |    |
|--------------------|--------|-------------------------------------------------|---------|
|               |   | 2009                                            |    |   | 2010 |   |   | 2011 |   |
|               |   | Amount                                          |    |   | % of Total |   |   | Amount |   |   | % of Total |   |   | Amount |   |   | % of Total |   |
|               |   | (U.S. dollars in thousands, except percentages) |    |
| PRC and Taiwan     |   |                                            | 105,567 |   |   |   | 89.4 |   |   |   | 175,860 |   |   |   | 91.1 |   |   |   | 204,112 |   |   |   | 89.9 |   |
| Japan              |   |                                            | 11,642  |   |   |   | 9.9 |   |   |   | 14,663 |   |   |   | 7.7 |   |   |   | 21,120 |   |   |   | 9.3 |   |
| Others             |   |                                            | 794     |   |   |   | 0.7 |   |   |   | 2,340 |   |   |   | 1.2 |   |   |   | 1,888 |   |   |   | 0.8 |   |
| Total net revenues |   |                                            | 118,003 |   |   |   | 100.0 |   |   |   | 192,863 |   |   |   | 100.0 |   |   |   | 227,120 |   |   |   | 100.0 |   |

|                              |   | For the Year Ended December 31,                 |   |
|-----------------------------------|--------|-------------------------------------------------|--------|
|                              |   | 2009                                            |   |   | 2010 |   |   | 2011 |   |
|                              |   | Amount                                          |   |   | % of Total |   |   | Amount |   |   | % of Total |   |   | Amount |   |   | % of Total |   |
|                              |   | (U.S. dollars in thousands, except percentages) |   |
| Outsourcing costs                 |   |                                            | 29,593 |   |   |   | 36.1 |   |   |   | 66,906 |   |   |   | 51.2 |   |   |   | 79,714 |   |   |   | 47.6 |   |
| Compensation and benefit expenses |   |                                            | 29,364 |   |   |   | 35.8 |   |   |   | 38,908 |   |   |   | 29.8 |   |   |   | 63,327 |   |   |   | 37.8 |   |
| Travel expenses                   |   |                                            | 12,584 |   |   |   | 15.4 |   |   |   | 11,353 |   |   |   | 8.7 |   |   |   | 10,945 |   |   |   | 6.5 |   |
| Material costs                    |   |                                            | 7,122  |   |   |   | 8.7 |   |   |   | 8,860 |   |   |   | 6.8 |   |   |   | 6,955 |   |   |   | 4.2 |   |
| Others                            |   |                                            | 3,313  |   |   |   | 4.0 |   |   |   | 4,835 |   |   |   | 3.5 |   |   |   | 6,579 |   |   |   | 3.9 |   |
| Total cost of revenues            |   |                                            | 81,976 |   |   |   | 100.0 |   |   |   | 130,862 |   |   |   | 100.0 |   |   |   | 167,520 |   |   |   | 100.0 |   |

----

----

|                                    |   | For the Year Ended December 31, |   |
|-----------------------------------------|--------|---------------------------------|--------|
|                                    |   | 2009                            |   |   | 2010 |   |   | 2011 |   |
|                                    |   | (U.S. dollars in thousands)     |   |
| Cost of revenues                        |   |                            | 147    |   |   |   | 136 |   |   |   | 1,463 |   |
| Selling and marketing expenses          |   |                            | 158    |   |   |   | 354 |   |   |   | 7,427 |   |
| General and administrative expenses     |   |                            | 938    |   |   |   | 2,434 |   |   |   | 10,476 |   |
| Total share-based compensation expenses |   |                            | 1,243  |   |   |   | 2,924 |   |   |   | 19,366 |   |

|                        |   | Years ended December 31,               |   |
|-----------------------------|--------|----------------------------------------|--------|
|                        |   | 2009                                   |   |   | 2010 |   |   | 2011 |   |
|                        |   |  U.S.dollars in thousands) |   |
| Current                     |   |                                   |   |
| PRC                         |   |                                   | 1,780  |   |   |   | 5,224 |   |   |   | 2,269 |   |
| Others                      |   |                                   | 1,199  |   |   |   | 200 |   |   |   | - |   |
| Total current income taxes  |   |                                   | 2,979  |   |   |   | 5,424 |   |   |   | 2,269 |   |
| Deferred                    |   |                                   |   |   |   |   |   |   |   |   |   |   |
| PRC                         |   |                                   | (558   | ) |   |   | (1,276 | ) |   |   | (3,031 | ) |
| Others                      |   |                                   | (180   | ) |   |   | (48 | ) |   |   | (1,029 | ) |
| Total deferred income taxes |   |                                   | (738   | ) |   |   | (1,324 | ) |   |   | (4,060 | ) |
| Total income taxes          |   |                                   | 2,241  |   |   |   | 4,100 |   |   |   | (1,791 | ) |

----

| Subsidiaries     |   | 0%        |   | 10%    |   | 12.5%     |   | 15%         |   | 20%    |   | 22%    |   | 24%    |
|------------------|--------|-----------|--------|--------|--------|-----------|--------|-------------|--------|--------|--------|--------|--------|--------|
|             |   |      |   |   |   |      |   |        |   |   |   |   |   |   |
| Camelot Beijing  |   | -         |   | -      |   | -         |   | 2009 - 2013 |   | -      |   | -      |   | -      |
| Red River Valley |   | -         |   | -      |   | -         |   | 2009 - 2013 |   | -      |   | -      |   | -      |
| Yinfeng          |   | -         |   | -      |   | -         |   | 2009 - 2013 |   | -      |   | -      |   | -      |
| Agree Zhuhai     |   | -         |   | -      |   | -         |   | 2009 - 2013 |   | -      |   | -      |   | -      |
| Tansun Beijing   |   | -         |   | -      |   | -         |   | 2009 - 2011 |   | -      |   | -      |   | -      |
| Faceita          |   | -         |   | -      |   | -         |   | 2009 - 2011 |   | -      |   | -      |   | -      |
| Bayshore         |   | -         |   | -      |   | -         |   | 2009 - 2011 |   | -      |   | -      |   | -      |
| Dimension        |   | -         |   | -      |   | -         |   | 2011-2013   |   | -      |   | -      |   | -      |
| Jiaxing Camelot  |   | 2009      |   | -      |   | 2010-2012 |   | -           |   | -      |   | -      |   | -      |
| Shanghai Camelot |   | -         |   | 2009   |   | -         |   | -           |   | -      |   | 2010   |   | 2011   |
| Asialink         |   | -         |   | -      |   | -         |   | -           |   | 2009   |   | 2010   |   | 2011   |
| Dalian Yuandong  |   | -         |   | 2009   |   | 2010-2011 |   | -           |   | -      |   | -      |   | -      |
| Agree Shanghai   |   | 2010-2011 |   | -      |   | 2012-2014 |   | -           |   | -      |   | -      |   | -      |
| Huaqiao          |   | 2010-2011 |   | -      |   | 2012-2014 |   | -           |   | -      |   | -      |   | -      |
| Kunshan          |   | 2011-2012 |   | -      |   | 2013-2015 |   | -           |   | -      |   | -      |   | -      |
| Beijing Heng En  |   |      |   | 2011   |   |      |   |        |   |   |   |   |   |   |

----

----

|                                                                                             |   | For the Year Ended December 31,                 |    |
|--------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|
|                                                                                             |   | 2009                                            |    |   | 2010 |   |   | 2011 |   |
|                                                                                             |   | Amount                                          |    |   | % of NetRevenues |   |   | Amount |   |   | % of NetRevenues |   |   | Amount |   |   | % of NetRevenues |   |
|                                                                                             |   | (U.S. dollars in thousands, except percentages) |    |
| Net revenues                                                                                     |   |                                            | 118,003 |   |   |   | 100.0 | % |   |   | 192,863 |   |   |   | 100.0 | % |   |   | 227,120 |   |   |   | 100.0 | % |
| Cost of revenues                                                                                 |   |                                            | (81,976 | ) |   |   | (69.5 | )% |   |   | (130,862 | ) |   |   | (67.9 | )% |   |   | (167,520 | ) |   |   | (73.8 | %) |
| Gross profit                                                                                     |   |                                            | 36,027  |   |   |   | 30.5 | % |   |   | 62,001 |   |   |   | 32.1 | % |   |   | 59,600 |   |   |   | 26.2 | % |
| Selling and marketing expenses                                                                   |   |                                            | (6,199  | ) |   |   | (5.3 | )% |   |   | (11,138 | ) |   |   | (5.8 | )% |   |   | (20,263 | ) |   |   | (8.9 | %) |
| General and administrative expenses                                                              |   |                                            | (12,627 | ) |   |   | (10.7 | )% |   |   | (21,605 | ) |   |   | (11.2 | )% |   |   | (45,065 | ) |   |   | (19.8 | %) |
| Research and development costs                                                                   |   |                                            | (1,496  | ) |   |   | (1.3 | )% |   |   | (2,741 | ) |   |   | (1.4 | )% |   |   | (5,956 | ) |   |   | (2.6 | %) |
| Postponed initial public offering costs                                                          |   |                                            | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Impairment of Intangible Assets                                                                  |   |                                            | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (8,552 | ) |   |   | (3.8 | %) |
| Impairment of Goodwill                                                                           |   |                                            | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (21,457 | ) |   |   | (9.5 | %) |
| Changes in fair value of contingent consideration for acquisition of Agree, Tansun and Dimension |   |                                            | (549    | ) |   |   | (0.5 | )% |   |   | (3,880 | ) |   |   | (2.0 | )% |   |   | (1,669 | ) |   |   | (0.7 | %) |
| Total operating expenses                                                                         |   |                                            | (20,871 | ) |   |   | (17.7 | )% |   |   | (39,364 | ) |   |   | (20.4 | )% |   |   | (102,962 | ) |   |   | (45.3 | %) |
| Government subsidies                                                                             |   |                                            | 56      |   |   |   | 0.0 | % |   |   | 123 |   |   |   | 0.1 | % |   |   | 255 |   |   |   | 0.1 | % |
| Income (loss) from operations                                                                    |   |                                            | 15,212  |   |   |   | 12.9 | % |   |   | 22,760 |   |   |   | 11.8 | % |   |   | (43,107 | ) |   |   | (19.0 | %) |
| Interest expense                                                                                 |   |                                            | (96     | ) |   |   | (0.1 | )% |   |   | (475 | ) |   |   | (0.2 | )% |   |   | (935 | ) |   |   | (0.4 | %) |
| Interest income                                                                                  |   |                                            | 118     |   |   |   | 0.1 | % |   |   | 498 |   |   |   | 0.2 | % |   |   | 1,194 |   |   |   | 0.5 | % |
| Dividend income from short(term) investment                                                      |   |                                            | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Gain on short term investment                                                                    |   |                                            | 44      |   |   |   | 0.0 | % |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Gain from extinguishment of liability                                                            |   |                                            | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Income (loss) before provisions for income taxes                                                 |   |                                            | 15,278  |   |   |   | 12.9 | % |   |   | 22,783 |   |   |   | 11.8 | % |   |   | (42,848 | ) |   |   | (18.9 | %) |
| Provisions for income taxes                                                                      |   |                                            | (2,241  | ) |   |   | (1.9 | )% |   |   | (4,100 | ) |   |   | (2.1 | )% |   |   | 1,791 |   |   |   | 0.8 | % |
| Equity in earnings of an affiliate, net of income taxes                                          |   |                                            | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Net income (loss)                                                                                |   |                                            | 13,037  |   |   |   | 11.0 | % |   |   | 18,683 |   |   |   | 9.7 | % |   |   | (41,057 | ) |   |   | (18.1 | %) |
| Less: Net (loss) income attributable to non (controlling interest                                |   |                                            | (71     | ) |   |   | (0.1 | )% |   |   | (86 | ) |   |   | 0.0 | % |   |   | 233 |   |   |   | 0.1 | % |
| Net income (loss) attributable to Camelot Information Systems Inc.                               |   |                                            | 12,966  |   |   |   | 11.0 | % |   |   | 18,597 |   |   |   | 9.7 | % |   |   | (40,824 | ) |   |   | (18.0 | %) |

----

|   | • | an increase in outsourcing costs from US$66.9 million for the year ended December 31, 2010 to US$79.7 million for the year ended December 31, 2011, as we increased the use of independent consultants directly and other subcontracted service providers, whom we directly engaged and paid, to supplement our resources in light of a higher than anticipated recovery in the demand for our services, coupled with our conservative view in the hiring of permanent employees; and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | • | an increase in compensation and benefit expenses from US$38.9 million for the year ended December 31, 2010 to US$63.3 million for the year ended December 31, 2011, reflecting a combination of the increase in the share-based compensation and an organic increase in our recruitment of IT professionals.                                                                                                                                                                          |

----

----

|   | • | amortization of intangible assets from our acquisitions of Agree and Tansun; |
|--------|---------|------------------------------------------------------------------------------|
|   |    |                                                                         |
|   | • | an increase in employees compensation; and                                   |
|   |    |                                                                         |
|   | • | the sales and marketing expenses incurred by Agree and Tansun.               |

----

----

----

----

| Reporting Unit                                                                                                                        |   | Enterprise Application Services                 |    |   | Financial Industry IT Services |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|--------|--------------------------------|--------|
|                                                                                                                                  |   | (U.S. dollars in thousands, except percentages) |    |
|                                                                                                                                  |   | September 30                                    |    |   | December 31                    |   |   | September 30 |   |   | December 31 |   |
| Estimated fair value                                                                                                                  |   |                                            | 185,481 |   |                           |   | 147,762 |   |   |   | 66,792 |   |   |   | 77,535 |   |
| Carrying value (after impairment loss recorded)                                                                                       |   |                                            | 118,346 |   |                           |   | 134,252 |   |   |   | 59,245 |   |   |   | 62,269 |   |
| Percentage by which the fair value exceed the carrying value                                                                          |   |                                            | 57      | %      |                           |   | 10 | % |   |   | 13 | % |   |   | 25 | % |
| The amount of goodwill allocated to the reporting units (after impairment loss recorded)                                              |   |                                            | 22,288  |   |                           |   | 22,574 |   |   |   | 5,353 |   |   |   | 5,424 |   |
| Discount rates as a measure of risk and uncertainty associated with the key assumptions of projected cash flow of our reporting units |   |                                            | 20      | %      |                           |   | 20 | % |   |   | 21 | % |   |   | 21 | % |

----

| Date                  |   | Class of Shares       |   | Fair Value    |   | Purpose of Valuation                                                             |   | DLOM*     |   | Discount Rate |
|-----------------------|--------|-----------------------|--------|---------------|--------|----------------------------------------------------------------------------------|--------|-----------|--------|---------------|
| January 1, 2006  |   | Ordinary Shares  |   | US$0.61  |   | Acquisition of Dalian Yuandong                                              |   | 28%  |   | 28%      |
| June 30, 2006         |   | Ordinary Shares       |   | US$0.55       |   | Employee share option grant                                                      |   | 13%       |   | 27.5%         |
| June 30, 2007         |   | Ordinary Shares       |   | US$0.86       |   | Employee share option grant                                                      |   | 10%       |   | 25%           |
| October 15, 2007      |   | Ordinary Shares       |   | US$1.01       |   | Employee share option grant                                                      |   | 10%       |   | 23%           |
| April 1, 2008         |   | Ordinary Shares       |   | US$1.22       |   | Acquisition of VLife and Yinfeng and employee share option grant                 |   | 14%       |   | 19%           |
|                  |   |                  |   |          |   |                                                                             |   |      |   |          |
| July 1, 2008          |   | Ordinary Shares       |   | US$1.44       |   | Acquisition of Harmonation and extinguishment of liability with Red River Valley |   | 15%       |   | 19%           |
| October 31, 2008      |   | Ordinary Shares       |   | US$1.11       |   | Employee share option grant                                                      |   | 15%       |   | 19%           |
| July 1, 2009          |   | Ordinary Shares       |   | US$1.25       |   | Employee share option grant and acquisition of Agree                             |   | 15%       |   | 19%           |
| November 2, 2009      |   | Ordinary Shares       |   | US$1.27       |   | Employee share option grant                                                      |   | 15%       |   | 19%           |
| December 30, 2009     |   | Ordinary Shares       |   | US$1.47       |   | Acquisition of Tansun                                                            |   | 15%       |   | 18%           |
| February 28, 2010     |   | Ordinary Shares       |   | US$3.03       |   | Employee share option grant                                                      |   | 5%        |   | 14%           |
|  May 18, 2010    |   | Ordinary Shares       |   | US$3.00       |   | Employee share option grant                                                      |   | N/A       |   | N/A           |

|   | • | Relative importance of DCF and market multiple approach: For the valuations in 2006, 2007 and April  2008, we assigned 50% weight to the DCF approach and 50% weight to market multiples as we considered the results derived from these approaches at these valuation dates were equally representative. Since July 2008, the credit crunch caused a sharp decline in market capitalization of the publicly traded comparable companies while our operations and long term cash flow forecast had not changed significantly over the same period. In view of this, we considered the income approach should be more reliable than the market approach in determining the fair values of our company at that time, and assigned 85% weight to the income approach and 15% weight to the market approach for the valuations performed in July 2008 to February 2010. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | • | Weighted average cost of capital, or WACC: WACCs of 28%, 27.5%, 25%, 23%, 19%, 19%, 19%, 19%, 19%, 18% and 14% were used for dates as of January 1, 2006, June 30, 2006, June 30, 2007, October 15, 2007, April 1, 2008, July 1, 2008, October 31, 2008, July 1, 2009, November 2, 2009, December 30, 2009 and February 28, 2010, respectively. The WACCs were determined based on a consideration of the factors including risk-free rate, comparative industry risk, equity risk premium, company size and company- specific factors. The decrease in WACCs from 2006 to 2010 was due to the combined results of (i) the continuous growth of our business and company size, realization of synergistic effects through the acquisitions of Triumph, Bayshore, Dalian Yuandong, Hwawei, Red River Valley, Yingfeng, VLife, Harmonation, Agree and Tansun and (ii) the proximity to our initial public offering. Decrease in WACC used for the valuation resulted in an increase in the determined fair value of the ordinary shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | • | Comparable companies: In deriving the WACCs, which are used as the discount rates under the income approach, and market multiples, certain publicly traded companies in the software outsourcing industry were selected for reference as our guideline companies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | • | Capital market valuation multiples: AA obtained and assessed updated capital market data of the selected comparable companies and used multiples of enterprise value to revenue, or EV/Revenue, and enterprise value to EBITDA, or EV/EBITDA, for its valuations. EV/Revenue multiples adopted in the valuation were 3.3, 3.0, 3.2, 2.7, 2.0 2.5, 1.5, 1.4, 1.9, 1.7 and 2.6, respectively, for January 1, 2006, June 30, 2006, June 30, 2007, October 15, 2007, April 1, 2008, July 1, 2008, October 31, 2008, July 1, 2009, November 2, 2009, December 30, 2009, and February 28, 2010. EV/EBITDA multiples adopted in the valuation were 13.9, 12.4, 13.4, 12.0, 10.2 14.0, 8.5, 7.3, 10.2, 13.2 and 12.9, respectively, for January 1, 2006, June 30, 2006, June 30, 2007, October 15, 2007, April 1, 2008, July 1, 2008, October 31, 2008, July 1, 2009, November 2, 2009, December 30, 2009 and February 28, 2010. The changes in the multiples used for each valuation date are the combined effects of (i) change in the valuation date and thus the period considered in calculating the multiples and (ii) changes in the trading prices and thus the multiples of the comparable companies as implied by the trading prices. Change in the figure of multiples used combined with an increase in our reported financial measures increased the determined fair value of the ordinary shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | • | Discount for lack of marketability, or DLOM: AA quantified DLOM using the Black-Scholes option pricing model. Under this option-pricing method, the cost of the put option, which can hedge the price change before the privately held shares can be sold, was considered as a basis to determine the DLOM. This option pricing method is one of the methods commonly used in estimating DLOM as it can take into consideration factors like timing of a liquidity event (e.g., an IPO) and estimated volatility of our shares. The farther the valuation date is from an expected liquidity event, the higher the put option value and thus the higher the implied DLOM. DLOMs of range from 10% to 28% were used in our valuations as of January 1, 2006, June 30, 2006, June 30, 2007, October 15, 2007, April 1, 2008, July 1, 2008, October 31, 2008, July 1, 2009, November 2, 2009, December 30, 2009, and February 28, 2010. The lower DLOM is used for the valuation, the higher is the determined fair value of the ordinary shares. In the third quarter of 2007, we started the preparation for our initial public offering and performed valuations to appraise the fair values of our ordinary shares in 2006 and 2007 on a retrospective basis for compliance with U.S. GAAP. Because of the proximity of the expected time of the offering, DLOM decreased from 28% for the valuation as of January 1, 2006 to 10% for the valuation as of October 15, 2007. In 2008, the global financial crisis increased the uncertainty and volatility of U.S. stock market and the increase in estimated volatility factor of our ordinary shares, together with the increase in expected time leading to liquidity event (i.e. IPO), increased the DLOM from 10% for the valuation as of October 15, 2007 to 15% for the valuation in July 2008 and 2009. As we successfully submitted our confidential filing in February 2010 in connection with our initial public offering, we expected that the time leading to liquidity event (i.e., IPO) would decrease and the liquidity of our ordinary shares would increase. As a result, we lowered the DLOM from 15% as of December 31, 2009 to 5% as of February 28, 2010. |

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|   | • | the overall economic growth in our principal geographic markets led to an increased market demand for our IT services;                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | • | we completed the acquisition of Hwawei on January 1, 2007, which expanded our service lines to Taiwan financial IT services market; and                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | • | In April 2007, CVCI Funds’ exercise of their option to subscribe additional Series A preferred shares indicated that the uncertainty and risk perceived by investors in achieving our business plan was reduced. Accordingly, the discount rates, which reflect the market participant’s required rate of return, was lowered from 27.5% for the valuation on June 30, 2006 to 25% for the valuation on June 30, 2007. This resulted in an increase in our overall equity value and hence an increase in the estimated fair value of our ordinary shares. |

|   | • | We anticipated that, as a result of global financial crisis, our customers may reduce or technology spending, which in turn reduce the demand for our services and slow down our revenue growth rate. In view of the above, we lowered our forecasted revenue and earnings in 2008 and 2009 when |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   | preparing financial projection for valuation as of July 1, 2008 and October 31, 2008 to account for the change in market condition; and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | • | The impact of global financial crisis on our business was partially offset by the estimated synergetic effect brought by the acquisition of Harmonation in July 2008. We believed that this acquisition will create additional synergetic effect because the integration of the businesses of Harmonation, VLife and Hwawei will further strengthen our market position in Taiwan FIS market and increase our service offering. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | We completed the acquisition of Agree on July 1, 2009, which strengthened our capabilities of our financial IT services; and                                                                                                                                                                                 |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                         |
|   | • | We anticipated that the demand for our technology outsourcing services would gradually increase in connection with the recovery of the global economic conditions. In view of this, we increased the long term forecasted revenue and net income, when preparing our cash flow forecasts as of July 1, 2009. |

|   | • | The growth of China’s IT service industry grew at a higher rate in the three months ended March 31, 2010 than we anticipated by the end of 2009 as increased competition among Chinese businesses led to (i) an increase in IT service spending as part of overall IT spending; and (ii) continued consolidation of a relatively fragmented IT service industry.                                                                                                                                  |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | • | Instances of the successful implementation of our integration plans for our acquired businesses strengthened our confidence in, and increased our estimates for, future revenues through capitalizing on cross-selling opportunities across various customers, industries and geographic regions. For example, when preparing our forecast in December 2009, we only had (i) a preliminary integration plan for Tansun (which included cross-selling efforts among Tansun and our other business units) |

----

|   |   | and (ii) initial discussions with Tansun's management team on the budget for 2010. As such, the impact of these cross-selling efforts and the determination of the 2010 budget were not factored into the forecast in December 2009 due to the uncertainties in the implementation of Tansun’ s integration plan given that the acquisition of Tansun was only completed at the end of December 2009. Since the beginning of 2010, however, we have begun to realize revenue synergies sooner than we had anticipated at the end of 2009. As an example, Bayshore successfully referred clients to, and facilitated customers’ communication with, Tansun, which resulted in Tansun winning a testing service contract from one of the state-owned banks in China in the three months ended March 31, 2010. This result was not anticipated by the end of 2009. Winning this service contract served as an indicator for the successful implementation of our integration plan. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | In the three months ended March 31, 2010, we identified additional synergies from business unit integration efforts, such as office consolidation and centralization of solution development work.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | • | In the three months ended March 31, 2010, we also gained a number of key new clients in our EAS business, which was not anticipated in December 2009. These clients include (i) the SOFTBANK Group Development Center, through which our work with SOFTBANK Group in the development of communication technologies is performed; (ii) Pacific Andes International Holdings Ltd, which engaged us as its SAP global implementation services provider and has become one of the top clients of our EAS business; and (iii) Ernst & Young, which engaged us as a SAP services provider and has become one of our strategic alliance partners. Revenues from these new clients were not included in our forecast in December 2009. |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | • | Commercial banks in China generally review their annual IT budgets during the first quarter of each year. After this review by the commercial banks in China in the three months ended March 31, 2010, the IT spending budget from the banking sector for the full year 2010 exhibited a growth which was higher than our expectations at the end of 2009.                                                                                                                                                                                                                                                                                                                                                                         |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | • | During the three months ended March 31, 2010, our FIS business units obtained additional customer feedback in respect of their new solution requirements and their receptiveness to a number of our enhanced products, including products on stress testing on market risks, auditing, and branch transformation. None of these factors was anticipated and therefore included in the December 2009 forecast, and forms a backdrop for the upward revision to our forecast.                                                                                                                                                                                                                                                        |

----

|   | • | the price range was estimated assuming our initial public offering would be successfully completed, which would result in increased liquidity and marketability of our ordinary shares; and |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                        |
|   | • | our initial public offering could provide us with additional capital, enhance our ability to access capital markets to grow our business, and raise our overall business profile.           |

|                                              | 2009    |   | 2010    |   | 2011    |
|---------------------------------------------------|---------|--------|---------|--------|---------|
| Weighted average risk-free interest rate          | 4.04%   |   | 1.49%   |   | 1.35%   |
| Weighted average expected term (number of years)  | 5.8     |   | 1.4     |   | 2.2     |
| Weighted average expected volatility              | 42.7%   |   | 41.1%   |   | 45.5%   |
| Weighted average expected dividend yield          | — |   | — |   | — |
| Weighted fair value of underlying ordinary shares | 1.26    |   | 2.90    |   | 1.01    |

----

|   | · | Highest-and-best-use and valuation-premise concepts for nonfinancial assets—the guidance indicates that the highest-and-best-use and valuation-premise concepts only apply to measuring the fair value of nonfinancial assets.                                                                                                                                                                                                                                                                                                                                                                         |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Application to financial assets and financial liabilities with offsetting positions in market risks or counterparty credit risk—the guidance permits an exception to fair value measurement principles for financial assets and financial liabilities (and derivatives) with offsetting positions in market risks or counterparty credit risk when several criteria are met. When the criteria are met, an entity can measure the fair value of the net risk position.                                                                                                                                 |
|   | · | Premiums or discounts in fair value measure—the guidance provides that premiums or discounts that reflect size as a characteristic of the reporting entity’s holding (specifically, a blockage factor that adjusts the quoted price of an asset or a liability because the market’s normal daily trading volume is not sufficient to absorb the quantity held by the entity) rather than as a characteristic of the asset or liability (for example, a control premium when measuring  the fair value of a controlling interest) are not permitted in a fair value measurement.  |
|   | · | Fair value of an instrument classified in a reporting entity’s stockholders’ equity—the guidance prescribes a model for measuring the fair value of an instrument classified in stockholders’ equity; this model is consistent with the guidance on measuring the fair value of liabilities.                                                                                                                                                                                                                                                                                         |
|   | · | Disclosures about fair value measurements—the guidance expands disclosure requirements, particularly for Level 3 inputs. Required disclosures include:                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|   |  (i)  | For fair value measurements categorized in Level 3 of the fair value hierarchy: (1) a quantitative disclosure of the unobservable inputs and assumptions used in the measurement, (2) a description of the valuation process in place (e.g., how the entity decides its valuation policies and procedures, as well as changes in its analyses of fair value measurements, from period to period), and (3) a narrative description of the sensitivity of the fair value to changes in unobservable inputs and interrelationships between those inputs.  |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  (ii) | The level in the fair value hierarchy of items that are not measured at fair value in the statement of financial position but whose fair value must be disclosed.                                                                                                                                                                                                                                                                                                                                                                                           |

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|   | B. | LIQUIDITY AND CAPITAL RESOURCES |
|--------|----|---------------------------------|

----

|                                                 |   | For the Year Ended December 31, |   |
|------------------------------------------------------|--------|---------------------------------|--------|
|                                                 |   | 2009                            |   |   | 2010 |   |   | 2011 |   |
|                                                 |   | (U.S. dollars in thousands)     |   |
| Net cash provided by (used in) operating activities  |   |                            | 11,551 |   |   |   | 9,895 |   |   |   | (4,801 | ) |
| Net cash provided by (used in) investing activities  |   |                            | (5,987 | ) |   |   | (13,747 | ) |   |   | (54,297 | ) |
| Net cash provided by (used in) financing activities  |   |                            | 4,527  |   |   |   | 108,754 |   |   |   | (25,166 | ) |
| Effect of exchange rate changes                      |   |                            | 813    |   |   |   | 1,634 |   |   |   | 1,036 |   |
| Net increase (decrease) in cash and cash equivalents |   |                            | 10,904 |   |   |   | 106,536 |   |   |   | (83,228 | ) |
| Cash and cash equivalents, beginning of year         |   |                            | 22,916 |   |   |   | 33,820 |   |   |   | 140,356 |   |
| Cash and cash equivalents, end of year               |   |                            | 33,820 |   |   |   | 140,356 |   |   |   | 57,128 |   |

----

|               |   | As of December 31,                              |   |
|--------------------|--------|-------------------------------------------------|--------|
|               |   | 2009                                            |   |   | 2010 |   |   | 2011 |   |
| Aging Period       |   | Billed                                          |   |   | % of Total |   |   | Billed |   |   | % of Total |   |   | Billed |   |   | % of Total |   |
|               |   | (U.S. dollars in thousands, except percentages) |   |
| <60 days   |   |                                            | 16,136 |   |   |   | 76.7 |   |   |   | 36,591 |   |   |   | 85.0 |   |   |   | 36,382 |   |   |   | 76.1 |   |
| 61-90 days    |   |                                            | 1,742  |   |   |   | 8.3 |   |   |   | 607 |   |   |   | 1.4 |   |   |   | 7,851 |   |   |   | 16.4 |   |
| 91-180 days   |   |                                            | 882    |   |   |   | 4.2 |   |   |   | 2,987 |   |   |   | 6.9 |   |   |   | 1,813 |   |   |   | 3.8 |   |
| 181-360 days  |   |                                            | 1,083  |   |   |   | 5.2 |   |   |   | 1,314 |   |   |   | 3.0 |   |   |   | 1,788 |   |   |   | 3.7 |   |
| > 360 days |   |                                            | 1,183  |   |   |   | 5.6 |   |   |   | 1,573 |   |   |   | 3.7 |   |   |   | - |   |   |   | - |   |
| Total              |   |                                            | 21,026 |   |   |   | 100.0 |   |   |   | 43,072 |   |   |   | 100.0 |   |   |   | 47,834 |   |   |   | 100.0 |   |

----

|   | C. | RESEARCH AND DEVELOPMENT |
|--------|----|--------------------------|

|   | D. | TREND INFORMATION |
|--------|----|-------------------|

|   | E. | OFF-BALANCE SHEET ARRANGEMENTS |
|--------|----|--------------------------------|

|   | F. | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS |
|--------|----|-----------------------------------------------|

----

|                                                 |   | Payment by period           |    |
|------------------------------------------------------|--------|-----------------------------|---------|
| As of December 31, 2011                              |   | Total                       |    |   | Less than1 Year |   |   | 1-3Years |   |   | 3-5Years |   |   | More than 5 Years |   |
|                                                 |   | (U.S. dollars in thousands) |    |
| Operating lease agreements                           |   |                        | 7,872   |   |   |   | 1,819 |   |   |   | 1,910 |   |   |   | 1,792 |   |   |   | 2,351 |   |
| Bank borrowing                                       |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Principal                                            |   |                        | 9,225   |   |   |   | 8,891 |   |   |   | 157 |   |   |   | 111 |   |   |   | 66 |   |
| Interest                                             |   |                        | 117     |   |   |   | 44 |   |   |   | 43 |   |   |   | 21 |   |   |   | 9 |   |
| Deferred cash consideration for business acquisition |   |                        | 5,132   |   |   |   | 5,132 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Deferred cash consideration for debt extinguishment  |   |                        | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Total contractual obligations                        |   |                        | 22,346  |   |   |   | 15,886 |   |   |   | 2,110 |   |   |   | 1,924 |   |   |   | 2,426 |   |

|   | G. | SAFE HARBOR |
|--------|----|-------------|

| ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
|---------|--------------------------------------------|

|   | A. | DIRECTORS AND SENIOR MANAGEMENT |
|--------|----|---------------------------------|

| Name                 |   | Age |   | Position                             |
|----------------------|--------|-----|--------|--------------------------------------|
| Yiming MA            |   | 52  |   | Chairman and Chief Executive Officer |
| Heidi CHOU           |   | 48  |   | Director and General Manager         |
| Ching-Hua HO         |   | 55  |   | Director and Chief Operating Officer |
| Ajit BHUSHAN(1)      |   | 49  |   | Director                             |
| Dipak RASTOGI(2)     |   | 58  |   | Director                             |
| Jian Wang            |   | 35  |   | Independent Director                 |
| Shang-Wen HSIAO      |   | 50  |   | Independent Director                 |
| Joanna Wang          |   | 44  |   | Independent Director                 |
| David Dahu Wang      |   | 63  |   | Independent Director                 |
| Claude LEGLISE(3)    |   | 56  |   | Independent Director                 |
| Qian Zhao(4)         |   | 43  |   | President                            |
| Franklin King        |   | 65  |   | Interim Chief Financial Officer      |
| Gordon Lau(5)        |   | 48  |   | Chief Financial Officer              |
| Jan-Kung (James) ROH |   | 60  |   | Chief Technology Officer             |

| (1) | Mr. Ajit BHUSHAN resigned as our director on October 5, 2011.  |
|-----|---------------------------------------------------------------------|
| (2) | Mr. Dipak RASTOGI resigned as our director on October 5, 2011. |

----

| (3) | Mr. Claude LEGLISE resigned as our independent director on February 17, 2012.                                                                                                  |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4) | Mr. Qian Zhao initially served as our independent director on September 27, 2011. He resigned as the independent director and served as our president on March 15, 2012.  |
| (5) | Mr. Gordon Lau resigned as our Chief Financial Officer on November 8, 2011.                                                                                                         |

----

|   | B. | COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS |
|--------|----|--------------------------------------------------|

----

| Name                         |   | Number of Shares |   | Exercise Price ($/Share) |   | Date of Grant                     |   | Date of Expiration                  |
|------------------------------|--------|------------------|--------|--------------------------|--------|-----------------------------------|--------|-------------------------------------|
| Yiming MA                    |   | 1,450,020        |   | 0.0025                   |   | June 30, 2006                     |   | June 30, 2014                       |
| Heidi CHOU                   |   | 810,000          |   | 0.0025                   |   | June 30, 2006                     |   | June 30, 2014                       |
| Ching-Hua HO                 |   | *                |   | 0.2450                   |   | June 30, 2007                     |   | June 30, 2015                       |
| Jian WANG                    |   | -                |   | -                        |   | -                                 |   | -                                   |
| Shang-Wen HSIAO              |   | *                |   | 0.2450                   |   | June 30, 2007                     |   | June 30, 2015                       |
| Joanna Wang                  |   | -                |   | -                        |   | -                                 |   | -                                   |
| David Wang                   |   | -                |   | -                        |   | -                                 |   | -                                   |
| Qian ZHAO                    |   | -                |   | -                        |   | -                                 |   | -                                   |
| Franklin King                |   | -                |   | -                        |   | -                                 |   | -                                   |
| Jan-Kung (James) ROH         |   | -                |   | -                        |   | -                                 |   | -                                   |
| Other individuals as a group |   | 14,211,308       |   | 0.0025-0.7500            |   | June 30, 2006 to January 31, 2012 |   | August 16, 2011 to January 31, 2020 |
| Total                        |   | 16,811,328       |   |                     |   |                              |   |                                |

----

|   | C. | BOARD PRACTICES |
|--------|----|-----------------|

|   | · | appointment, compensation, retention and oversight of the work of our independent registered public accounting firm;                                                                                |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | approving all auditing and non-auditing services permitted to be performed by our independent registered public accounting firm;                                                                    |
|   | · | meeting separately and periodically with management and our independent registered public accounting firm;                                                                                          |
|   | · | oversight of annual audit and quarterly reviews, including reviewing with our independent registered public accounting firm the annual audit plans;                                                 |
|   | · | oversight of financial reporting processes and internal controls, including reviewing the adequacy and effectiveness of our internal controls policies and procedures on a regular basis; and  |
|   | · | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters.                                    |

|   | · | reviewing at least annually our executive compensation plans;                                                                                  |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | evaluating annually the performance of our chief executive officer and other executive officers;                                               |
|   | · | determining and recommending to the board of directors the compensation package for our chief executive officer and other executive officers;  |
|   | · | evaluating annually the appropriate level of compensation for board and board committee service by non-employee directors;                     |
|   | · | reviewing and approving any severance or termination arrangements to be made with any of our executive officers; and                      |
|   | · | reviewing at least annually our general compensation plans and other employee benefits plans.                                                       |

----

|   | · | convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings;  |
|--------|--------|----------------------------------------------------------------------------------------------------------------------|
|   | · | declaring dividends and distributions;                                                                          |
|   | · | appointing officers and determining the term of office of officers;                                             |
|   | · | exercising the borrowing powers of our company and mortgaging the property of our company; and             |
|   | · | approving the transfer of shares of our company.                                                                     |

|   | D. | EMPLOYEES |
|--------|----|-----------|

| Employees                       |   | Number ofemployees |   |   | Percentageof total |   |
|---------------------------------|--------|--------------------|--------|--------|--------------------|--------|
| IT Professionals                |   |               |   |   |               |   |
| Enterprise application services |   |               | 2,135  |   |               |   | 45.2 | % |
| Packaged software               |   |               | 626    |   |               |   | 13.3 | % |
| Software development            |   |               | 1,509  |   |               |   | 32.0 | % |
| Financial industry IT services  |   |               | 1,882  |   |               |   | 39.9 | % |
| Subtotal                        |   |               | 4,017  |   |               |   | 85.2 | % |
| Other employees                 |   |               | 701    |   |               |   | 14.9 | % |
| Administration                  |   |               | 224    |   |               |   | 4.8 | % |
| Sales and marketing             |   |               | 204    |   |               |   | 4.3 | % |
| Accounting                      |   |               | 81     |   |               |   | 1.7 | % |
| HR                              |   |               | 158    |   |               |   | 3.3 | % |
| Senior management               |   |               | 34     |   |               |   | 0.7 | % |
| Total                           |   |               | 4,718  |   |               |   | 100.0 | % |

----

|   | E. | SHARE OWNERSHIP |
|--------|----|-----------------|

|   | · | each of our directors and executive officers; and                           |
|--------|--------|----------------------------------------------------------------------------------|
|   | · | each person known to us to own beneficially more than 5% of our ordinary shares. |

|                                                |   | Ordinary Shares Beneficially Owned |       |
|-----------------------------------------------------|--------|------------------------------------|------------|
|                                                |   | Number                             |       |   | % |   |
| Directors and Executive Officers:                   |   |                               |       |   |   |   |
| Yiming Ma(1)                                        |   |                               | 15,538,196 |   |   |   | 8.08 | % |
| Heidi Chou(2)                                       |   |                               | 14,897,212 |   |   |   | 7.75 | % |
| Ching-Hua Ho                                        |   |                               | *          |   |   |   | * |   |
| Jian Wang                                           |   |                               | -          |   |   |   | - |   |
| Shang-Wen Hsiao                                     |   |                               | *          |   |   |   | * |   |
| Joanna Wang                                         |   |                               | -          |   |   |   | - |   |
| Qian Zhao                                           |   |                               | -          |   |   |   | - |   |
| Franklin King                                       |   |                               | -          |   |   |   | - |   |
| Jan-Kung (James) ROH                                |   |                               | *          |   |   |   | * |   |
|  Principal  Shareholders:            |   |                               |       |   |   |   |   |   |
|  Fidelity Management & Research Company(3) |   |                               | 19,198,144 |   |   |   | 9.98 | % |
|  Morgan Stanley & Company(4)               |   |                               | 12,023,640 |   |   |   | 6.25 | % |
|  Credit Suisse Securities (USA), LLC(5)        |   |                               | 11,214,448 |   |   |   | 5.83 | % |

| (1) | Consists of (i) 14,088,896 ordinary shares held by Benefit Overseas Limited, a British Virgin Islands investment holding company wholly owned and controlled by Mr. Ma (including 2,050,000 ordinary shares held by Mr. Ma as settlor and initial trustee in the Yiming Ma 2009 Annuity Trust, which is an irrevocable trust constituted under the laws of California); and (ii) options to purchase 1,450,020 ordinary shares held by Joint Link Technology Limited on behalf of Mr. Ma. The business address of these entities is Morgan & Morgan Building, P.O. Box 958, Pasea Estate, Road Town, Tortola, British Virgin Islands. Mr. Ma previously entered into certain margin loans, which were secured by a pledge of certain shares of our company that were beneficially owned by Mr. Ma.  In September 2011, due to market conditions and pursuant to margin calls, 1,990,697 ADSs beneficially owned by Mr. Ma were divested by one financial institution through sales on the open market and through transfers to other parties to cover the obligations of Mr. Ma under the margin loans.                             |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Consists of (i) 13,278,896 ordinary shares held by Dreams Power Ltd. a British Virgin Islands investment holding company wholly-owned and controlled by Ms. Chou (including 2,050,000 ordinary shares held by Ms. Chou as settlor and initial trustee in the Heidi Chou 2009 Annuity Trust, which is an irrevocable trust constituted under the laws of California); and (ii) options to purchase 810,000   ordinary shares held by Joint Link Technology Limited on behalf of Ms. Chou. The business address of these entities is Morgan & Morgan Building, P.O. Box 958, Pasea Estate, Road Town, Tortola, British Virgin Islands. Ms. Chou previously entered into certain margin loans, which were secured by a pledge of certain shares of our company that were beneficially owned by Ms. Chou.  In September 2011, due to market conditions and pursuant to margin calls, 1,990,456 ADSs beneficially owned by Ms. Chou were divested by one financial institution through sales on the open market and through transfers to other parties to cover the obligations of Ms. Chou under the margin loans.  |
| (3) | The principal business office of Fidelity Management and Research Company is 245 Summer Street, Boston, MA 02210-1133, United States, a wholly-owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

|   | 19,198,144 ordinary shares represented by ADS as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940.  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4)    | The principal business office of  Morgan Stanley & Company is  1585 Broadway, New York, NY 10036-8200, United States.                                                |
| (5)    | The principal business office of Credit Suisse Securities (USA), LLC is 11 Madison Avenue, New York, NY 10010-3629, United States.                                                                |

| ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
|---------|---------------------------------------------------|

|   | A. | MAJOR SHAREHOLDERS |
|--------|----|--------------------|

|   | B. | RELATED PARTY TRANSACTIONS  |
|--------|----|----------------------------------|

|   | · | 1,800,000 shares relating to the extinguishment of liability with Red River Valley;  |
|--------|--------|-------------------------------------------------------------------------------------------|
|   | · | 2,250,000 shares relating to the acquisition of VLife;                               |
|   | · | 3,200,000 shares relating to the acquisition of Yinfeng;                             |
|   | · | 833,336 shares relating to the acquisition of Harmonation;                           |
|   | · | 4,866,180 shares relating to the acquisition of Agree;                               |
|   | · | 3,932,000 shares relating to the acquisition of Tansun; and                          |
|   | · | 1,152,352 shares relating to the acquisition of Dimension.                                |

----

|   | C. | INTERESTS OF EXPERTS AND COUNSEL |
|--------|----|----------------------------------|

| ITEM 8. | FINANCIAL INFORMATION |
|---------|-----------------------|

|   | A. | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION |
|--------|----|---------------------------------------------------------|

|   | B. | SIGNIFICANT CHANGES |
|--------|----|---------------------|

| ITEM 9. | THE OFFER AND LISTING |
|---------|-----------------------|

|   | A. | OFFER AND LISTING DETAILS |
|--------|----|---------------------------|

|   | B. | PLAN OF DISTRIBUTION |
|--------|----|----------------------|

----

|   | C. | MARKETS |
|--------|----|---------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Trading Price |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | High          |   |   | Low |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | US$           |   |   | US$ |   |
| Annual High and Low                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |          |   |   |   |   |
|  2010                                                                                                                                |   |          | 24.90  |   |   |   | 10.55 |   |
|  2011                                                                                                                                |   |          | 28.18  |   |   |   | 1.75 |   |
| Quarterly Highs and Lows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          |   |   |   |   |   |   |
| Third Fiscal Quarter of 2010 (from July 20, 2010)                                                                                         |   |          | 18.80  |   |   |   | 10.55 |   |
| Fourth Fiscal Quarter of 2010                                                                                                             |   |          | 24.90  |   |   |   | 15.44 |   |
| First Fiscal Quarter of 2011                                                                                                              |   |          | 28.18  |   |   |   | 14.14 |   |
| Second Fiscal Quarter of 2011                                                                                                             |   |          | 21.10  |   |   |   | 12.75 |   |
| Third Fiscal Quarter of 2011                                                                                                              |   |          | 15.33  |   |   |   | 2.68 |   |
| Fourth Fiscal Quarter of 2011                                                                                                             |   |          | 3.84   |   |   |   | 1.75 |   |
| First Fiscal Quarter of 2012                                                                                                              |   |          | 4.07   |   |   |   | 2.03 |   |
| Monthly Highs and Lows                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          |   |   |   |   |   |   |
| November 2011                                                                                                                             |   |          | 3.29   |   |   |   | 1.75 |   |
| December 2011                                                                                                                             |   |          | 2.90   |   |   |   | 2.04 |   |
| January 2012                                                                                                                              |   |          | 3.15   |   |   |   | 2.03 |   |
| February 2012                                                                                                                             |   |          | 2.88   |   |   |   | 2.16 |   |
| March 2012                                                                                                                                |   |          | 4.07   |   |   |   | 2.08 |   |
| April 24, 2012                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          | 3.94   |   |   |   | 2.60 |   |

|   | D. | SELLING SHAREHOLDERS |
|--------|----|----------------------|

|   | E. | DILUTION |
|--------|----|----------|

|   | F. | EXPENSES OF THE ISSUE |
|--------|----|-----------------------|

| ITEM 10. | ADDITIONAL INFORMATION |
|----------|------------------------|

|   | A. | SHARE CAPITAL |
|--------|----|---------------|

|   | B. | MEMORANDUM AND ARTICLES OF ASSOCIATION |
|--------|----|----------------------------------------|

----

----

----

----

----

|   | C. | MATERIAL CONTRACTS |
|--------|----|--------------------|

|   | D. | EXCHANGE CONTROLS |
|--------|----|-------------------|

|   | E. | TAXATION |
|--------|----|----------|

----

----

|   | · | such excess distribution or gain would be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares;                                                                              |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | such amount allocated to the current taxable year and any taxable year prior to the first taxable year in which we are classified as a PFIC (a “pre-PFIC year”) would be taxable as ordinary income;      |
|   | · | such amount allocated to each other taxable year, other than the current taxable year or a pre-PFIC year, would be subject to tax at the highest tax rate in effect applicable to the U.S. Holder for that year; and  |
|   | · | an interest charge generally applicable to underpayments of tax would be imposed on the tax attributable to each other taxable year, other than the current taxable year or a pre-PFIC year.                               |

----

----

|   | F. | DIVIDENDS AND PAYING AGENTS |
|--------|----|-----------------------------|

|   | G. | STATEMENT BY EXPERTS |
|--------|----|----------------------|

----

|   | H. | DOCUMENTS ON DISPLAY |
|--------|----|----------------------|

|   | I. | SUBSIDIARY INFORMATION |
|--------|----|------------------------|

| ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|----------|------------------------------------------------------------|

----

| ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
|----------|--------------------------------------------------------|

|   | A. | DEBT SECURITIES |
|--------|----|-----------------|

|   | B. | WARRANTS AND RIGHTS |
|--------|----|---------------------|

|   | C. | OTHER SECURITIES |
|--------|----|------------------|

|   | D. | AMERICAN DEPOSITARY SHARES |
|--------|----|----------------------------|

|    | Service                                                                                           |   | Fees                                                                                               |
|---------|---------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|
| ● | Issuance of ADSs                                                                                  |   | Up to U.S.5¢ per ADS issued                                                                   |
| ● | Cancellation of ADSs                                                                              |   | Up to U.S.5¢ per ADS canceled                                                                 |
| ● | Distribution of cash dividends or other cash distributions                                        |   | Up to U.S.5¢ per ADS held                                                                     |
| ● | Distribution of ADSs pursuant to stock dividends, free stock distributions or exercise of rights. |   | Up to U.S.5¢ per ADS held                                                                     |
| ● | Distribution of securities other than ADSs or rights to purchase additional ADSs                  |   | Up to U.S.5¢ per ADS held                                                                     |
| ● | Depositary services                                                                               |   | Up to U.S.5¢ per ADS held on the applicable record date(s) established by the depositary bank |
| ● | Transfer of ADSs                                                                                  |   | U.S.$1.50 per certificate presented for transfer                                                   |

----

|   | · | fees for the transfer and registration of ordinary shares charged by the registrar and transfer agent for the ordinary shares in the British Virgin Islands ( i.e. upon deposit and withdrawal of ordinary shares);  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | expenses incurred for converting foreign currency into U.S. dollars;                                                                                                                                                 |
|   | · | expenses for cable, telex and fax transmissions and for delivery of securities;                                                                                                                                      |
|   | · | taxes and duties upon the transfer of securities ( i.e. when ordinary shares are deposited or withdrawn from deposit); and                                                                                           |
|   | · | fees and expenses incurred in connection with the delivery or servicing of ordinary shares on deposit.                                                                                                                    |

----

| ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
|----------|-------------------------------------------------|

| ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
|----------|------------------------------------------------------------------------------|

| ITEM 15. | CONTROLS AND PROCEDURES |
|----------|-------------------------|

----

----

| ITEM 16. | RESERVED |
|----------|----------|
| ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT |
|-----------|----------------------------------|

| ITEM 16B. | CODE OF ETHICS |
|-----------|----------------|

| ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
|-----------|----------------------------------------|

----

|                  |   | Year Ended December 31,     |   |
|-----------------------|--------|-----------------------------|--------|
|                  |   | (U.S. dollars in thousands) |   |
|                  |   | 2010                        |   |   | 2011 |   |
| Audit Fees (1)        |   |                        | 478    |   |   |   | 2,350 |   |
| Audit-Related Fees(2) |   |                        | 30     |   |   |   | 31 |   |
| Tax fees(3)           |   |                        | -      |   |   |   | - |   |
| All Other Fees        |   |                        | -      |   |   |   | - |   |
| Total                 |   |                        | 508    |   |   |   | 2,381 |   |

| ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
|-----------|------------------------------------------------------------|

| ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
|-----------|------------------------------------------------------------------------|

| Period                                               |   | Total Number of ADS Purchased |   | Weighted Average Price paid per ADS |   | Total Number of ADS Purchased as Part of Publicly Announced Plans or Programs |   | Maximum Dollar Value of ADSs that May Yet be Purchased Under the Plans or Programs (US$) |
|------------------------------------------------------|--------|-------------------------------|--------|-------------------------------------|--------|-------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------|
|                                                 |   |                          |   |                                |   |                                                                          |   |                                                                                     |
| Month #1 (from January 1 2011 to January 31, 2011)   |   | —                       |   | N/A                                 |   | —                                                                       |   | —                                                                                  |
| Month #2 (from February 1 2011 to February 28, 2011) |   | —                       |   | N/A                                 |   | —                                                                       |   | —                                                                                  |
| Month #3 (from March 1 2011 to March 31, 2011)       |   | —                       |   | N/A                                 |   | —                                                                       |   | —                                                                                  |
| Month #4 (from April 1 2011 to April 30, 2011)       |   | —                       |   | N/A                                 |   | —                                                                       |   | —                                                                                  |

----

| Month #5 (from May 1 2011 to May 31, 2011)             | —   |   | N/A      |   | —   |   | US$20,000,000 |
|--------------------------------------------------------|-----------|--------|----------|--------|-----------|--------|---------------|
| Month #6 (from June 1 2011 to June 31, 2011)           | 210,500   |   | US$14.12 |   | 210,500   |   | US$17,027,706 |
| Month #7 (from July 1 2011 to July 31, 2011)           | 224,800   |   | US$13.50 |   | 224,800   |   | US$13,992,209 |
| Month #8 (from August 1 2011 to August 31, 2011)       | 1,178,500 |   | US$4.84  |   | 1,178,500 |   | US$8,283,652  |
| Month #9 (from September 1 2011 to September 30, 2011) | 504,600   |   | US$5.18  |   | 504,600   |   | US$5,670,063  |
| Month #10 (from October 1 2011 to October 31, 2011)    | —   |   | N/A      |   | —   |   | US$5,670,063  |
| Month #11 (from November 1 2011 to November 30, 2011)  | —   |   | N/A      |   | —   |   | US$5,670,063  |
| Month #12 (from December 1 2011 to December 31, 2011)  | —   |   | N/A      |   | —   |   | US$5,670,063  |

| ITEM 16F. | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
|-----------|----------------------------------------------------|

| ITEM 16G. | CORPORATE GOVERNANCE |
|-----------|----------------------|

|   | · | Under NYSE listing standards, listed companies are required to hold an annual shareholders’ meeting during each fiscal year. Under BVI law, the Company is not obliged to hold an annual general meeting of shareholders.  |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | Section 303A.08 of the NYSE Listed Company Manual requires a listed company to obtain its shareholders’ approval of all equity-compensation plans, and any material revisions to the terms                                 |

----

|   |   | of such plans. Under BVI law, we are not required to obtain shareholders’ approval for amendments to our existing equity incentive plan.                                                                                                                                                                                                 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                           |
|   | · | The NYSE standards for domestic companies require that non-management directors meet at regularly scheduled executive sessions without management. Our non-management directors have not met in executive sessions without management, and there is no requirement under BVI law that our non-management directors meet in executive sessions. |

|   | · | have a majority of the board be independent (other than due to the requirements for the audit committee under the United States Securities Exchange Act of 1934, as amended, or the Exchange Act);                                                                                                                                                                                        |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | have a minimum of three members on our audit committee;                                                                                                                                                                                                                                                                                                                                   |
|   | · | have a compensation committee, a nominating or corporate governance committee;                                                                                                                                                                                                                                                                                                            |
|   | · | provide annual certification by our chief executive officer that he or she is not aware of any non-compliance with any corporate governance rules of the NYSE;                                                                                                                                                                                                                            |
|   | · | have a majority of the board be independent (other than due to the requirements for the audit committee under the United States Securities Exchange Act of 1934, as amended, or the Exchange Act);                                                                                                                                                                                        |
|   | · | have a minimum of three members on our audit committee;                                                                                                                                                                                                                                                                                                                                   |
|   | · | have a compensation committee, a nominating or corporate governance committee;                                                                                                                                                                                                                                                                                                            |
|   | · | provide annual certification by our chief executive officer that he or she is not aware of any non-compliance with any corporate governance rules of the NYSE;                                                                                                                                                                                                                            |
|   | · | have at least one executive session of solely independent directors each year;                                                                                                                                                                                                                                                                                                            |
|   | · | seek shareholder approval for (i) the implementation and material revisions of the terms of share incentive plans, (ii) the issuance of more than 1% of our outstanding ordinary shares or 1% of the voting power outstanding to a related party, (iii) the issuance of more than 20% of our outstanding ordinary shares, and (iv) an issuance that would result in a change of control;  |
|   | · | adopt and disclose corporate governance guidelines; or                                                                                                                                                                                                                                                                                                                                    |
|   | · | adopt and disclose a code of business conduct and ethics for directors, officers and employees.                                                                                                                                                                                                                                                                                                |

| ITEM 16H. | MINE SAFETY DISCLOSURE |
|-----------|------------------------|

----

| ITEM 17. | FINANCIAL STATEMENTS |
|----------|----------------------|

| ITEM 18. | FINANCIAL STATEMENTS |
|----------|----------------------|

| ITEM 19. | EXHIBITS |
|----------|----------|

| 1.1* | Form of Third Amended and Restated Memorandum and Articles of Association of the Registrant                                                                                                                                                                                                                                                                                 |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1  | Form of Registrant’s American Depositary Receipt (included in Exhibit 4.3) (incorporated herein by reference to Exhibit 4.1 to the registration statement on Form F-1, as amended (File No. 333-167791))                                                                                                                                                              |
| 2.2  | Registrant’s Specimen Certificate for Ordinary Shares (incorporated herein by reference to Exhibit 4.2 to the registration statement on Form F-1, as amended (File No. 333-167791))                                                                                                                                                                                   |
| 2.3  | Form of Deposit Agreement among the Registrant, the depositary and Owners and Beneficial Owners of the American Depositary Shares issued thereunder (incorporated herein by reference to Exhibit 4.3 to the registration statement on Form F-1, as amended (File No. 333-167791))                                                                                           |
| 4.1  | Amended and Restated 2006 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form F-1, as amended (File No. 333-167791))                                                                                                                                                                                              |
| 4.2  | Form of Employment Agreement between the Registrant and each Executive Officer of the Registrant (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-1, as amended (File No. 333-167791))                                                                                                                                             |
| 4.3  | Camelot Information Systems Inc. Registration Right Agreement among the Registrant and other parties thereto dated as of December 27, 2007 (incorporated herein by reference to Exhibit 4.4 to the registration statement on Form F-1, as amended (File No. 333-167791))                                                                                                    |
| 4.4  | Amendment to the Registration Right Agreement among the Registrant and other parties thereto dated as of May 22, 2010 (incorporated herein by reference to Exhibit 4.5 to the registration statement on Form F-1, as amended (File No. 333-167791))                                                                                                                         |
| 4.5  | An English summary of the Share Transfer Agreement between Alpower Investment Ltd and Camelot Information Systems Inc. dated January 1, 2011 (incorporated herein by reference to Exhibit 4.5 to the annual report on Form 20-F filed on June 9, 2011 (File No. 001-34797))                                                                                            |
| 4.6  |  An English summary of the Share Transfer Agreement by and among Zhao Xumin, Liu Tao and Camelot Information Systems Inc. dated January 1, 2011 (incorporated herein by reference to Exhibit 4.6 to the annual report on Form 20-F filed on June 9, 2011 (File No. 001-34797))                                                                                    |
| 4.7  | Technical Services Agreement Base Agreement, dated May 31, 2011 between IBM Dalian Global Delivery Co Ltd, IBM Solution & Service (SZ) Co., Ltd and Beijing Camelot Technology Co., Ltd (incorporated herein by reference to Exhibit 4.7 to the annual report on Form 20-F filed on June 9, 2011 (File No. 001-34797))                                             |
| 4.8  | Participation Agreement, dated May 30, 2011, among IBM Dalian Global Delivery Co Ltd., IBM Solution & Services (SZ) Co., Ltd.. and Kunshan Castle  Information consulting Co., Ltd. (incorporated herein by reference to Exhibit 4.8 to the annual report on Form 20-F filed on June 9, 2011 (File No. 001-34797))                                       |
| 4.9  | Technical Service Agreement Master Statement of Work, dated May 20,2011, among IBM Dalian Global Delivery Co Ltd., IBM Solution & Service (SZ) Co. Ltd. And Beijing Camelot Technology Co. Ltd. and Beijing Camelot Technology Co., Ltd. (incorporated herein by reference to Exhibit 4.9 to the annual report on Form 20-F filed on June 9, 2011 (File No. 001-34797)) |

----

| 4.10      | Supplementary Agreement, dated May 20,2011, among IBM Dalian Global Delivery Co., Ltd. (incorporated herein by reference to Exhibit 4.10 to the annual report on Form 20-F filed on June 9, 2011 (File No. 001-34797))                                                       |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.11      | Technical Services Agreement, dated March 24, 2008, among IBM Global Services (China) Co. Ltd. and Camelot Information Systems (China) Corp. Ltd. (incorporated herein by reference to Exhibit 10.2 to the registration statement on Form F-1, as amended (File No. 333-167791))  |
| 4.12      | Participation Agreement, dated June 15, 2008, between IBM Global Services (China) Co. Ltd. and Shanghai Camelot Information Technology Co. Ltd. (incorporated herein by reference to Exhibit 10.3 to the registration statement on Form F-1, as amended (File No. 333-167791))    |
| 8.1*      | List of Subsidiaries                                                                                                                                                                                                                                                              |
| 11.1      | Code of Business Conduct and Ethics of the Registrant (incorporated herein by reference to Exhibit 99.1 to the registration statement on Form F-1, as amended (File No. 333-167791))                                                                                              |
| 12.1*     | Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                            |
| 12.2*     | Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                            |
| 13.1*     | Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                            |
| 13.2*     | Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                            |
| 15.1*     | Consent of Deloitte Touche Tohmatsu CPA Ltd., Independent Registered Public Accounting Firm                                                                                                                                                                                       |
| 15.2*     | Consent of American Appraisal China Limited, Independent Third Party Valuation Firm                                                                                                                                                                                               |
| 101.INS** | XBRL Instance Document                                                                                                                                                                                                                                                            |
| 101.SCH** | XBRL Taxonomy Extension Schema Document                                                                                                                                                                                                                                           |
| 101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document                                                                                                                                                                                                                             |
| 101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document                                                                                                                                                                                                                              |
| 101.LAB** | XBRL Taxonomy Extension Label Linkbase Document                                                                                                                                                                                                                                   |
| 101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document                                                                                                                                                                                                                                 |

| *  | Filed with this annual report on Form 20-F.                                                                                                                                                                                                                                                                                                                              |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** | XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |

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| CONTENTS                                                                                                        |   | PAGE   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                            |   |   |
|                                                                                                            |   |   |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                                         |   | F-2    |
|                                                                                                            |   |   |
| CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2010 AND 2011                                                    |   | F-3    |
|                                                                                                            |   |   |
| CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2009, 2010 AND 2011                      |   | F-5    |
|                                                                                                            |   |   |
| CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2009, 2010 AND 2011 |   | F-6    |
|                                                                                                            |   |   |
| CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009, 2010 AND 2011                      |   | F-7    |
|                                                                                                            |   |   |
| NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2009, 2010 AND 2011             |   | F-9    |
|                                                                                                            |   |   |
| ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENT SCHEDULE I                                               |   | F-53   |

----

----

|                                                                                                                                      |   | As of December 31, |    |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|
|                                                                                                                                      |   | 2010               |    |   | 2011 |   |
| Assets                                                                                                                                    |   |               |    |   |   |   |
|                                                                                                                                      |   |               |    |   |   |   |
| Current assets:                                                                                                                           |   |               |    |   |   |   |
| Cash and cash equivalents                                                                                                                 |   |               | 140,356 |   |   |   | 57,128 |   |
| Restricted cash                                                                                                                           |   |               | 6,932   |   |   |   | 4,626 |   |
| Billed accounts receivable, net of allowance for doubtful accounts of US$14 and US$2,726 as of December 31, 2010 & 2011, respectively |   |               | 43,072  |   |   |   | 47,834 |   |
| Unbilled accounts receivable, net of allowance for doubtful accounts of US$390 and US$927 as of December 31,2010 & 2011, respectively |   |               | 62,624  |   |   |   | 87,212 |   |
| Term deposits                                                                                                                             |   |               | 160     |   |   |   | 45,318 |   |
| Inventories                                                                                                                               |   |               | 1,634   |   |   |   | 576 |   |
| Deferred costs                                                                                                                            |   |               | 32      |   |   |   | 1,396 |   |
| Deferred tax assets-current                                                                                                               |   |               | 1,088   |   |   |   | 1,930 |   |
| Prepaid expenses and other current assets                                                                                                 |   |               | 11,420  |   |   |   | 15,757 |   |
|                                                                                                                                      |   |               |    |   |   |   |   |   |
| Total current assets                                                                                                                      |   |               | 267,318 |   |   |   | 261,777 |   |
| Property and equipment, net                                                                                                               |   |               | 4,680   |   |   |   | 4,673 |   |
| Intangible assets, net                                                                                                                    |   |               | 26,631  |   |   |   | 18,250 |   |
| Deferred tax assets-noncurrent                                                                                                            |   |               | 71      |   |   |   | 1,197 |   |
| Project deposits                                                                                                                          |   |               | 79      |   |   |   | 74 |   |
| Rental deposits and other noncurrent assets                                                                                               |   |               | 1,457   |   |   |   | 1,427 |   |
| Goodwill                                                                                                                                  |   |               | 41,229  |   |   |   | 27,998 |   |
|                                                                                                                                      |   |               |    |   |   |   |   |   |
| Total assets                                                                                                                              |   |               | 341,465 |   |   |   | 315,396 |   |
|                                                                                                                                      |   |               |    |   |   |   |   |   |
| Liabilities                                                                                                                               |   |               |    |   |   |   |   |   |
|                                                                                                                                      |   |               |    |   |   |   |   |   |
| Current liabilities:                                                                                                                      |   |               |    |   |   |   |   |   |
| Short term borrowings                                                                                                                     |   |               | 11,566  |   |   |   | 8,847 |   |
| Accounts payable                                                                                                                          |   |               | 18,610  |   |   |   | 20,041 |   |
| Deferred revenue                                                                                                                          |   |               | 5,598   |   |   |   | 8,391 |   |
| Income taxes payable                                                                                                                      |   |               | 9,580   |   |   |   | 10,548 |   |
| Accrued expenses and other payables                                                                                                       |   |               | 19,088  |   |   |   | 23,272 |   |
| Consideration payable in connection with business                                                                                         |   |               |    |   |   |   |   |   |
| Consideration payable in connection with business acquisitions and debt extinguishment                                                    |   |               | 15,594  |   |   |   | 5,132 |   |
|                                                                                                                                      |   |               |    |   |   |   |   |   |
| Total current liabilities                                                                                                                 |   |               | 80,036  |   |   |   | 76,231 |   |
| Borrowings, less current portion                                                                                                          |   |               | 403     |   |   |   | 378 |   |
| Deferred tax liabilities                                                                                                                  |   |               | 4,303   |   |   |   | 2,871 |   |
| Contingent consideration in relation to business acquisitions                                                                             |   |               | 2,307   |   |   |   | 2,822 |   |
| Other non-current liabilities                                                                                                             |   |               | 1,139   |   |   |   | 1,006 |   |
|                                                                                                                                      |   |               |    |   |   |   |   |   |
| Total liabilities                                                                                                                         |   |               | 88,188  |   |   |   | 83,308 |   |

----

|                                                                                                                                                                                                                                                    |   | As of December 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|
|                                                                                                                                                                                                                                                    |   | 2010               |    |   | 2011 |   |
| Commitments and contingencies (Note 21)                                                                                                                                                                                                                 |   |               |    |   |   |   |
|                                                                                                                                                                                                                                                    |   |               |    |   |   |   |
| Equity:                                                                                                                                                                                                                                                 |   |               |    |   |   |   |
| Camelot Information Systems Inc. shareholders' equity:                                                                                                                                                                                                  |   |               |    |   |   |   |
| Ordinary shares (451,925,654 shares authorized as of December 31, 2010 and 2011; 179,610,128 shares issued and outstanding as of December 31, 2010; 182,762,475 shares issued and 177,621,367 shares outstanding as of December 31, 2011, respectively) |   |               | -       |   |   |   | - |   |
| Additional paid-in capital                                                                                                                                                                                                                              |   |               | 177,467 |   |   |   | 189,094 |   |
| Statutory reserves                                                                                                                                                                                                                                      |   |               | 8,241   |   |   |   | 10,527 |   |
| Retained earnings                                                                                                                                                                                                                                       |   |               | 53,550  |   |   |   | 10,440 |   |
| Accumulated other comprehensive income                                                                                                                                                                                                                  |   |               | 13,456  |   |   |   | 21,684 |   |
|                                                                                                                                                                                                                                                    |   |               |    |   |   |   |   |   |
| Total Camelot Information Systems Inc. shareholders' equity                                                                                                                                                                                             |   |               | 252,714 |   |   |   | 231,745 |   |
| Noncontrolling interest                                                                                                                                                                                                                                 |   |               | 563     |   |   |   | 343 |   |
|                                                                                                                                                                                                                                                    |   |               |    |   |   |   |   |   |
| Total equity                                                                                                                                                                                                                                            |   |               | 253,277 |   |   |   | 232,088 |   |
|                                                                                                                                                                                                                                                    |   |               |    |   |   |   |   |   |
| Total liabilities and equity                                                                                                                                                                                                                            |   |               | 341,465 |   |   |   | 315,396 |   |

----

|                                                                                                                                                                         |   | For the year ended December 31, |        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|-------------|
|                                                                                                                                                                         |   | 2009                            |        |   | 2010 |   |   | 2011 |   |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |
| Net revenues                                                                                                                                                                 |   |                            | 118,003     |   |   |   | 192,863 |   |   |   | 227,120 |   |
| Cost of revenues (including share-based compensation of US$147, US$136 and US$1,463 for the years ended December 31, 2009, 2010 and 2011 respectively)                       |   |                            | (81,976     | ) |   |   | (130,862 | ) |   |   | (167,520 | ) |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Gross profit                                                                                                                                                                 |   |                            | 36,027      |   |   |   | 62,001 |   |   |   | 59,600 |   |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Operating expenses:                                                                                                                                                          |   |                            |        |   |   |   |   |   |   |   |   |   |
| Selling and marketing expenses (including share-based compensation of US$158, US$354 and US$7,427 for the years ended December 31, 2009, 2010 and 2011 respectively)         |   |                            | (6,199      | ) |   |   | (11,138 | ) |   |   | (20,263 | ) |
| General and administrative expenses (including share-based compensation of US$938, US$2,434 and US$10,476 for the years ended December 31, 2009, 2010 and 2011 respectively) |   |                            | (12,627     | ) |   |   | (21,605 | ) |   |   | (45,065 | ) |
| Research and development costs                                                                                                                                               |   |                            | (1,496      | ) |   |   | (2,741 | ) |   |   | (5,956 | ) |
| Loss on impairment of intangible assets                                                                                                                                      |   |                            | -           |   |   |   | - |   |   |   | (8,552 | ) |
| Loss on impairment of goodwill                                                                                                                                               |   |                            | -           |   |   |   | - |   |   |   | (21,457 | ) |
| Changes in fair value of contingent consideration for business acquisitions                                                                                                  |   |                            | (549        | ) |   |   | (3,880 | ) |   |   | (1,669 | ) |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Total operating expenses                                                                                                                                                     |   |                            | (20,871     | ) |   |   | (39,364 | ) |   |   | (102,962 | ) |
| Government subsidies                                                                                                                                                         |   |                            | 56          |   |   |   | 123 |   |   |   | 255 |   |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Income (loss) from operations                                                                                                                                                |   |                            | 15,212      |   |   |   | 22,760 |   |   |   | (43,107 | ) |
| Interest expense                                                                                                                                                             |   |                            | (96         | ) |   |   | (475 | ) |   |   | (935 | ) |
| Interest income                                                                                                                                                              |   |                            | 118         |   |   |   | 498 |   |   |   | 1,194 |   |
| Gain on short-term investment                                                                                                                                                |   |                            | 44          |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Income (loss)  before provisions for income taxes                                                                                                                  |   |                            | 15,278      |   |   |   | 22,783 |   |   |   | (42,848 | ) |
| Provisions for income taxes (benefit)                                                                                                                                        |   |                            | (2,241      | ) |   |   | (4,100 | ) |   |   | 1,791 |   |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                                                                                                                                            |   |                            | 13,037      |   |   |   | 18,683 |   |   |   | (41,057 | ) |
| Less: Net (income)loss attributable to noncontrolling interest                                                                                                               |   |                            | (71         | ) |   |   | (86 | ) |   |   | 233 |   |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to Camelot Information Systems Inc.                                                                                                           |   |                            | 12,966      |   |   |   | 18,597 |   |   |   | (40,824 | ) |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Net income (loss) per ordinary share:                                                                                                                                        |   |                            |        |   |   |   |   |   |   |   |   |   |
| Net income (loss) attributable to Camelot Information Systems Inc. ordinary shareholders                                                                                     |   |                            |        |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                                        |   |                            | 0.10        |   |   |   | 0.12 |   |   |   | (0.23 | ) |
| Diluted                                                                                                                                                                      |   |                            | 0.10        |   |   |   | 0.11 |   |   |   | (0.23 | ) |
|                                                                                                                                                                         |   |                            |        |   |   |   |   |   |   |   |   |   |
| Weighted average shares used in calculating net income/(loss) per ordinary share                                                                                             |   |                            |        |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                                        |   |                            | 82,035,859  |   |   |   | 128,663,415 |   |   |   | 179,954,056 |   |
| Diluted                                                                                                                                                                      |   |                            | 133,017,168 |   |   |   | 165,258,030 |   |   |   | 179,954,056 |   |

----

|                                                                                                              |   | Camelot Information Systems Inc.'s Shareholders |       |   |                     |   |   |            |       |   |      |
|-------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|------------|--------|--------------------------|--------|--------|-----------------|------------|--------|-----------|
|                                                                                                              |   | Series Apreferred shares                        |       |   | Series Bpreferred shares |   |   | Ordinary shares |       |   | Shares to |   |   | Additional paid-in |   |   | Statutory |   |   | Retained |   |   | Accumulated other compre-hensive |   |   | TotalCamelotInformationSystems Inc.shareholders' |   |   | Non-controlling |   |   | Total |   |   | Total compre-hensive income (loss) |   |
|                                                                                                              |   | Shares                                          |       |   | Amount                   |   |   | Shares          |       |   | Amount    |   |   | Shares outstanding |   |   | Amount |   |   | be issued |   |   | capital |   |   | reserves |   |   | earnings |   |   | income |   |   | equity |   |   | interest |   |   | equity |   |   | for the year |   |
|                                                                                                              |   |                                            |       |   |                     |   |   |            |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance as of January 1, 2009                                                                                     |   |                                            | 44,055,018 |   |                     |   | 28,725 |            |       |   | 4,019,328 |   |   |   | 5,000 |   |   |   | 76,774,814 |   |   |   | - |   |   |   | 3,270 |   |   |   | 11,643 |   |   |   | 2,964 |   |   |   | 27,264 |   |   |   | 7,191 |   |   |   | 86,057 |   |   |   | 436 |   |   |   | 86,493 |   |   |   |   |
| Issuance of ordinary shares in connection with business acquisition of Yinfeng                                    |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | 1,000,000 |   |   |   | - |   |   |   | (1,218 | ) |   |   | 1,218 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |
| Issuance of ordinary shares in connection with business acquisition of Agree                                      |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | 4,866,180 |   |   |   | - |   |   |   | - |   |   |   | 6,095 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,095 |   |   |   | - |   |   |   | 6,095 |   |   |   |   |
| Ordinary shares to be issued in connection with settlement of contingent consideration for acquisition of Yinfeng |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,223 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,223 |   |   |   | - |   |   |   | 3,223 |   |   |   |   |
| Ordinary shares to be issued in connection with business acquisition of Tansun                                    |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,760 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,760 |   |   |   | - |   |   |   | 5,760 |   |   |   |   |
| Share based compensation                                                                                          |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,243 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,243 |   |   |   | - |   |   |   | 1,243 |   |   |   |   |
| Transfer to statutory reserve                                                                                     |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,439 |   |   |   | (1,439 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |
| Dissolution of Ruiyin                                                                                             |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (63 | ) |   |   | (63 | ) |   |   |   |
| Foreign currency translation adjustment                                                                           |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 156 |   |   |   | 156 |   |   |   | 13 |   |   |   | 169 |   |   |   | 169 |   |
| Net income                                                                                                        |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 12,966 |   |   |   | - |   |   |   | 12,966 |   |   |   | 71 |   |   |   | 13,037 |   |   |   | 13,037 |   |
|                                                                                                              |   |                                            |       |   |                     |   |   |            |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance as of December 31, 2009                                                                                   |   |                                            | 44,055,018 |   |                     |   | 28,725 |            |       |   | 4,019,328 |   |   |   | 5,000 |   |   |   | 82,640,994 |   |   |   | - |   |   |   | 11,035 |   |   |   | 20,199 |   |   |   | 4,403 |   |   |   | 38,791 |   |   |   | 7,347 |   |   |   | 115,500 |   |   |   | 457 |   |   |   | 115,957 |   |   |   | 13,206 |   |
| Issuance of ordinary shares in connection with business acquisitions and debt extinguishment                      |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | 7,932,000 |   |   |   | - |   |   |   | (11,035 | ) |   |   | 11,035 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Conversion of preferred shares upon the initial public offering ("IPO")                                           |   | (44,055,018)                             |       |   | (28,725)          |   |   |            | (4,019,328 | )      |      |   | (5,000 | ) |   |   | 48,074,346 |   |   |   | - |   |   |   | - |   |   |   | 33,725 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Issuance of ordinary shares upon IPO net of issuance cost of US$4,140                                             |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | 36,666,668 |   |   |   | - |   |   |   | - |   |   |   | 89,635 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 89,635 |   |   |   | - |   |   |   | 89,635 |   |   |   |   |   |
| Issuance of ordinary shares upon the follow-on public offering net of issuance cost of nil                        |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | 4,296,120 |   |   |   | - |   |   |   | - |   |   |   | 19,949 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 19,949 |   |   |   | - |   |   |   | 19,949 |   |   |   |   |   |
| Share based compensation                                                                                          |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,924 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,924 |   |   |   | - |   |   |   | 2,924 |   |   |   |   |   |
| Transfer to statutory reserve                                                                                     |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,838 |   |   |   | (3,838 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Foreign currency translation adjustment                                                                           |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,109 |   |   |   | 6,109 |   |   |   | 20 |   |   |   | 6,129 |   |   |   | 6,129 |   |
| Net income                                                                                                        |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 18,597 |   |   |   | - |   |   |   | 18,597 |   |   |   | 86 |   |   |   | 18,683 |   |   |   | 18,683 |   |
|                                                                                                              |   |                                            |       |   |                     |   |   |            |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance as of December 31, 2010                                                                                   |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | 179,610,128 |   |   |   | - |   |   |   | - |   |   |   | 177,467 |   |   |   | 8,241 |   |   |   | 53,550 |   |   |   | 13,456 |   |   |   | 252,714 |   |   |   | 563 |   |   |   | 253,277 |   |   |   | 24,812 |   |
| Issuance of ordinary shares in connection with business acquisitions                                              |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | 1,152,352 |   |   |   | - |   |   |   | - |   |   |   | 5,341 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,341 |   |   |   | - |   |   |   | 5,341 |   |   |   |   |   |
| Repurchase of ordinary shares                                                                                     |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | (8,473,600 | ) |   |   | - |   |   |   | - |   |   |   | (14,415 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (14,415 | ) |   |   | - |   |   |   | (14,415 | ) |   |   |   |   |
| Options exercised                                                                                                 |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | 5,332,492 |   |   |   | - |   |   |   | - |   |   |   | 1,335 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,335 |   |   |   | - |   |   |   | 1,335 |   |   |   |   |   |
| Share based compensation                                                                                          |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 19,366 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 19,366 |   |   |   | - |   |   |   | 19,366 |   |   |   |   |   |
| Transfer to statutory reserve                                                                                     |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,286 |   |   |   | (2,286 | ) |   |   | - |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   |   |   |
| Dissolved   of Yantai                                                                              |   |                                            |       |   |                     |   |   |            |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 32 |   |   |   | 32 |   |   |   |   |   |
| Foreign currency translation adjustment                                                                           |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 8,228 |   |   |   | 8,228 |   |   |   | (19 | ) |   |   | 8,209 |   |   |   | 8,209 |   |
| Net loss                                                                                                          |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (40,824 | ) |   |   | - |   |   |   | (40,824 | ) |   |   | (233 | ) |   |   | (41,057 | ) |   |   | (41,057 | ) |
|                                                                                                              |   |                                            |       |   |                     |   |   |            |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance as of December 31, 2011                                                                                   |   |                                            | -          |   |                     |   | -      |            |       |   | -         |   |   |   | - |   |   |   | 177,621,372 |   |   |   | - |   |   |   | - |   |   |   | 189,094 |   |   |   | 10,527 |   |   |   | 10,440 |   |   |   | 21,684 |   |   |   | 231,745 |   |   |   | 343 |   |   |   | 232,088 |   |   |   | (32,848 | ) |

----

|                                                                                                             |   | For the year ended December 31, |    |
|------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|
|                                                                                                             |   | 2009                            |    |   | 2010 |   |   | 2011 |   |
| Cash flows from operating activities:                                                                            |   |                            |    |   |   |   |   |   |   |
| Net income (loss)                                                                                                |   |                            | 13,037  |   |   |   | 18,683 |   |   |   | (41,057 | ) |
| Adjustments to reconcile net income to net cash                                                                  |   |                            |    |   |   |   |   |   |   |   |   |   |
| Provided by (used in) operating activities:                                                                      |   |                            |    |   |   |   |   |   |   |   |   |   |
| Depreciation of property and equipment                                                                           |   |                            | 634     |   |   |   | 962 |   |   |   | 1,087 |   |
| Amortization of intangible assets                                                                                |   |                            | 3,860   |   |   |   | 6,309 |   |   |   | 5,285 |   |
| Deferred income taxes                                                                                            |   |                            | (738    | ) |   |   | (1,324 | ) |   |   | (4,060 | ) |
| Share-based compensation                                                                                         |   |                            | 1,243   |   |   |   | 2,924 |   |   |   | 19,366 |   |
| Provision for bad debts                                                                                          |   |                            | 106     |   |   |   | 15 |   |   |   | 3,235 |   |
| Impairment loss on intangible assets                                                                             |   |                            | -       |   |   |   | - |   |   |   | 8,552 |   |
| Impairment loss on goodwill                                                                                      |   |                            | -       |   |   |   | - |   |   |   | 21,457 |   |
| (Gains)/loss on disposal of property and equipment                                                               |   |                            | 13      |   |   |   | (1 | ) |   |   | 20 |   |
| Loss on short-term investment                                                                                    |   |                            | (44     | ) |   |   | - |   |   |   | - |   |
| Changes in fair value of contingent consideration for acquisition of Tansun and Dimension                        |   |                            | 549     |   |   |   | 3,880 |   |   |   | 1,669 |   |
| Changes in operating assets and liabilities:                                                                     |   |                            |    |   |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                                              |   |                            | (12,849 | ) |   |   | (33,937 | ) |   |   | (23,364 | ) |
| Inventories                                                                                                      |   |                            | 57      |   |   |   | (740 | ) |   |   | 1,094 |   |
| Deferred cost                                                                                                    |   |                            | 299     |   |   |   | 562 |   |   |   | (1,385 | ) |
| Prepaid expenses and other current assets                                                                        |   |                            | (1,513  | ) |   |   | (4,336 | ) |   |   | (3,296 | ) |
| Project deposits                                                                                                 |   |                            | (68     | ) |   |   | 519 |   |   |   | 9 |   |
| Rental deposits and other noncurrent assets                                                                      |   |                            | (644    | ) |   |   | (480 | ) |   |   | 75 |   |
| Accounts payable                                                                                                 |   |                            | 3,857   |   |   |   | 7,500 |   |   |   | (406 | ) |
| Deferred revenue                                                                                                 |   |                            | 1,116   |   |   |   | (2,200 | ) |   |   | 2,535 |   |
| Income taxes payable                                                                                             |   |                            | 1,464   |   |   |   | 3,866 |   |   |   | 459 |   |
| Accrued expenses and other payables                                                                              |   |                            | 1,172   |   |   |   | 6,554 |   |   |   | 3,985 |   |
| Other non-current liabilities                                                                                    |   |                            | -       |   |   |   | 1,139 |   |   |   | (61 | ) |
|                                                                                                             |   |                            |    |   |   |   |   |   |   |   |   |   |
| Net cash  provided by (used in) operating activities                                                   |   |                            | 11,551  |   |   |   | 9,895 |   |   |   | (4,801 | ) |
|                                                                                                             |   |                            |    |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                                            |   |                            |    |   |   |   |   |   |   |   |   |   |
| Maturity (purchase) of term deposits, net                                                                        |   |                            | (299    | ) |   |   | 139 |   |   |   | (44,785 | ) |
| Deposit (release) of restricted cash, net                                                                        |   |                            | 730     |   |   |   | (4,365 | ) |   |   | 2,743 |   |
| Purchases of businesses, net of cash acquired of US$3,470, nil and US$1,506 in 2009, 2010 and 2011, respectively |   |                            | (6,458  | ) |   |   | (8,359 | ) |   |   | (11,430 | ) |
| Purchase of property and equipment                                                                               |   |                            | (408    | ) |   |   | (1,439 | ) |   |   | (867 | ) |
| Repayment of loan to unrelated parties                                                                           |   |                            | 242     |   |   |   | 248 |   |   |   | 13 |   |
| Proceeds from disposal of property and equipment                                                                 |   |                            | -       |   |   |   | 29 |   |   |   | 29 |   |
| Proceeds from sales of short-term investment                                                                     |   |                            | 206     |   |   |   | - |   |   |   | - |   |
|                                                                                                             |   |                            |    |   |   |   |   |   |   |   |   |   |
| Net cash used in investing activities                                                                            |   |                            | (5,987  | ) |   |   | (13,747 | ) |   |   | (54,297 | ) |

----

|                                                                                                                        |   | For the year ended December 31, |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|
|                                                                                                                        |   | 2009                            |   |   | 2010 |   |   | 2011 |   |
| Cash flows from financing activities:                                                                                       |   |                            |   |   |   |   |   |   |   |
| Distribution to noncontrolling interest shareholder upon dissolution of Ruiyin                                              |   |                            | (63    | ) |   |   | - |   |   |   | - |   |
| Proceeds from borrowings                                                                                                    |   |                            | 8,830  |   |   |   | 11,691 |   |   |   | 9,205 |   |
| Repayment of borrowings                                                                                                     |   |                            | (3,976 | ) |   |   | (9,311 | ) |   |   | (12,230 | ) |
| Proceeds from initial public offering                                                                                       |   |                            | -      |   |   |   | 93,775 |   |   |   | - |   |
| Payment of issuance cost related to initial public offering                                                                 |   |                            | (264   | ) |   |   | (2,957 | ) |   |   | (1,242 | ) |
| Proceeds from follow-on offering                                                                                            |   |                            | -      |   |   |   | 19,949 |   |   |   | - |   |
| Reimbursed issuance cost from follow-on offering                                                                            |   |                            | -      |   |   |   |   |   |   |   | 836 |   |
| Proceeds from exercise of share options                                                                                     |   |                            | -      |   |   |   | - |   |   |   | 1,335 |   |
| Repurchase of ordinary shares                                                                                               |   |                            | -      |   |   |   | - |   |   |   | (14,415 | ) |
| Payment of deferred consideration for acquisitions                                                                          |   |                            | -      |   |   |   | (4,252 | ) |   |   | (7,961 | ) |
| Payment of reimbursable issuance cost related to follow-on offering                                                         |   |                            |   |   |   |   | (141 | ) |   |   | (694 | )  |
|                                                                                                                        |   |                            |   |   |   |   |   |   |   |   |   |   |
| Net cash provided by (used in) financing activities                                                                         |   |                            | 4,527  |   |   |   | 108,754 |   |   |   | (25,166 | ) |
|                                                                                                                        |   |                            |   |   |   |   |   |   |   |   |   |   |
| Effect of exchange rate changes                                                                                             |   |                            | 813    |   |   |   | 1,634 |   |   |   | 1,036 |   |
|                                                                                                                        |   |                            |   |   |   |   |   |   |   |   |   |   |
| Net increase in cash and cash equivalents                                                                                   |   |                            | 10,904 |   |   |   | 106,536 |   |   |   | (83,228 | ) |
| Cash and cash equivalents, beginning of year                                                                                |   |                            | 22,916 |   |   |   | 33,820 |   |   |   | 140,356 |   |
|                                                                                                                        |   |                            |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents, end of year                                                                                      |   |                            | 33,820 |   |   |   | 140,356 |   |   |   | 57,128 |   |
|                                                                                                                        |   |                            |   |   |   |   |   |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                                                                           |   |                            |   |   |   |   |   |   |   |   |   |   |
| Income taxes paid                                                                                                           |   |                            | (1,515 | ) |   |   | (1,837 | ) |   |   | (1,860 | ) |
| Interest paid                                                                                                               |   |                            | (96    | ) |   |   | (475 | ) |   |   | (935 | ) |
|                                                                                                                        |   |                            |   |   |   |   |   |   |   |   |   |   |
| Non-cash investing activities:                                                                                              |   |                            |   |   |   |   |   |   |   |   |   |   |
| Ordinary shares issued in connection with business acquisitions of VLife, Harmonation, Yinfeng, Agree, Dimension (Note 16)  |   |                            | 7,313  |   |   |   | - |   |   |   | 5,341 |   |
|                                                                                                                        |   |                            |   |   |   |   |   |   |   |   |   |   |
| Ordinary shares to be issued in connection with business acquisitions of Yinfeng and Tansun (Note 16)                       |   |                            | 5,760  |   |   |   | - |   |   |   | - |   |
|                                                                                                                        |   |                            |   |   |   |   |   |   |   |   |   |   |
| Ordinary shares to be issued in connection with settlement of contingent consideration for acquisition of Yinfeng (Note 16) |   |                            | 3,223  |   |   |   | - |   |   |   | - |   |
|                                                                                                                        |   |                            |   |   |   |   |   |   |   |   |   |   |
| Consideration payable in connection with business acquisitions                                                              |   |                            | 8,790  |   |   |   | - |   |   |   | 3,145 |   |

----

| 1.     | ORGANIZATION AND PRINCIPAL ACTIVITIES                                                                                                                                                                                                          |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                           |
|   | Camelot Information Systems Inc. (the "Company") was incorporated in the British Virgin Islands ("BVI") on November 28, 2000 as a limited liability company under the International Business Companies Act.                                    |
|   |                                                                                                                                                                                                                                           |
|   | The Company and its subsidiaries (collectively, the "Group") are primarily engaged in the provision of information technology services ("IT services").  As of December 31, 2011, the Company's subsidiaries included the following: |

|   |                                                                   |                       | Later of           |            |
|--------|------------------------------------------------------------------------|----------------------------|--------------------|-----------------|
|   |                                                                   | Place of                   | incorporation/     | Percentage of   |
|   | Name of Subsidiary                                                     | establishment              | acquisition date   | legal ownership |
|   |                                                                   |                       |               | %               |
|   |                                                                   |                       |               |            |
|   | Nanjing Camelot Information Systems Engineering Co. Ltd.               | People's Republic of China | January 18, 2000   | 100             |
|   |   ("NCIS")                                                   | ("PRC" or "China")         |               |            |
|   | Beijing Camelot Technology Co., Ltd. ("Camelot Beijing")               | PRC                        | March 12, 2001     | 100             |
|   | Beijing Heng En Technology Co., Ltd. ("Beijing Heng En")               | PRC                        | December 31, 2002  | 100             |
|   | Shanghai Camelot Software Co., Ltd. ("Shanghai Camelot")               | PRC                        | September 30, 2004 | 100             |
|   | Entoh Digital Co., Ltd. ("Entoh")                                      | Japan                      | January 1, 2006    | 100             |
|   | Dalian Yuandong Digital Co., Ltd. ("Dalian Yuandong")                  | PRC                        | January 1, 2006    | 100             |
|   | Bayshore Consulting & Services Co., Ltd. ("Bayshore")              | PRC                        | January 1, 2006    | 100             |
|   | Triumph Consulting & Services Co., Ltd. ("Triumph")                | BVI                        | January 1, 2006    | 100             |
|   | Konwell Technologies Ltd. ("Konwell")                                  | BVI                        | January 1, 2006    | 100             |
|   | Beijing Faceita Information System Ltd. ("Faceita")                    | PRC                        | January 1, 2006    | 100             |
|   | Asialink Information Technologies (Shanghai) Co., Ltd. ("Asialink")    | PRC                        | January 1, 2006    | 100             |
|   | Kings Consulting Services Limtied                                      | Hong Kong                  | January 1, 2006    | 100             |
|   |   (Formerly King's Trading Co) ("King's")                    |                       |               |            |
|   | Taiwan Camelot Information Inc. ("Taiwan Camelot")                     | Taiwan                     | September 28, 2006 | 100             |
|   | Hwawei Digital Financial Technologies Co., Ltd. ("Hwawei")             | Taiwan                     | January 1, 2007    | 100             |
|   | Jiaxing Camelot Software Company Limited ("Jiaxing Camelot")           | PRC                        | July 17, 2007      | 100             |
|   | Beijing Red River Valley Information Technology Co., Ltd.              | PRC                        | February 1, 2008   | 100             |
|   |   ("Red River Valley")                                       |                       |               |            |
|   | Beijing Yinfeng Technology Development Co., Ltd. ("Yinfeng")           | PRC                        | April 1, 2008      | 100             |
|   | VLife Technology Co., Ltd. ("VLife")                                   | Taiwan                     | April 7, 2008      | 100             |
|   | VLife Technology (Shang Hai) Co., Ltd. ("Weisong")                     | PRC                        | April 7, 2008      | 100             |
|   | Vlife International Corp. Ltd. ("Samoa")                               | Samoa                      | April 7, 2008      | 100             |
|   | Shanghai Camelot Information Technology Co., Ltd ("SCIT")              | PRC                        | May 8, 2008        | 100             |
|   | Harmonation Inc. ("Harmonation")                                       | Taiwan                     | July 7, 2008       | 85.47           |
|   | Camelot Information Technology. Co., Ltd. ("Huaqiao")                  | PRC                        | June 29, 2009      | 100             |
|   | Kunshan Kesuo Information Consulting Co., Ltd. ("Kunshan")             | PRC                        | August 13, 2009    | 100             |
|   | Zhuhai Agree Technology Co., Ltd. ("Agree Zhuhai")                     | PRC                        | July 1, 2009       | 100             |
|   | Beijing Agree Technology Development Co., Ltd. ("Agree Beijing")       | PRC                        | July 1, 2009       | 100             |
|   | Shanghai Agree Technology Development Co., Ltd. ("Agree Shanghai")     | PRC                        | July 1, 2009       | 100             |
|   | Beijing Tansun Software Technology Co., Ltd. ("Tansun Beijing")        | PRC                        | December 30, 2009  | 100             |
|   | Xiamen Rella Software Technology Development Co., Ltd.                 | PRC                        | December 30, 2009  | 100             |
|   |   ("Xiamen Rella")                                           |                       |               |            |
|   | Kunshan Asialink Information Technology Co., Ltd. ("Asialink Kunshan") | PRC                        | March 22, 2010     | 100             |
|   | Dimension Information Technology Co., Ltd. ("Dimension")               | PRC                        | January 1, 2011    | 100             |
|   | Camelot Information Technology Consulting (Wuxi) Co., Ltd ("Wuxi")     | PRC                        | July 14, 2011      | 100             |
|   | Camelot Financial Information Technology Services Co., Ltd ("CFITS")   | PRC                        | December 19, 2011  | 100             |

----

| 1.     | ORGANIZATION AND PRINCIPAL ACTIVITIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | In 2011, to streamline the Corporate Structure, the Company dissolved Yantai Q.B. Eleven Outsourcing Service Company (“Yantai”) and Camelot Japan Co., Ltd. (“Across Japan”) since bothsubsidiaries did not have substantive business operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Basis of presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The consolidated financial statements of the Group were prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Basis of consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The consolidated financial statements include the financial statements of the Company and its wholly owned and majority owned subsidiaries.  All inter-company transactions and balances have been eliminated upon consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses in the financial statements and accompanying notes.  Actual results could differ from those estimates.  Significant accounting estimates reflected in the Group's consolidated financial statements include revenue recognition, valuation allowance for deferred tax assets, collectability of accounts receivable, estimated useful lives and impairment of property and equipment, goodwill and other intangible assets, and fair value of share options and ordinary shares. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Cash and cash equivalents consist of cash on hand and highly liquid investments, which are unrestricted from withdrawal or use, or which have remaining maturities of three months or less when purchased.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Term deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Term deposits consist of deposits placed with financial institutions with original maturity terms of greater than three months but less than one year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Restricted cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The Group is required to maintain certain deposits with banks so that bank guarantee letters can be issued to the Group for the purpose of trading transactions.  Cash held in such accounts is normally restricted for a period of three months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued |
|--------|--------------------------------------------------------|
|   |                                                   |
|   | Fair value                                             |

|   | The Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures in determining and disclosing certain fair value measurements. ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market‐based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three‐tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Level I - Observable inputs such as quoted prices in active markets for identical, unrestricted assets, or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Level II - Quoted prices for similar assets or liabilities, or inputs other than quoted prices in active markets that are observable, either directly or indirectly.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Level III - Unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions about the assumptions market participants would use in pricing the asset or liability. Valuation techniques include use of option‐pricing models, discounted cash flows models, and similar techniques.                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The Group's financial instruments include cash and cash equivalents, restricted cash, short-term investment, accounts receivable, term deposits, accounts payable, and bank borrowings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The carrying values of cash and cash equivalents, restricted cash, accounts receivable, term deposits, and accounts payable approximate their fair values due to short-term maturities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The carrying amounts of bank borrowings approximate their fair values as the bank borrowings bear variable interest rates which approximate the market interest rate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                         |
|   | Allowance for doubtful accounts                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                         |
|   | Accounts receivables represent those receivables derived in the ordinary course of business.  The Group establishes an allowance for doubtful accounts  based upon estimates, historical experience and other factors surrounding the credit risk of specific customers. |
|   |                                                                                                                                                                                                                                                                                         |
|   | Inventories                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                         |
|   | Inventories are stated at the lower of cost or market value.  Cost is determined using the weighted average method.  Inventories include raw materials and consumables and hardware purchased from third party vendors.                                                  |
|   |                                                                                                                                                                                                                                                                                         |
|   | Property and equipment, net                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                         |
|   | Property and equipment are stated at cost less accumulated depreciation and amortization.  Depreciation and amortization are provided using the straight-line method over the following estimated useful lives:                                                                    |

|   | Building                       |   | 30 years                                             |
|--------|--------------------------------|--------|------------------------------------------------------|
|   | Furniture and office equipment |   | 5 years                                              |
|   | Motor vehicles                 |   | 5 years                                              |
|   | Leasehold improvements         |   | Shorter of the lease terms or estimated useful lives |

|   | Acquired intangible assets with definite lives                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | Acquired intangible assets, other than goodwill, are initially measured and recorded at their fair values.  Customer relationships, SAP certificate and contract backlogs are amortized based on the estimated attrition pattern of the acquired intangibles. System software, completed technology and non-compete agreement are amortized based on straight-line method or sum of the years digits method over the following estimated economic lives: |

|   | Customer relationships |   | 3-10 years    |
|--------|------------------------|--------|---------------|
|   | SAP certificate        |   | 3.8 years     |
|   | Contract backlogs      |   | 0.3-3.5 years |
|   | System software        |   | 10 years      |
|   | Completed technology   |   | 2.25-10 years |
|   | Non-compete agreement  |   | 3 years       |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Impairment of long-lived assets with definite lives                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable.  When these events occur, the Group measures impairment by comparing the carrying values of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition.  If the sum of the expected undiscounted cash flows is less than the carrying amounts of the assets, the Group would recognize an impairment loss based on the fair values of the assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | Impairment of goodwill and indefinite-lived intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The Group reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist annually or more frequently if events and circumstances indicate that they might be impaired. Specifically, goodwill impairment is determined using a two-step process. The first step compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being a discounted cash flow. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | The impairment test for other intangible assets not subject to amortization consists of a comparison of the fair value of the intangible asset with its carrying value. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Project deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Project deposits represent the amounts paid by the Group to certain customers to guarantee fulfillment of all the terms of contracts.  The deposits will be refunded by the customers once the contract terms are fulfilled.  Historically, deposits were returned as the Group met defined performance goals, service levels and completion schedules as set forth in the contracts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Research and development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Research and development costs consist of expenditures incurred in the development of new software modules and products, either as part of the internally used software or in conjunction with anticipated customer projects.  Technological feasibility for the Company's software products is reached shortly before the products are released for sale.  To date, costs incurred after technological feasibility was established and prior to completion of software development have not been material, and accordingly, the Group has expensed all research and development costs when incurred.                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The Group provides its services through two services lines: (i) enterprise application services and (ii) financial industry IT services.  Enterprise application services primarily consist of packaged software implementation, software application development, support and maintenance services.  Financial industry IT services primarily consist of system software support and maintenance, application software development and implementation services as well as consulting services in the financial industry, principally for banks and insurance companies.                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Revenues are generated from either fixed-price or time-and-expense contracts.  Revenue is considered realizable and earned when all of the following criteria are met: persuasive evidence of a sales arrangement exists; delivery has occurred or services have been rendered; the price is fixed or determinable; and collectability is reasonably assured.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Time-and-expense contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | Revenues from time-and-expense contracts are recognized as the related services are rendered assuming all other basic revenue recognition criteria are met.  Under time-and-expense contracts, the Group is reimbursed for actual hours incurred at negotiated hourly billing rates.  Customers may terminate the contracts at any time before the work is completed but are obligated to pay the actual service hours incurred through the termination date at the contract billing rate.  The rights to software developed by the Group on behalf of its customers belong to the customers and the Group does not have the option to acquire such rights from its customers.  Net revenues recognized for time-and-expense contracts totaled US$59,667, US$99,071 and US$121,762 for the years ended December 31, 2009, 2010 and 2011, respectively. |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Revenue recognition - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Fixed-price contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Revenues from service-only fixed-price contracts require the Group to perform services for systems design, planning and consulting throughout the contractual period, which is generally less than one year.  Revenues from this type of arrangements are generally recognized using the proportional performance method based on the proportion of actual service hours incurred to the budgeted total service hours.  All of the Group's service offerings are similar in nature and the Group has a long history of providing these services resulting in its ability to reasonably estimate the service hours expected to be incurred on each project, and there are no retention provisions. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | To date, the Group has not incurred a material loss on any contracts.  However, as a policy, provisions for estimated losses on such engagements will be made during the period in which a loss becomes probable and can be reasonably estimated.                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The Group, under some contracts, is subject to payment penalties if it fails to complete the projects within a specified period of time.  To date, the Company has not incurred a material penalty on any contracts.  However, as a matter of policy, the Group considers contract provisions for penalties when estimating the total revenue on a contract and evaluates such provisions throughout the life of the contract.                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The Group also enters into multiple-element fixed-price arrangements, in which the deliverables mainly include licenses of self-developed core software and third-party software, and related services such as customization, modification, implementation and integration ("project services") and support and maintenance services which include bug fixes, technical support via telephone and site visit, and unspecified upgrades on a when-and-if-available basis.                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The Group accounts for a deliverable in an arrangement of multiple elements as a separate unit of accounting when the following criteria are met.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | The functionality of the delivered element(s) is not dependent on the undelivered element(s); |
|   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | There is vendor-specific objective evidence (VSOE) of fair value of the undelivered element(s).  VSOE of fair value is based on the price charged when the deliverable is sold separately by the Group on a regular basis; and |
|   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | Delivery of the delivered element(s) represents the culmination of the earnings process for that element(s). |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Revenue recognition - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Fixed-price contracts - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | In some cases, the VSOE of fair value of the support and maintenance services, which is the last element to be delivered, is established based on standalone sales, however, no such evidence exists for other elements.  For these arrangements, under the residual method, the amount of consideration allocated to elements other than the support and maintenance services equals the total arrangement consideration less the VSOE of fair value of the support and maintenance services, which is deferred and recognized as revenue using the proportional performance method over the project services period.  The proportional performance is determined based on the proportion of actual service hours incurred to the budgeted service hours.  When revenue is deferred, the related cost is also deferred.  The arrangement consideration allocated to the support and maintenance services is recognized as revenue ratably over the support and maintenance services period, which is usually one to two years. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | When the VSOE of fair value of the support and maintenance services does not exist, the entire arrangement is accounted for as one accounting unit resulting in revenue being recognized on a straight line basis over the support and maintenance services period once the support and maintenance services are the only undelivered element.  Accordingly, the accumulated contract cost is deferred and recognized as cost of revenue ratably over the same period as revenue is recognized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Net revenues recognized for fixed-price contracts totaled US$58,336, US$93,792 and US$105,358 for the years ended December 31, 2009, 2010 and 2011, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The Group reports revenues net of applicable business taxes and the related surcharges.  The Company's subsidiaries in the PRC are subject to a 5% business tax and related surcharges on the revenues earned from providing services, except for that Camelot Nanjing qualified for business tax at 3%.  Business taxes and the related surcharges for the years ended December 31, 2009, 2010 and 2011 were US$3,865, US$6,391 and US$7,017 respectively, and were recorded as a reduction of revenues.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The Group receives value added taxes ("VAT") rebates from tax authority as an incentive to encourage certain high-tech industries. VAT rebates are recorded as revenue when the Group pays the relevant VAT and properly files the rebate application to tax authority when the related rebates become receivable. The Group has recorded US$11, US$430, and US$271of VAT rebate in revenue for the years ended December 31, 2009, 2010 and 2011, respectively. The VAT rebate revenues are classified into the relevant revenue categories.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Government subsidies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Subsidies are recorded as a liability when received and recognized as other operating income over the periods in which the Group recognizes the related costs for which the subsidies are intended to compensate.  If the costs for which the subsidy is intended to compensate have already been incurred, the Group reports the subsidies as other operating income when received.                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Advertising costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Advertising costs are expensed as incurred and such expenses were minimal for the periods presented.  Advertising costs have been included as part of selling and marketing expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Operating leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Leases where the rewards and risks of ownership of assets primarily remain with the leasing company are accounted for as operating leases.  Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Current income taxes are provided for in accordance with the laws of the relevant tax authorities.  Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements.  Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized.  The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics.                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority.  An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.  Interest and penalties on income taxes will be classified as a component of the provisions for income taxes.  The Group did not identify significant unrecognized tax benefits for years ended December 31, 2009, 2010 and 2011.  The Group did not incur any interest and penalties related to potential underpaid income tax expenses and also believed that the Group's unrecognized tax benefits did not change significantly within 12 months from December 31, 2011. |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The functional and reporting currency of the Company is the United States dollar ("U.S. dollar").  The financial records of the Company's subsidiaries located in the PRC, Japan, Taiwan and Hong Kong are maintained in their local currencies, the Renminbi ("RMB"), Japanese Yen ("Yen"), Taiwan Dollars ("NT$") and Hong Kong Dollars ("HK$"), respectively, which are also the functional currencies of these entities.                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange ruling at the balance sheet date.  Transactions in currencies other than the functional currency during the year are converted into functional currency at the applicable rates of exchange prevailing when the transactions occurred.  Transaction gains and losses are recognized in the statements of operations.                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | The Group's entities with functional currency of RMB, Yen, NT$ and HK$ translate their operating results and financial position into the U.S. dollar, the Company's reporting currency.  Assets and liabilities are translated using the exchange rates in effect on the balance sheet date.  Revenues, expenses, gains and losses are translated using the average rate for the year.  Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income.                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Comprehensive income includes net income and foreign currency translation adjustments.  Comprehensive income is reported in the consolidated statements of equity and comprehensive income.                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Significant risks and uncertainties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Foreign currency risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | RMB is not freely convertible into other currencies.  All foreign exchange transactions involving RMB must take place through the People's Bank of China or other institutions authorized to trade foreign currency.  The exchange rate adopted for the foreign exchange transactions are the rates of exchange quoted by the People's Bank of China that are determined largely by supply and demand.  The Group's cash, term deposit and restricted cash balances in RMB as of December 31, 2009, 2010 and 2011 were RMB186, 999,368, RMB202, 722,790 and RMB436, 430,586 respectively. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | During the presented periods, the Group also incurred foreign currency risk on sales denominated in U.S. dollars and Japanese Yen.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

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| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Significant risks and uncertainties - continued                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Concentration of credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash, accounts receivable and term deposits.  The Group places the majority of its cash and term deposits with financial institutions located in the PRC and the United States of America.  The Group conducts credit evaluations of customers and generally do not require collateral or other security from their customers. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Details of customers accounting for 10% or more of total net revenues were as follows:                                                                                                                                                                                                                                                                                                                                                                           |

|   |       |   | Years ended December 31, |   |
|--------|------------|--------|--------------------------|--------|
|   |       |   | 2009                     |   |   | % |   |   | 2010 |   |   | % |   |   | 2011 |   |   | % |   |
|   |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   | Customer A |   |                     | 37,315 |   |   |   | 32 |   |   |   | 64,987 |   |   |   | 34 |   |   |   | 77,387 |   |   |   | 34 |   |

|   | Details of customers accounting for 10% or more of accounts receivable were as follows: |
|--------|-----------------------------------------------------------------------------------------|

|   |       |   | As of December 31, |   |
|--------|------------|--------|--------------------|--------|
|   |       |   | 2010               |   |   | % |   |   | 2011 |   |   | % |   |
|   |       |   |               |   |   |   |   |   |   |   |   |   |   |
|   | Customer A |   |               | 35,843 |   |   |   | 34 |   |   |   | 50,528 |   |   |   | 37 |   |

|   | Net income per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Basic net income per ordinary share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.  Diluted net income per ordinary share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares.                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The Group's convertible preferred shares were participating securities as the preferred shares participated in undistributed earnings on an as-converted basis.  Accordingly, the Group used the two-class method of computing net income per share, for ordinary and preferred shares according to their participation rights in undistributed earnings.  Under this method, undistributed net income was allocated on a pro rata basis to the ordinary and preferred shares to the extent that each class would share net income for the period. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The Group had convertible preferred shares and employee share options which could potentially dilute basic earnings per share for the periods presented.  To calculate the number of shares for diluted net income per share, the effect of the convertible preferred shares was computed using the as-converted method and the effect of the employee share options was computed using the treasury stock method.                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The net income per share information for all periods presented has reflected the 4-for-1 stock split effected in May 2010 (See Note 16 "Ordinary shares ").                                                                                                                                                                                                                                                                                                                                                                                                            |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Share-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Share-based payment transactions with employees, such as share options are measured based on the grant date fair value of the equity instrument.  The Group recognizes the compensation costs net of a forfeiture rate on a straight-line basis, over the requisite service period of the award, which is generally the vesting period of the award.  The amount of compensation expenses recognized for any period is not less than the portion of the grant date fair value of the options vested during that period.  The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates.  Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of stock compensation expense to be recognized in future periods. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | A change in any of the terms or conditions of share options is accounted for as a modification of the share incentive plan. Therefore, the Group calculates incremental compensation cost of a modification as the excess of the fair value of the modified option over the fair value of the original option immediately before its terms are modified, measured based on the share price and other pertinent factors at the modification date. For vested options, the Group would recognize incremental compensation cost in the period of the modification occurred and for unvested options, the Group would recognize, over the remaining requisite service period, the sum of the incremental compensation cost and the remaining unrecognized compensation cost for the original award on the modification date.                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Segment reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The Group's chief operating decision maker has been identified as the Chief Executive Officer ("CEO"), who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group.  The Group has one operating segment.  The Group's revenue and net income are substantially derived from enterprise application services and financial industry IT services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The following table summarizes the Group's net revenues and long-lived assets in different geographic locations in U.S. dollars:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

|               |   | Years ended December 31, |    |
|--------------------|--------|--------------------------|---------|
|               |   | 2009                     |    |   | 2010 |   |   | 2011 |   |
|               |   |                     |    |   |   |   |   |   |   |
| Net revenues       |   |                     |    |   |   |   |   |   |   |
|   PRC    |   |                     | 88,790  |   |   |   | 160,897 |   |   |   | 195,076 |   |
|   Taiwan |   |                     | 16,777  |   |   |   | 14,963 |   |   |   | 9,036 |   |
|   Japan  |   |                     | 11,642  |   |   |   | 14,663 |   |   |   | 21,120 |   |
|   Others |   |                     | 794     |   |   |   | 2,340 |   |   |   | 1,888 |   |
| Total              |   |                     | 118,003 |   |   |   | 192,863 |   |   |   | 227,120 |   |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued |
|--------|--------------------------------------------------------|
|   |                                                   |
|   | Segment reporting - continued                          |

|               |   | As of December 31, |   |
|--------------------|--------|--------------------|--------|
|               |   | 2010               |   |   | 2011 |   |
| Long-lived assets  |   |               |   |   |   |   |
|   PRC    |   |               | 66,213 |   |   |   | 49,042 |   |
|   Taiwan |   |               | 6,098  |   |   |   | 1,649 |   |
|   Others |   |               | 1,765  |   |   |   | 1,731 |   |
| Total              |   |               | 74,076 |   |   |   | 52,422 |   |

|   | Geographic area information for net revenues is summarized based on the countries in which the customers are located. |
|--------|-----------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                  |
|   | The following table summarizes the Group’s net revenues by service line:                                        |

|                                  |   | Years ended December 31, |    |
|---------------------------------------|--------|--------------------------|---------|
|                                  |   | 2009                     |    |   | 2010 |   |   | 2011 |   |
|                                  |   |                     |    |   |   |   |   |   |   |
| Enterprise application services       |   |                     | 78,525  |   |   |   | 126,396 |   |   |   | 158,733 |   |
| Hardware and software product         |   |                     | 898     |   |   |   | 159 |   |   |   | 448 |   |
|                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Total enterprise application services |   |                     | 79,423  |   |   |   | 126,555 |   |   |   | 159,181 |   |
|                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Financial industry services           |   |                     | 34,920  |   |   |   | 59,012 |   |   |   | 59,486 |   |
| Hardware and software product         |   |                     | 3,660   |   |   |   | 7,296 |   |   |   | 8,453 |   |
|                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Total financial industry services     |   |                     | 38,580  |   |   |   | 66,308 |   |   |   | 67,939 |   |
|                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Total net revenues                    |   |                     | 118,003 |   |   |   | 192,863 |   |   |   | 227,120 |   |

|   | Business combinations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Business combinations are recorded using the acquisition method of accounting. The assets acquired, the liabilities assumed, and any noncontrolling interest of the acquiree at the acquisition date, if any, are measured at their fair values as of that date.  Goodwill is recognized and measured as the excess of the total consideration transferred plus the fair value of any noncontrolling interest of the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired.  Common forms of the consideration made in acquisitions include cash and common equity instruments.  Consideration transferred in a business acquisition is measured at the fair value as at the date of acquisition.  For shares issued in a business combination, the Company has estimated the fair value as of the date of acquisition. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Where the consideration in an acquisition includes contingent consideration the payment of which depends on the achievement of certain specified conditions post-acquisition, the contingent consideration is recognized and measured at its fair value at the acquisition date and if recorded as a liability it is subsequently carried at fair value with changes in fair value reflected in earnings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Recently issued accounting standards not yet adopted                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | In May 2011, the FASB issued an authoritative pronouncement on fair value measurement. The guidance is the result of joint efforts by the FASB and International Accounting Standards Board to develop a single, converged fair value framework. The guidance is largely consistent with existing fair value measurement principles in US GAAP. The guidance expands the existing disclosure requirements for fair value measurements and makes other amendments, mainly including:   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Highest-and-best-use and valuation-premise concepts for nonfinancial assets—the guidance indicates that the highest-and-best-use and valuation-premise concepts only apply to measuring the fair value of nonfinancial assets. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Application to financial assets and financial liabilities with offsetting positions in market risks or counterparty credit risk—the guidance permits an exception to fair value measurement principles for financial assets and financial liabilities (and derivatives) with offsetting positions in market risks or counterparty credit risk when several criteria are met. When the criteria are met, an entity can measure the fair value of the net risk position. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Premiums or discounts in fair value measure—the guidance provides that premiums or discounts that reflect size as a characteristic of the reporting entity’s holding (specifically, a blockage factor that adjusts the quoted price of an asset or a liability because the market’s normal daily trading volume is not sufficient to absorb the quantity held by the entity) rather than as a characteristic of the asset or liability (for example, a control premium when measuring  the fair value of a controlling interest) are not permitted in a fair value measurement. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Fair value of an instrument classified in a reporting entity’s stockholders’ equity—the guidance prescribes a model for measuring the fair value of an instrument classified in stockholders’ equity; this model is consistent with the guidance on measuring the fair value of liabilities. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Disclosures about fair value measurements—the guidance expands disclosure requirements, particularly for Level 3 inputs. Required disclosures include: |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (i) | For fair value measurements categorized in Level 3 of the fair value hierarchy: (1) a quantitative disclosure of the unobservable inputs and assumptions used in the measurement, (2) a description of the valuation process in place (e.g., how the entity decides its valuation policies and procedures, as well as changes in its analyses of fair value measurements, from period to period), and (3) a narrative description of the sensitivity of the fair value to changes in unobservable inputs and interrelationships between those inputs. |

----

| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | (ii) | The level in the fair value hierarchy of items that are not measured at fair value in the statement of financial position but whose fair value must be disclosed. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | The guidance is to be applied prospectively and is effective for interim and annual periods beginning after December 15, 2011, for public entities. Early application by public entities is not permitted. The Company does not expect the adoption of this guidance to have a significant effect on its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | In June 2011, the FASB issued an authoritative pronouncement to require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The guidance does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The guidance should be applied retrospectively. For public entities, the guidance is effective for fiscal years and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. In December 2011, the FASB issued an authoritative pronouncement related to deferral of the effective date for amendments to the presentation of reclassifications of items out of accumulated other comprehensive income. This guidance allows the FASB to redeliberate whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. While the FASB is considering the operational concerns about the presentation requirements for reclassification adjustments and the needs of financial statement users for additional information about reclassification adjustments, entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before update the pronouncement issued in June 2011. The Company does not expect the adoption of these pronouncements to have a significant effect on its consolidated financial statements. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | In September 2011, the FASB issued an authoritative pronouncement related to testing goodwill for impairment. The guidance is intended to simplify how entities, both public and nonpublic, test goodwill for impairment. The guidance permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued. The Company does not expect the adoption of this pronouncement to have a significant effect on its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

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| 2.     | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | In December 2011, the FASB has issued an authoritative pronouncement related to Disclosures about Offsetting Assets and Liabilities. The guidance requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The Company does not expect the adoption of the guidance to have a material effect on its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| 3.     | ACQUISITIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Agree                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | In July 2009, the Group acquired 100% equity interest of Agree Zhuhai and its affiliates (collectively, "Agree").  The initial consideration included US$7,320 in cash and 4,866,180 ordinary shares of the Company with a fair value of US$1.25 per share estimated by American Appraisal, an independent valuation firm, on the acquisition date.  In addition, the Group agreed to pay a performance-based consideration to Agree in cash between RMB63,000,000 (approximately US$9,265) and RMB75,000,000 (approximately US$11,029) no later than January 1, 2012 as determined using a specified formula based on Agree's earnings in 2009 and 2010, of which the fair value on the acquisition date was US$8,303 estimated by American Appraisal.  Therefore the total consideration was US$21,718.  The cash portion was fully paid in July 2009 and the ordinary shares were issued in September 2009.  Agree provides comprehensive software solutions for automating teller systems and branch operations to customers in the financial services industry in China through developing financial software platforms and applications.  The transaction was accounted for as a business combination using the acquisition method of accounting.  The operating results of Agree have been included in the Group's consolidated financial statements since the date of acquisition. US$8,082 of net revenues generated by Agree in the year of 2009 was included in the Group's consolidated statement of operations for 2009. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The purchase consideration of US$21,718 was allocated as follows as of the acquisition date:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

|                        |   |    |   | Weighted average |
|-----------------------------|--------|---------|--------|------------------|
|                        |   | Amounts |   | useful lives     |
| Cash                        |   |    | 1,635  |             |   |
| Restricted Cash             |   |    | 739    |             |   |
| Accounts receivable         |   |    | 6,656  |             |   |
| Inventory                   |   |    | 55     |             |   |
| Other current assets        |   |    | 785    |             |   |
| Property and equipment, net |   |    | 426    |             |   |
| Intangible assets:          |   |    |   |             |   |
| Trade name                  |   |    | 4,285  |             | Indefinite |
| Contract backlogs           |   |    | 642    |             | 1 year |
| Customer relationships      |   |    | 5,239  |             | 4.5 years |
| Other current liabilities   |   |    | (2,619 | )                |   |
| Deferred tax liabilities    |   |    | (1,026 | )                |   |
| Goodwill                    |   |    | 4,901  |             |   |
|                        |   |    |   |             |   |
| Total                       |   |    | 21,718 |             |   |

----

| 3.     | ACQUISITIONS - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | Tansun                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | On December 30, 2009, the Group acquired 100% equity interest of Tansun Beijing and its affiliates (collectively "Tansun").  The initial consideration included US$8,790 in cash and 3,932,000 ordinary shares of the Company with a fair value of US$1.47 per share estimated by American Appraisal, an independent valuation firm, on the acquisition date.  In addition, the Group agreed to pay a performance-based consideration in cash up to RMB40,000,000 (approximately US$5,860) as determined using a specified formula based on Tansun's earnings in 2010 and 2011, of which the fair value on the acquisition date was US$3,969 estimated by American Appraisal.  Therefore the total consideration was US$18,519.  The cash portion US$ 8,359 was paid during 2010 and the ordinary shares were issued in May 2010. Tansun provides core business and enterprise software solutions and services for the financial services industry in China, including the consultation, design, development, implementation, testing and maintenance for key functions, such as corporate loan, risk management, supply chain financing, commercial loan, cash management, and internal collaboration and workflow.  The transaction was accounted for as a business combination using the acquisition method of accounting.  The operating results of Tansun have been included in the Group's consolidated financial statements since the date of acquisition. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   | The purchase consideration of US$18,519 was allocated as follows as of the acquisition date:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

|                                  |   |    |   | Weighted average |
|---------------------------------------|--------|---------|--------|------------------|
|                                  |   | Amounts |   | useful lives     |
|                                  |   |    |   |             |
| Cash                                  |   |    | 1,835  |             |   |
| Accounts receivable                   |   |    | 3,539  |             |   |
| Other current assets                  |   |    | 705    |             |   |
| Property and equipment, net           |   |    | 1,088  |             |   |
| Intangible assets:                    |   |    |   |             |   |
| Trade name                            |   |    | 3,024  |             | Indefinite |
| Contract backlogs                     |   |    | 584    |             | 3.5 year |
| Customer relationships                |   |    | 2,580  |             | 4 years |
| Completed technology                  |   |    | 3,602  |             | 5 years |
| Bank borrowings                       |   |    | (1,428 | )                |   |
| Other current liabilities             |   |    | (3,978 | )                |   |
| Bank borrowings, less current portion |   |    | (374   | )                |   |
| Deferred tax liabilities              |   |    | (1,379 | )                |   |
| Goodwill                              |   |    | 8,721  |             |   |
|                                  |   |    |   |             |   |
| Total                                 |   |    | 18,519 |             |   |

|   | As of December 31, 2011, the Company had paid RMB7,500,000 (approximately US$1,176) in the year of 2011, and the remaining RMB12,500,000 (approximately US$1,986) was reflected in consideration payable in connection with business acquisition as of December 31, 2011 (see note 14). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 3.     | ACQUISITIONS - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Dimension                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | On January 1, 2011, the Company acquired 100% equity interest of Dimension InfoTech Co. Ltd and its affiliates (collectively, "Dimension"), which provide SAP project implementation and SAP-based customized solutions. The initial consideration includes US$4,000 in cash and 1,152,352 ordinary shares of the Company with a fair value of US$5,341 based on the closing market price of the Company's ADSs on the acquisition date. 30% of the ordinary shares are restricted from transfer or sale for one year from the acquisition date and 70% are restricted from transfer or sale for two years from the acquisition date. In addition, the Company agreed to pay a performance-based contingent consideration to Dimension in cash as determined using a specified formula based on Dimension’s earnings in 2011 and 2012, of which the fair value on the acquisition date was US$5,155 estimated by American Appraisal. As a result, the total consideration as of the date of acquisition was US$14,496. The cash portion US$ 4,000 was paid during 2011 and the ordinary shares were issued in August 2011. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The transaction was accounted for as a business combination using the acquisition method of accounting.  The operating results of Dimension have been included in the Group’s consolidated financial statements since the date of acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | The purchase consideration of US$14,496 was allocated as follows as of the acquisition date:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

|                                  |   |    |   | Weighted average |
|---------------------------------------|--------|---------|--------|------------------|
|                                  |   | Amounts |   | useful lives     |
|                                  |   |    |   |             |
| Cash                                  |   |    | 1,506  |             |   |
| Term deposits                         |   |    | 303    |             |   |
| Accounts receivable                   |   |    | 3,593  |             |   |
| Prepaid expenses and other receivable |   |    | 1,021  |             |   |
| Property and equipment, net           |   |    | 146    |             |   |
| Intangible assets:                    |   |    |   |             |   |
| Trade name                            |   |    | 2,197  |             | Indefinite |
| Contract backlogs                     |   |    | 641    |             | 1 year |
| Customer relationships                |   |    | 727    |             | 5 years |
| Non-compete agreement                 |   |    | 782    |             | 3 years |
| Accounts payable                      |   |    | (1,091 | )                |   |
| Deferred revenue                      |   |    | (129   | )                |   |
| Income taxes payable                  |   |    | (79    | )                |   |
| Accrued expenses and other payables   |   |    | (982   | )                |   |
| Deferred tax liabilities              |   |    | (652   | )                |   |
| Goodwill                              |   |    | 6,513  |             |   |
|                                  |   |    |   |             |   |
| Total                                 |   |    | 14,496 |             |   |

----

| 3.     | ACQUISITIONS - continued                                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                            |
|   | Dimension - continued                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                            |
|   | As of December 31, 2011, since Dimension reached the aforementioned earnings requirement for 2011, RMB19,800,000 (approximately US$3,147) was reflected in consideration payable in connection with business acquisition as of December 31, 2011 (see note 14). |
|   |                                                                                                                                                                                                                                                            |
|   | No supplemental information on a pro forma basis has been presented for the above acquisitions as such information is not available without unreasonable effort and cost.                                                                                       |
|   |                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                            |
| 4.     | ACCOUNTS RECEIVABLE                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                            |
|   | Accounts receivable consisted of the following:                                                                                                                                                                                                                 |

|                                  |   | As of December 31, |   |
|---------------------------------------|--------|--------------------|--------|
|                                  |   | 2010               |   |   | 2011 |   |
|                                  |   |               |   |   |   |   |
| Billed receivable                     |   |               | 42,584 |   |   |   | 48,719 |   |
| Notes receivable                      |   |               | 502    |   |   |   | 1,841 |   |
| Less: Allowance for doubtful accounts |   |               | (14    | ) |   |   | (2,726 | ) |
|                                  |   |               |   |   |   |   |   |   |
| Billed accounts receivable, net       |   |               | 43,072 |   |   |   | 47,834 |   |
|                                  |   |               |   |   |   |   |   |   |
| Unbilled receivable                   |   |               | 63,014 |   |   |   | 88,139 |   |
| Less: Allowance for doubtful accounts |   |               | (390   | ) |   |   | (927 | ) |
|                                  |   |               |   |   |   |   |   |   |
| Unbilled accounts receivable, net     |   |               | 62,624 |   |   |   | 87,212 |   |

----

| 4.     | ACCOUNTS RECEIVABLE - continued                                                                                                                                                                                                                                                                            |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                       |
|   | Notes receivable represents bank acceptance bills, which are transferable and has short term maturity.                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                       |
|   | Unbilled receivables represent amounts earned under contracts in progress but not billable at the respective balance sheet dates.  These amounts become billable according to the contract terms, which usually consider the achievement of certain milestones or the completion of the project. |
|   |                                                                                                                                                                                                                                                                                                       |
|   | An analysis of the allowance for doubtful accounts is as follows:                                                                                                                                                                                                                                          |

|                            |   | As of December 31, |   |
|---------------------------------|--------|--------------------|--------|
|                            |   | 2010               |   |   | 2011 |   |
|                            |   |               |   |   |   |   |
| Balance at beginning of year    |   |               | 795    |   |   |   | 404 |   |
| Provision for doubtful accounts |   |               | 15     |   |   |   | 3,235 |   |
| Write-offs                      |   |               | (403   | ) |   |   | (25 | ) |
| Exchange rate differences       |   |               | (3     | ) |   |   | 39 |   |
|                            |   |               |   |   |   |   |   |   |
| Balance at end of year          |   |               | 404    |   |   |   | 3,653 |   |

| 5.     | INVENTORIES                           |
|--------|---------------------------------------|
|   |                                  |
|   | Inventory consisted of the following: |

|                         |   | As of December 31, |   |
|------------------------------|--------|--------------------|--------|
|                         |   | 2010               |   |   | 2011 |   |
|                         |   |               |   |   |   |   |
| Raw material and consumables |   |               | 110    |   |   |   | 115 |   |
| Third-party hardware         |   |               | 1,524  |   |   |   | 461 |   |
|                         |   |               |   |   |   |   |   |   |
| Total                        |   |               | 1,634  |   |   |   | 576 |   |

----

| 6. | PREPAID EXPENSES AND OTHER CURRENT ASSETS |
|----|-------------------------------------------|

|                                  |   | As of December 31, |   |
|---------------------------------------|--------|--------------------|--------|
|                                  |   | 2010               |   |   | 2011 |   |
|                                  |   |               |   |   |   |   |
| Advances to suppliers                 |   |               | 6,115  |   |   |   | 10,617 |   |
| Advances to employees                 |   |               | 2,687  |   |   |   | 2,678 |   |
| Tender and other utility deposit      |   |               | 948    |   |   |   | 758 |   |
| Reimbursable follow-on offering costs |   |               | 836    |   |   |   | - |   |
| Prepaid rental                        |   |               | 301    |   |   |   | 353 |   |
| Interest receivable                   |   |               | -      |   |   |   | 335 |   |
| Tax refund                            |   |               | -      |   |   |   | 435 |   |
| Others                                |   |               | 533    |   |   |   | 581 |   |
|                                  |   |               |   |   |   |   |   |   |
|                                  |   |               | 11,420 |   |   |   | 15,757 |   |

|   | As of December 31, 2010 and 2011, tender and other utility deposit mainly consisted of deposit which was made as part of the bidding process on projects.                  |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                       |
|   | Reimbursable follow-on offering costs represent costs incurred for the follow-on offering completed in December 2010 which was reimbursed by selling shareholders in 2011. |

| 7. | PROPERTY AND EQUIPMENT, NET |
|----|-----------------------------|

|                           |   | As of December 31, |   |
|--------------------------------|--------|--------------------|--------|
|                           |   | 2010               |   |   | 2011 |   |
|                           |   |               |   |   |   |   |
| Building                       |   |               | 2,443  |   |   |   | 2,561 |   |
| Leasehold improvements         |   |               | 615    |   |   |   | 493 |   |
| Furniture and office equipment |   |               | 4,792  |   |   |   | 5,879 |   |
| Motor vehicles                 |   |               | 1,157  |   |   |   | 1,170 |   |
|                           |   |               |   |   |   |   |   |   |
|                           |   |               | 9,007  |   |   |   | 10,103 |   |
| Less: Accumulated depreciation |   |               | (4,327 | ) |   |   | (5,430 | ) |
|                           |   |               |   |   |   |   |   |   |
| Property and equipment, net    |   |               | 4,680  |   |   |   | 4,673 |   |

|   | Depreciation expenses for the years ended December 31, 2009, 2010 and 2011 were US$634, US$962, and US$1,087 respectively. |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

| 8.     | INTANGIBLE ASSETS                                                                                              |
|--------|----------------------------------------------------------------------------------------------------------------|
|   |                                                                                                           |
|   | Intangible assets and their related accumulated amortization as of December 31, 2010 and 2011 were as follows: |

|                                             |   | As of December 31, |    |
|--------------------------------------------------|--------|--------------------|---------|
|                                             |   | 2010               |    |   | 2011 |   |
|                                             |   |               |    |   |   |   |
| Intangible assets not subject to amortization:   |   |               |    |   |   |   |
| Trade names                                      |   |               | 15,849  |   |   |   | 18,655 |   |
| Intangible assets subject to amortization:       |   |               |    |   |   |   |   |   |
| Customer relationships                           |   |               | 19,239  |   |   |   | 20,739 |   |
| Contract backlogs                                |   |               | 1,813   |   |   |   | 2,555 |   |
| SAP certificate                                  |   |               | 18      |   |   |   | 19 |   |
| System software                                  |   |               | 925     |   |   |   | 820 |   |
| Completed technology                             |   |               | 4,566   |   |   |   | 4,871 |   |
| Non-compete agreement                            |   |               | -       |   |   |   | 970 |   |
|                                             |   |               |    |   |   |   |   |   |
|                                             |   |               | 42,410  |   |   |   | 48,629 |   |
|                                             |   |               |    |   |   |   |   |   |
| Less: Accumulated amortization                   |   |               |    |   |   |   |   |   |
| Customer relationships                           |   |               | (12,410 | ) |   |   | (16,164 | ) |
| Contract backlogs                                |   |               | (1,450  | ) |   |   | (2,365 | ) |
| SAP certificate                                  |   |               | (18     | ) |   |   | (19 | ) |
| System software                                  |   |               | (346    | ) |   |   | (273 | ) |
| Completed technology                             |   |               | (1,555  | ) |   |   | (2,547 | ) |
| Non-compete agreement                            |   |               | -       |   |   |   | (459 | ) |
|                                             |   |               |    |   |   |   |   |   |
|                                             |   |               | (15,779 | ) |   |   | (21,827 | ) |
| Accumulated impairment loss of intangible assets |   |               | -       |   |   |   | (8,552 | ) |
|                                             |   |               |    |   |   |   |   |   |
| Intangible assets, net                           |   |               | 26,631  |   |   |   | 18,250 |   |

|   | Amortization expenses were US$3,860, US$6,309 and US$5,285 for years ended December 31, 2009, 2010 and 2011, respectively.  The Group expects to record amortization expenses of approximately US$2,256, US$1,406, US$409, US$282, US$152 and US$97 for each year of 2012, 2013, 2014, 2015, 2016 and thereafter, respectively.                                                                                                                                                                                                                                                    |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | Due to departures of the Company's previous chief executive officer of Agree and some of his team members, the Company performed an assessment of the carrying value of intangible assets as of September 30, 2011. Based on that assessment, the Company recorded an impairment loss of $8,552 associated with the acquired trade names, customer relationship and completed technology of Agree, Tansun, Harmonation, Vlife and Huawei due to management's estimation that the expected future cash flows associated with these assets were insufficient to recover their carrying values. |

----

| 9.     | GOODWILL                                                                                                                          |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                              |
|   | The changes in the carrying amount of goodwill by reporting units for the years ended December 31, 2010 and 2011 were as follows: |

|                                  |   | 2010        |   |   | 2011        |   |
|---------------------------------------|--------|-------------|--------|--------|-------------|--------|
|                                  |   | Enterprise  |   |   | Financial   |   |   |   |   |   | Enterprise |   |   | Financial |   |   |   |   |
|                                  |   | Application |   |   | Industry    |   |   | Total |   |   | Application |   |   | Industry |   |   | Total |   |
|                                  |   | Services    |   |   | IT Services |   |   |   |   |   | Services |   |   | IT Services |   |   |   |   |
|                                  |   |        |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross amount:                         |   |        |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                     |   |        | 14,602 |   |        |   | 25,281 |   |   |   | 39,883 |   |   |   | 15,061 |   |   |   | 26,168 |   |   |   | 41,229 |   |
| Goodwill arising from acquisitions    |   |        | -      |   |        |   | - |   |   |   | - |   |   |   | 6,513 |   |   |   | - |   |   |   | 6,513 |   |
| Exchange differences                  |   |        | 459    |   |        |   | 887 |   |   |   | 1,346 |   |   |   | 1,000 |   |   |   | 942 |   |   |   | 1,942 |   |
| Ending balance                        |   |        | 15,061 |   |        |   | 26,168 |   |   |   | 41,229 |   |   |   | 22,574 |   |   |   | 27,110 |   |   |   | 49,684 |   |
| Accumulated goodwill impairment loss: |   |        |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                     |   |        | -      |   |        |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Addition Impairment                   |   |        | -      |   |        |   | - |   |   |   | - |   |   |   | - |   |   |   | (21,457 | ) |   |   | (21,457 | ) |
| Exchange differences                  |   |        | -      |   |        |   | - |   |   |   | - |   |   |   | - |   |   |   | (229 | ) |   |   | (229 | ) |
| Ending balance                        |   |        | -      |   |        |   | - |   |   |   | - |   |   |   | - |   |   |   | (21,686 | ) |   |   | (21,686 | ) |
| Goodwill, net                         |   |        | 15,061 |   |        |   | 26,168 |   |   |   | 41,229 |   |   |   | 22,574 |   |   |   | 5,424 |   |   |   | 27,998 |   |

|   | The Group tested its goodwill for impairment at the following reporting units' level.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Enterprise application services - This reporting unit provides similar IT services to its customers located in China.  It includes all subsidiaries of the Group except for Bayshore, Yinfeng, Hwawei, VLife, Harmonation, Agree and Tansun.  The goodwill arising from the acquisitions of the entities under this reporting unit is fully allocated to this reporting unit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Financial industry IT services - This reporting unit provides similar system development and maintenance services to its customers within the financial industry located in China.  It includes Bayshore, Yinfeng, Agree, Tansun, Harmonation, Taiwan Camelot, Hwawei, Vlife.  The goodwill arising from the acquisitions of the entities under this reporting unit is fully allocated to this reporting unit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | The Company had three reporting units:  China enterprise application services, China financial industry IT services ("China FIS"), and Taiwan financial industry IT services ("Taiwan FIS") as of December 31, 2009.  During 2010, upon the signing of the Economic Cooperation Framework Agreement between Mainland China and Taiwan, the Company's China FIS entities and Taiwan FIS entities started exploring opportunities in both areas. In anticipation of the synergy of between China FIS and Taiwan FIS, the Company has combined both businesses for future development of the financial industry IT services. The resources and technologies held by China FIS and Taiwan FIS are utilized to serve customers in both mainland China and Taiwan. Consequently, China FIS and Taiwan FIS are managed as one business and the combined financial information of the financial industry IT services is reviewed by the management for performance evaluation and decision making.  As a result, the Group had two reporting units as of December 31, 2010 and 2011: enterprise application services and financial industry IT services. The goodwill of US$1,837 acquired with the acquisitions of Hwawei, Vlife, and Harmonation, which was allocated to the reporting unit of Taiwan FIS as of December 31, 2009, was included in |

----

|   | the reporting unit of financial industry IT services to retrospectively reflect the change in reporting units.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | Due to the significant decline in its stock price and departures of the Company's previous chief executive officer of Agree and some of his team members, the Company performed impairment tests on the two reporting units as of September 30, 2011. The tests resulted in an impairment loss of $21,457 for Financial industry IT services. And no impairment loss needs to be recognized for Enterprise application services.                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | As of December 31, 2011, the Company performed its annual goodwill impairment tests and concluded that there was no goodwill impairment as of December 31, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | In the goodwill impairment test, the Company used the income approach, which was believed to be more reliable than the market approach in determining the fair value of the Company’s reporting unit. Accordingly, it adopted a discounted cash flow (“DCF”) method under the income approach, which considers a number of factors that include expected future cash flows, growth rates, and discount rates, and requires the Company to make certain assumptions and estimates regarding industry economic factors and future profitability of its business unit. The assumptions are inherently uncertain and subjective.                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | When applying the DCF method for the reporting unit, the Company incorporated the use of projected financial information and a discount rate developed using market participant based assumptions. The cash flow projections were based on five-year financial forecasts developed by management that included revenue projections, capital spending trends, and investments in working capital to support anticipated revenue growth. With the consideration of the risk and nature of the reporting unit’s cash flows and the rates of return market participants would require to invest their capital in the reporting unit, the discount rate selected was 20.0% and 21.0% and terminal value growth rate was 3% and 3% for Enterprise application services and Financial industry IT services, respectively. |

----

| 10.    | BORROWINGS                                |
|--------|-------------------------------------------|
|   |                                      |
|   | The borrowings were repayable as follows: |

|                      |   | As of December 31, |   |
|---------------------------|--------|--------------------|--------|
|                      |   | 2010               |   |   | 2011 |   |
|                      |   |               |   |   |   |   |
| Borrowing within one year |   |               | 11,566 |   |   |   | 8,847 |   |
| Borrowing over one year   |   |               | 403    |   |   |   | 378 |   |
| Total borrowings          |   |               | 11,969 |   |   |   | 9,225 |   |

|   | Borrowing within one year:                                                                                                                                                                                                                                                                                                                                        |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                              |
|   | Huaqiao, Tansun Xiamen and Harmonation obtained short-term loans from banks to meet their temporary working capital needs. As of December 31, 2011, the outstanding short-term loans of Huaqiao, Tansun Xiamen and Harmonation are US$7,420, US$44, US$1,383. The short-term loans bore interest rates ranging from 3.392% to 7.22% per annum payable in arrears. |
|   |                                                                                                                                                                                                                                                                                                                                                              |
|   | At the end of 2010, Bayshore obtained a short-term loan of US$1,439 from Shenzhen Yushang Microfinance Co., Ltd. to meet an immediate need of cash, which bore a fixed interest rate of 1.80% per month. The loan and the related interest were fully repaid in January 2011.                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                              |
|   | Borrowing over one year:                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                              |
|   | Xiamen Rella obtains a ten-year loan of US$ 407 from Agricultural Bank of China in 2009.  The bank loans bore fixed interest rate 6.53% per annum payable in arrears.  The loan was secured by a property owned by Xiamen Rella. The pledged property as of December 31, 2011 had a net book value of US$980.                                 |
|   |                                                                                                                                                                                                                                                                                                                                                              |
|   | Interest expense and the weighted average effective interest rate for 2009, 2010 and 2011 were US$96 and 4.86%, US$475 and 6.09%, and US$935 and 5.72% respectively.                                                                                                                                                                                              |

----

| 11. | ACCRUED EXPENSES AND OTHER PAYABLES |
|-----|-------------------------------------|

|                                      |   | As of December 31, |   |
|-------------------------------------------|--------|--------------------|--------|
|                                      |   | 2010               |   |   | 2011 |   |
|                                      |   |               |   |   |   |   |
| Accrued employee payroll and welfare      |   |               | 8,395  |   |   |   | 11,542 |   |
| Business taxes payable                    |   |               | 4,363  |   |   |   | 4,639 |   |
| Other taxes payable                       |   |               | 1,713  |   |   |   | 1,230 |   |
| Reimbursable employee travelling expenses |   |               | 1,480  |   |   |   | 1,255 |   |
| Professional service fees                 |   |               | 1,956  |   |   |   | 2,207 |   |
| Other liabilities                         |   |               | 1,181  |   |   |   | 2,399 |   |
|                                      |   |               | 19,088 |   |   |   | 23,272 |   |

|   | Other taxes payable includes unpaid VAT and withholding individual income tax.       |
|--------|--------------------------------------------------------------------------------------|
|   |                                                                                 |
|   |                                                                                 |
| 12.    | INCOME TAXES                                                                         |
|   |                                                                                 |
|   | The current and deferred components of income tax expense (benefit) were as follows: |

|                        |   | Years ended December 31, |   |
|-----------------------------|--------|--------------------------|--------|
|                        |   | 2009                     |   |   | 2010 |   |   | 2011 |   |
| Current                     |   |                     |   |   |   |   |   |   |   |
| PRC                         |   |                     | 1,780  |   |   |   | 5,224 |   |   |   | 2,269 |   |
| Others                      |   |                     | 1,199  |   |   |   | 200 |   |   |   | - |   |
| Total current income taxes  |   |                     | 2,979  |   |   |   | 5,424 |   |   |   | 2,269 |   |
| Deferred                    |   |                     |   |   |   |   |   |   |   |   |   |   |
| PRC                         |   |                     | (558   | ) |   |   | (1,276 | ) |   |   | (3,031 | ) |
| Others                      |   |                     | (180   | ) |   |   | (48 | ) |   |   | (1,029 | ) |
| Total deferred income taxes |   |                     | (738   | ) |   |   | (1,324 | ) |   |   | (4,060 | ) |
| Total income taxes          |   |                     | 2,241  |   |   |   | 4,100 |   |   |   | (1,791 | ) |

----

| 12.    | INCOME TAXES - continued                                                                                                                                                                                                                                                                                                            |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                |
|   | British Virgin Islands                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                |
|   | The Company and its subsidiaries that were incorporated in the BVI are not subject to taxation in their country of incorporation.  The Group has certain business activities conducted in the PRC which is only subject to PRC income taxes.  Subsidiaries incorporated in the BVI include Triumph and Konwell. |
|   |                                                                                                                                                                                                                                                                                                                                |
|   | Hong Kong                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                |
|   | King’s was established in Hong Kong and is subject to Hong Kong profit tax at 16.5%.                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                |
|   | Japan                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                |
|   | Entoh was established in Japan and is subject to Japanese income taxes at 43%.                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                |
|   | Taiwan                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                |
|   | Taiwan Camelot, Hwawei, VLife and Harmonation were subject to Taiwan income taxes at 25%, 17% and 17% for 2009, 2010 and 2011.                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                |
|   | PRC                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                |
|   | The Group’s PRC entities are subject to an enterprise income tax rate at 25% tax rate pursuant to the PRC Enterprise Income Tax (EIT), other than the preferential tax treatment enjoyed by certain entities described below.                                                                                                 |

|   | Subsidiaries     |   | 0%        |   | 10%    |   | 12.5%     |   | 15%         |   | 20%    |   | 22%    |   | 24%    |
|--------|------------------|--------|-----------|--------|--------|--------|-----------|--------|-------------|--------|--------|--------|--------|--------|--------|
|   |             |   |      |   |   |   |      |   |        |   |   |   |   |   |   |
|   | Camelot Beijing  |   | -         |   | -      |   | -         |   | 2009 - 2013 |   | -      |   | -      |   | -      |
|   | Red River Valley |   | -         |   | -      |   | -         |   | 2009 - 2013 |   | -      |   | -      |   | -      |
|   | Yinfeng          |   | -         |   | -      |   | -         |   | 2009 - 2013 |   | -      |   | -      |   | -      |
|   | Agree Zhuhai     |   | -         |   | -      |   | -         |   | 2009 - 2013 |   | -      |   | -      |   | -      |
|   | Tansun Beijing   |   | -         |   | -      |   | -         |   | 2009 - 2011 |   | -      |   | -      |   | -      |
|   | Faceita          |   | -         |   | -      |   | -         |   | 2009 - 2011 |   | -      |   | -      |   | -      |
|   | Bayshore         |   | -         |   | -      |   | -         |   | 2009 - 2011 |   | -      |   | -      |   | -      |
|   | Dimension        |   | -         |   | -      |   | -         |   | 2011-2013   |   | -      |   | -      |   | -      |
|   | Jiaxing Camelot  |   | 2009      |   | -      |   | 2010-2012 |   | -           |   | -      |   | -      |   | -      |
|   | Shanghai Camelot |   | -         |   | 2009   |   | -         |   | -           |   | -      |   | 2010   |   | 2011   |
|   | Asialink         |   | -         |   | -      |   | -         |   | -           |   | 2009   |   | 2010   |   | 2011   |
|   | Dalian Yuandong  |   | -         |   | 2009   |   | 2010-2011 |   | -           |   | -      |   | -      |   | -      |
|   | Agree Shanghai   |   | 2010-2011 |   | -      |   | 2012-2014 |   | -           |   | -      |   | -      |   | -      |
|   | Huaqiao          |   | 2010-2011 |   | -      |   | 2012-2014 |   | -           |   | -      |   | -      |   | -      |
|   | Kunshan          |   | 2011-2012 |   | -      |   | 2013-2015 |   | -           |   | -      |   | -      |   | -      |
|   | Beijing Heng En  |   |      |   | 2011   |   |      |   |        |   |   |   |   |   |   |

|   | An enterprise which qualifies as a high and new technology enterprise ("HNTE") is entitled to a tax rate of 15%. In 2008 Camelot Beijing, Red River Valley, Yinfeng, and Agree Zhuhai obtained the new HNTE status, which was renewed by these companies in 2011.  Therefore, they were entitled to the preferential income tax rate of 15% till 2013.  Bayshore, Faceita and Tansun Beijing obtained the HNTE status in |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 12.    | INCOME TAXES - continued                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | 2009. Dimension obtained the HNTE status in 2011. The Group believes it is highly likely that its qualifying entities will continue to obtain the renewal in the future.                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | Jiaxing Camelot qualified as a "manufacturing foreign-invested enterprise" and therefore was entitled to a two-year EIT exemption from the earlier of its first tax-profitable year 2008 and followed by a 50% reduction in tax rate for the succeeding three years.  Accordingly, Jiaxing Camelot was entitled to EIT exemption for 2008 and 2009 and a preferential tax rate of 12.5% for 2010 to 2012. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | Shanghai Camelot and Asialink were entitled to preferential tax rates based on their qualifications as "Software Enterprise of Pu Dong District of Shanghai" and subjected to a 24% tax rate in 2011 and Dalian Yuandong was subjected to a 12.5% tax rate in 2011.                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | Agree Shanghai and Huaqiao qualified as "Software Enterprise" in 2010 and were entitled to a two-year EIT exemption for 2010 and 2011, followed by a 50% reduction in tax rate for the succeeding three years.                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | Kunshan qualified as "Software Enterprise" in 2011 and was entitled to a two-year EIT exemption for 2011 and 2012, followed by a 50% reduction in tax rate for the succeeding three years.  Beijing Heng En was subject to 10% tax rate in 2011 verified by local tax authority.                                                                                                                          |

----

| 12.    | INCOME TAXES - continued                                           |
|--------|--------------------------------------------------------------------|
|   |                                                               |
|   | PRC - continued                                                    |
|   |                                                               |
|   | The principal components of deferred income taxes were as follows: |

|                                                    |   | December 31, |   |
|---------------------------------------------------------|--------|--------------|--------|
|                                                    |   | 2010         |   |   | 2011 |   |
|                                                    |   |         |   |   |   |   |
| Current deferred tax assets:                            |   |         |   |   |   |   |
| Provision for doubtful accounts                         |   |         | 81     |   |   |   | 560 |   |
| Accrued payroll                                         |   |         | 1,007  |   |   |   | 1,370 |   |
| Current deferred tax assets, net                        |   |         | 1,088  |   |   |   | 1930 |   |
| Non-current deferred tax assets:                        |   |         |   |   |   |   |   |   |
| Net operating losses                                    |   |         | 511    |   |   |   | 2,758 |   |
| Research and development cost deferred for tax purposes |   |         | 421    |   |   |   | 509 |   |
| Less: Valuation allowance                               |   |         | (861   | ) |   |   | (2,070 | ) |
| Deferred tax assets, net                                |   |         | 1,159  |   |   |   | 3,127 |   |
| Non-current deferred tax liabilities:                   |   |         |   |   |   |   |   |   |
| Intangible assets acquired in business acquisitions     |   |         | 4,303  |   |   |   | 2,871 |   |
| Non-current deferred tax liability, net                 |   |         | 4,303  |   |   |   | 2,871 |   |

|   |                                                                                                                                                                                                                                                                                                                        |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The net operating loss carry forwards generated by a particular entity in the Group cannot be transferred or utilized by other entities within the Group. The net operating loss carry forwards for the PRC subsidiaries was US$7,246 as of December 31, 2011 and will expire on various dates through 2016.                |
|   |                                                                                                                                                                                                                                                                                                                        |
|   | Valuation allowances have been established because the Group believes that it is more likely than not that its deferred tax assets will not be realized as it is not expected to generate sufficient taxable income in future. As of December 31, 2010 and 2011, valuation allowance was US$861 and US$2,070, respectively. |

----

| 12.    | INCOME TAXES - continued                                                                                             |
|--------|----------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                 |
|   | PRC - continued                                                                                                      |
|   |                                                                                                                 |
|   | Reconciliation between the statutory PRC enterprise income tax rate of 25% and the effective tax rate is as follows: |

|                                               |   | Years ended December 31, |   |
|----------------------------------------------------|--------|--------------------------|--------|
|                                               |   | 2009                     |   |   | 2010 |   |   | 2011 |   |
|                                               |   |                     |   |   |   |   |   |   |   |
| Statutory income tax under PRC                     |   |                     | 3,878  |   |   |   | 5,789 |   |   |   | (10,704 | ) |
| Effect of income not taxable for tax purposes      |   |                     | (15    | ) |   |   | (160 | ) |   |   | (43 | ) |
| Effect of expenses not deductible for tax purposes |   |                     | 382    |   |   |   | 1,618 |   |   |   | 1,399 |   |
| Different tax jurisdictions                        |   |                     | 489    |   |   |   | 569 |   |   |   | 11,693 |   |
| Effect of income tax holiday and relief            |   |                     | (3,043 | ) |   |   | (3,713 | ) |   |   | (5,842 | ) |
| Effect of deemed income for tax purpose            |   |                     | 92     |   |   |   | 228 |   |   |   | 497 |   |
| Changes in valuation allowance                     |   |                     | 458    |   |   |   | (231 | ) |   |   | 1,209 |   |
| Effective tax amount                               |   |                     | 2,241  |   |   |   | 4,100 |   |   |   | (1,791 | ) |

|   | If the tax holidays granted to Camelot Beijing, Red River Valley, Yinfeng, Jiaxing Camelot, Shanghai Camelot, Asialink, Beijing Heng En, Bayshore, Faceita, Dalian Yuandong, Agree Zhuhai, Agree Shanghai, Kunshan, Dimension, Huaqiao and Tansun Beijing were not available, provisions for income taxes and net income per share would be as follows: |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                    |   | Years ended December 31, |   |
|-----------------------------------------|--------|--------------------------|--------|
|                                    |   | 2009                     |   |   | 2010 |   |   | 2011 |   |
|                                    |   |                     |   |   |   |   |   |   |   |
| Provisions for income taxes             |   |                     | 5,289  |   |   |   | 7,813 |   |   |   | 4,051 |   |
|                                    |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net income per ordinary share - basic   |   |                     | 0.08   |   |   |   | 0.10 |   |   |   | (0.25 | ) |
| Net income per ordinary share - diluted |   |                     | 0.08   |   |   |   | 0.09 |   |   |   | (0.25 | ) |

----

| 12.    | INCOME TAXES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | PRC - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | The Group did not identify significant unrecognized tax benefits for years ended December 31, 2009, 2010 and 2011.  The Group did not incur any interest and penalties related to potential underpaid income tax expenses and does not anticipate any significant charge in the unrecognized tax benefits within 12 months from December 31, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Uncertainties exist with respect to how the current income tax law in the PRC applies to the Group’s overall operations, and more specifically, with regard to tax residency status. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the New EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting and properties occurs within the PRC. On April 22, 2009, the State Administration of Taxation (the ‘‘SAT’’) issued the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies, or Circular 82, which provides certain specific criteria for determining whether the ‘‘de facto management body’’ of a Chinese-controlled offshore-incorporated enterprise is located in China. In addition, on August 3, 2011, the SAT issued a bulletin to make clarification in the areas of resident status determination, post-determination administration, as well as competent tax authorities. The Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. However, if the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income taxes, at a rate of 25%. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of income taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of income tax liability exceeding US$15 (RMB100,000) is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The relevant tax authorities of the Group’s subsidiaries have not conducted a tax examination on the PRC entities. In accordance with relevant PRC tax administration laws, tax years from 2007 to 2011 of the Group’s PRC subsidiaries remain subject to tax audits as of December 31, 2011, at the tax authority’s discretion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | Aggregate undistributed earnings of the Company's subsidiaries located in the PRC that are available for distribution to the Company of approximately US$70,742 at December 31, 2011 are considered to be indefinitely reinvested and accordingly, no provision has been made for the PRC dividend withholding taxes that would be payable upon the distribution of those amounts to the Company.  The Chinese tax authorities have also clarified that distributions made out of pre January 1, 2008 retained earnings will not be subject to the withholding tax.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

----

| 13. | NET INCOME PER SHARE |
|-----|----------------------|

|                                                                                                                               |   | Years ended December 31, |        |
|------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-------------|
|                                                                                                                               |   | 2009                     |        |   | 2010 |   |   | 2011 |   |
|                                                                                                                               |   |                     |        |   |   |   |   |   |   |
| Net income (loss) attributable to Camelot Information Systems Inc.                                                                 |   |                     | 12,966      |   |   |   | 18,597 |   |   |   | (40,824 | ) |
| Numerator used in basic and diluted net income per share:                                                                          |   |                     |        |   |   |   |   |   |   |   |   |   |
| Net income attributable to Camelot Information Systems Inc. allocated to Series A convertible preferred share (i)                  |   |                     | 4,390       |   |   |   | 2,920 |   |   |   | - |   |
| Net income attributable to Camelot Information Systems Inc. allocated to Series B convertible preferred share (i)                  |   |                     | 401         |   |   |   | 266 |   |   |   | - |   |
| Net income (loss) attributable to Camelot Information Systems Inc. allocated for computing net income per ordinary share-basic (i) |   |                     | 8,175       |   |   |   | 15,411 |   |   |   | (40,824 | ) |
| Net income (loss) attributable to Camelot Information Systems Inc. allocated for computing net income per ordinary share-diluted   |   |                     | 12,966      |   |   |   | 18,597 |   |   |   | (40,824 | ) |
| Shares (denominator) (ii):                                                                                                         |   |                     |        |   |   |   |   |   |   |   |   |   |
| Weighted average ordinary shares outstanding used in computing net income per ordinary share-basic (iii)                           |   |                     | 82,035,859  |   |   |   | 128,663,415 |   |   |   | 179,954,056 |   |
| Employee share options (treasury effect)                                                                                           |   |                     | 2,906,963   |   |   |   | 9,989,086 |   |   |   | - |   |
| Weighted average ordinary shares outstanding used in computing net income per ordinary share-diluted(iv)                           |   |                     | 133,017,168 |   |   |   | 165,258,030 |   |   |   | 179,954,056 |   |
| Net income (loss) attributable to Camelot Information Systems Inc. per ordinary share-basic                                        |   |                     | 0.10        |   |   |   | 0.12 |   |   |   | (0.23 | ) |
| Net income (loss) attributable to Camelot Information Systems Inc. per ordinary share-diluted                                      |   |                     | 0.10        |   |   |   | 0.11 |   |   |   | (0.23 | ) |

|   | (i)    | The net income attributable to holders of ordinary shares was allocated between ordinary shares and preferred shares on pro rata basis based on the dividend participation right.  Since each Series A convertible preferred shares and Series B convertible preferred shares has the same participating right as each ordinary share, the allocation was based on the number of ordinary shares, Series A convertible preferred shares and Series B convertible preferred shares issued.                                                                                                 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (ii)   | The net income per share information for all periods presented has reflected the 4-for-1 stock split effected in May 2010 (See Note 16 "Ordinary shares").                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (iii)  | The calculation of the weighted average number of ordinary shares for the purpose of basic net income per share for 2009 included the effect of the 1,800,000 ordinary shares issuable in connection with the extinguishment of liability with Red River Valley, the 3,932,000 ordinary shares issuable in connection with the business acquisition of Tansun, and the 2,200,000 ordinary shares issuable in connection with the settlement of the performance-based contingent consideration for business acquisition of Yinfeng. These ordinary shares were all issued in May 2010 (see Note 16). |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   | (iv)   | As of December 31, 2009, 2010 and 2011, the Group has 12,354,400, 2,690,000 and 16,059,328 employee share options outstanding that can potentially dilute net income per share in the future but were excluded in computation of diluted net income per share in 2009, 2010 and 2011 as their effect would be anti-dilutive.                                                                                                                                                                                                                                                                        |

----

| 14. | CONSIDERATION PAYABLE IN CONNECTION WITH BUSINESS ACQUISITIONS AND DEBT EXTINGUISHEMENT |
|-----|-----------------------------------------------------------------------------------------|

|                   |   | Opening @2009/12/31 |   |   | Move from contingent consideration payable |   |   | Payment |   |   | Ex. Diff. |   |   | Bal. @2010/12/31 |   |   | Addition from Acquisition |   |   | Move from contingent consideration payable |   |   | Payment |   |   | Ex. Diff. |   |   | Bal @2011/12/31 |   |
|------------------------|--------|---------------------|--------|--------|--------------------------------------------|--------|--------|---------|--------|--------|-----------|--------|--------|------------------|--------|--------|---------------------------|--------|--------|--------------------------------------------|--------|--------|---------|--------|--------|-----------|--------|--------|-----------------|--------|
| Yinfeng                |   |                | 4,249  |   |                                       |   |   |    |   | (4,252 | )         |   |   | 3                |   |   |                      | -      |   |                                       |   |   |    |   |   |      |   |   |            |   |   |   |   | - |   |
|  Red River Valley |   |                | 1,200  |   |                                       |   |   |    |   |   |      |   |   |             |   |   |                      | 1,200  |   |                                       |   |   |    |   |   |      |   | (1,200 | )               |   |   |   |   |   | - |   |
| Agree                  |   |                |   |   |                                       |   | 11,364 |    |   |   |      |   |   |             |   |   |                      |   | 11,364 |                                       |   |   |    |   |   |      |   |   | (11,415         | )      |   |   | 51 |   |   |   | - |   |
| Tansun                 |   |                | 8,790  |   |                                       |   | 3,030  |    |   |   | (8,844    | )      |   |             | 54     |   |                      |   | 3,030  |                                       |   |   |    |   |   | 3,162     |   |   |            | (4,245 | ) |   |   | 40 |   |   |   | 1,987 |   |
| Dimension              |   |                |   |   |                                       |   |   |    |   |   |      |   |   |             |   |   |                      |   |   |                                       |   |   | 4,000   |   |   |      | 3,147  |   |            |   | (4,034 | ) |   |   | 32 |   |   |   | 3,145 |   |
| Total                  |   |                | 14,239 |   |                                       |   | 14,394 |    |   |   | (13,096   | )      |   |             | 57     |   |                      |   | 15,594 |                                       |   |   | 4,000   |   |   |      | 6,309  |   |            |   | (20,894 | ) |   |   | 123 |   |   |   | 5,132 |   |

| 15.    | FAIR VALUE MEASUREMENTS                                                                                                                                                                                                                                 |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                    |
|   | Measured on recurring basis The Group’s financial assets and liabilities measured at fair value on a recurring basis consist of the contingent considerations in connection with business acquisitions, as presented in the following table. |

|                                                       |   | Liabilities at carrying values |   |   | Total fair value |   |   | Active market for identical liabilities(Level 1) |   |   | Other observable inputs(Level 2) |   |   | Significant unobservable inputs(Level 3) |   |
|------------------------------------------------------------|--------|--------------------------------|--------|--------|------------------|--------|--------|--------------------------------------------------|--------|--------|----------------------------------|--------|--------|------------------------------------------|--------|
|                                                       |   |                           |   |   |             |   |   |                                             |   |   |                             |   |   |                                     |   |
| As of December 31, 2011                                    |   |                           |   |   |             |   |   |                                             |   |   |                             |   |   |                                     |   |
| Liabilities - Contingent acquisition consideration payable |   |                           | $2,822 |   |             |   | $2,822 |                                             |   |   | $-                               |   |   |                                     | $-     |   |   |   | $2,822 |   |

|   | The following table summarized the movement of the balances of the Group’s financial liabilities measured at fair value with level 3 inputs on a recurring basis: |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                      |   | Balance at December 31,2009 |   |   | Change in fair value |   |   | Move to consideration payable |   |   | Balance at December 31,2010 |   |   | Addition due to acquisition |   |   | Change in fair value |   |   | Move to consideration payable |   |   | Balance at December 312011 |   |
|---------------------------|--------|-----------------------------|--------|--------|----------------------|--------|--------|-------------------------------|--------|--------|-----------------------------|--------|--------|-----------------------------|--------|--------|----------------------|--------|--------|-------------------------------|--------|--------|----------------------------|--------|
|                      |   |                        |   |   |                 |   |   |                          |   |   |                        |   |   |                        |   |   |                 |   |   |                          |   |   |                       |   |
| Contingent consideration: |   |                        |   |   |                 |   |   |                          |   |   |                        |   |   |                        |   |   |                 |   |   |                          |   |   |                       |   |
| Agree                     |   |                        | 8,852  |   |                 |   | 2,512  |                          |   |   | (11,364                     | )      |   |                        | -      |   |                 |   | -      |                          |   |   | -                          |   |   |   | - |   |   |   | - |   |
| Tansun                    |   |                        | 3,969  |   |                 |   | 1,368  |                          |   |   | (3,030                      | )      |   |                        | 2,307  |   |                 |   | -      |                          |   |   | 855                        |   |   |   | (3,162 | ) |   |   | - |   |
| Dimension                 |   |                        | -      |   |                 |   | -      |                          |   |   | -                           |   |   |                        | -      |   |                 |   | 5,155  |                          |   |   | 814                        |   |   |   | (3,147 | ) |   |   | 2,822 |   |
| Total                     |   |                        | 12,821 |   |                 |   | 3,880  |                          |   |   | (14,394                     | )      |   |                        | 2,307  |   |                 |   | 5,155  |                          |   |   | 1,669                      |   |   |   | (6,309 | ) |   |   | 2,822 |   |

|   | As of December 31, 2011, the contingent consideration amounts determined based on the earnings for 2011 have been presented as consideration payable in connection with business acquisitions in the consolidated balance sheet as of December 31, 2011.Measured at fair value on a non-recurring basisThe Group measured fair value of assets and liabilities acquired in business acquisitions using various valuation methods, primarily consisting of the "cost," "income approach-excess earnings" and "with & without" valuation methods.  These purchased assets and liabilities are considered Level 3 assets and liabilities because the Company used unobservable inputs, reflecting the Company's assessment of the assumptions that market participants would use in valuing these assets and liabilities (Note 3).The Group measured the intangible assets at fair value on a nonrecurring basis when the carrying amount of an asset may no longer be recoverable as results of the impairment assessment (Note 8). The fair value was determined using models with significant unobservable inputs (Level 3 inputs), primarily the management projection on the discounted future cash flow and the discount rate.The Group measured the goodwill at fair value on a nonrecurring basis when it is annually evaluated or whenever events or changes in circumstances indicate that carrying amount of a reporting unit exceeds its fair value as a result of the impairment assessments(Note 9). The fair value was determined using models with significant unobservable inputs (Level 3 inputs), primarily the management projection on the discounted future cash flow and the discount rate. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 16.    | ORDINARY SHARES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |  In September 2009, the Company issued 250,000 ordinary shares with fair value of US$4.88 per share and 1,216,545 ordinary shares with fair value of US$ 5.00 per share as part of the consideration for the acquisitions of Yinfeng and Agree, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The May 2010 shareholders meeting approved a 4-for-1 stock split for all ordinary shares, Series A and Series B convertible preferred shares.  While the stock split increased the number of shares for each stockholder, the percentage of their ownership in the Company was not affected. The Series A Shares and Series B Shares remain convertible into ordinary shares at a 1:1 ratio. This share split has been retrospectively reflected for all periods presented. After the stock split, the Company issued a total of 7,932,000 ordinary shares which consisted of 1,800,000 ordinary shares in connection with the debt extinguishment with Red River Valley, 3,932,000 ordinary shares with fair value of US$ 1.47 per share in connection with the acquisition of Tansun, and 2,200,000 ordinary shares with fair value of US$ 1.47 per share as a settlement contingent consideration of US$3,200 in connection with the acquisition of Yinfeng. These shares were reflected as shares to be issued in equity on the consolidated balance sheet as of December 31, 2009. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

| 16.    | ORDINARY SHARES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | On July 21, 2010, the Company completed the initial public offering (“IPO”) on the New York Stock Exchange and issued 9,166,667 American Depositary Shares ("ADS") representing 36,666,668 ordinary shares. At the same time, 44,055,018 of Series A Convertible Preferred Shares and 4,019,328 of Series B Convertible Preferred Shares were automatically converted into 48,074,346 ordinary shares.                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | On December 10, 2010, the Company completed a follow-on public offering and issued 1,074,030 ADSs, representing 4,296,120 ordinary shares as part of the offering.                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | On August 2011, the Company issued 1,152,352 ordinary shares as part of the consideration for the acquisition of Dimension.                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | As of December 31, 2011, the Company had 451,925,654 ordinary shares authorized, and 182,762,475 and 177,621,367 ordinary shares issued and outstanding, respectively.                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | On May 26, 2011, the Company’s board of directors approved a share repurchase program effective May 26, 2011. Under the approved program, the Company is authorized to repurchase up to US$20 million worth of its issued and outstanding ADSs f from time to time, depending on market conditions and other factors. During the years ended December 31, 2011, the Company repurchased 8,473,600 ordinary shares for total considerations of US$14,415. The repurchased shares were recorded as a reduction of additional paid in capital. |

----

| 17.    | EMPLOYEE BENEFIT PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Full time employees of the Group located in the PRC (mainland) and Taiwan participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees.  The Group accrues for these benefits based on certain percentages of the employees' salaries.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | The total provision for such employee benefits were US$4,122, US$6,462 and US$10,643 for the years ended December 31, 2009, 2010 and 2011, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 18.    | STATUTORY RESERVE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, the Company's subsidiaries located in the PRC (mainland), being foreign invested enterprises established in the PRC (mainland), are required to provide for certain statutory reserves, namely general reserve, enterprise expansion reserve, and staff welfare and bonus reserve, all of which are appropriated from net profit as reported in their PRC statutory accounts.  The Company's subsidiaries are required to allocate at least 10% of their after-tax profits to the general reserve until such reserve has reached 50% of their respective registered capital.  In accordance with the Company Act of Taiwan, the Company's subsidiaries located in Taiwan are required to provide for statutory reserve which is 10% of their after-tax profit until such reserve has reached their registered capital. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | Appropriations to the enterprise expansion reserve and the staff welfare and bonus reserve are to be made at the discretion of the board of directors of each of the Company's subsidiaries.  The appropriations to these reserves by the Group's PRC (mainland) and Taiwan subsidiaries were US$1,439, US$3,838 and US$2,286 for the years ended December 31, 2009, 2010 and 2011, respectively.  As of December 31, 2011, the aggregate amounts of capital and reserves restricted which represented the amount of net assets of the relevant subsidiaries in the Group not available for distribution was US$59,789.                                                                                                                                                                                                                                                                                                                      |

----

| 19.    | SHARE-BASED COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 2006 Equity Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | On June 26, 2006, the Group adopted the 2006 Equity Incentive Plan, which was amended and restated in May 2010 (collectively, the "2006 Plan").  The 2006 Plan allows the Group to grant options to its employees and directors to purchase up to 10,872,000 ordinary shares subject to vesting requirement.  In March 2008, November 2008, and May 2010, the Company increased the total number of ordinary shares available for issuance under the 2006 Plan by 3,200,000, 5,426,012, and 4,000,000 shares, respectively, resulting in a total of 23,498,012 options available for grant under the 2006 Plan.  The share option information for all periods presented has reflected the 4-for-1 stock split in May 2010 pursuant to the anti-dilution provisions under the 2006 Plan. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | On July 1, 2009, the Company granted 3,162,200 options with an exercise price of US$1.50 per share, of which 20% vest on the first anniversary of the grant date, 5% vest each quarter over the second year, and 7.5% vest each quarter over the next two years thereafter.  The contractual life is 8 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | On November 2, 2009, the Company granted 1,800,000 options with an exercise price of US$1.29 per share, of which 33.33% vest on the first anniversary of the grant date, and 8.33% vest each quarter over the next two years thereafter.  The contractual life is 8 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | On November 2, 2009, the Company granted 80,000 employee options with an exercise price of US$1.29 per share, of which 20% vest on the first anniversary of the grant date, 5% vest each quarter over the second year, and 7.5% vest each quarter over the next two years thereafter.  The contractual life is 8 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | On February 28, 2010, the Company granted 140,000 employee options with an exercise price of US$1.47 per share, of which 25% vest on the first anniversary of the grant date, 6.25% vest each quarter over the next three years thereafter. The contractual life is 8 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

| 19.    | SHARE-BASED COMPENSATION - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | 2006 Equity Incentive Plan - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | On May 18, 2010, the Company granted 600,000 employee options with an exercise price of US$1.29 per share, of which 50% vested on July 6, 2010 upon pricing on the date of the prospectus of an initial public offering and the remaining 50% vested on November 2, 2010. The contractual life is 8 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | On August 16, 2010, the Company granted 2,400,000 options with an exercise price of US$2.66 per share for 2,360,000 options and US$1.47 per share for 4,000 options respectively. 2,300,000 options vested on the filing date of the Company's 2010 annual report on Form 20-F as the net revenues for the year ended December 31, 2010 met US$176.4M. The contractual life is 1 years from the date of grant. In addition, 60,000 options vest over four years where 25% vest on the first anniversary of the grant date, and 6.25% vest each quarter over the next three years thereafter. The contractual life is 8 years from the date of grant. The remaining 40,000 options vest over four years, where 20% vest on the first anniversary of the grant date, 5% vest each quarter over the second year, and 7.5% vest each quarter over the next two years thereafter. The contractual life is 8 years from the date of grant. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | On December 17, 2010, the Company granted 150,000 employee options with an exercise price of US$2.50 per share, of which 33.33% vest on the first anniversary of the grant date, and 8.33% vest each quarter over the next two years thereafter.  The contractual life is 8 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | On April 7, 2011, the Company granted to employees 240,000 options, which vested immediately on the grant date. The contract life of the nonvested shares is 8 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | On April 15, 2011, the Company granted options on 320,000 shares with an exercise price of US$1.25 per share to employees. 50% of the options vest on the first and second anniversary of the grant date respectively. The contract life is 8 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | On April 15, 2011, the Company granted options on 1,052,000 shares with an exercise price of US$3.75 per share to employees. The vesting of the options will be on the filing date of the company's 2011 annual report on Form 20-F, and contingent upon the achievement of certain profit targets for the year ended December 31, 2011 which is considered probable.  The exercise price will be adjusted if the actual profits for 2011 exceed the profit targets. The contract life is 8 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                       |

----

| 19.    | SHARE-BASED COMPENSATION - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | 2006 Equity Incentive Plan - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | On September 1, 2011 (the “repricing date”), the Company's board of directors and compensation committee approved to amend the terms of certain stock options granted to employees to reduce the exercise price of all outstanding share options to US$0.0025 or US$0.245 per share based on the closing price of the Company's ADSs on NYSE on September 1, 2011. The amendments did not change the vesting provisions or the number of shares subject to any of the option awards. This was accounted for as a share option modification and required the remeasurement of the fair value of these share options. This remeasurement resulted in a total incremental share-based compensation of US$15,092, of which US$13,221was recognized in the year ended December 31, 2011, and the remaining is recognized ratably over the remaining vesting period of the award. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | On October 1, 2011, the Company granted 800,000 options with an exercise price of US$0.75 per share. The options vested immediately on the grant date. The contractual life is 4 years from the date of grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

----

| 19.    | SHARE-BASED COMPENSATION - continued                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                            |
|   | 2006 Equity Incentive Plan - continued                                                                                          |
|   |                                                                                                                            |
|   | A summary of option activity under the Plan as of December 31, 2011, and changes during the year then ended is presented below: |

|                             |   |   |        |   | Weighted       |   | Weighted-average |   | Aggregate |   |
|----------------------------------|--------|--------|-------------|--------|----------------|--------|------------------|--------|-----------|--------|
|                             |   |   |        |   | average        |   | remaining        |   | intrinsic |   |
| Options                          |   | Shares |        |   | exercise price |   | contractual term |   | value     |   |
|                             |   |   |        |   |           |   |             |   |      |   |
| Outstanding at January1, 2011    |   |   | 19,401,820  |   |           | $      | US1.27           |   |      |   |   |   |
| Granted                          |   |   | 23,185,820  |   |           | $      | US0.34           |   |      |   |   |   |
| Exercised                        |   |   | (5,168,492  | )      |           | $      | US0.26           |   |      |   |   |   |
| Forfeited                        |   |   | (586,000    | )      |           | $      | US0.02           |   |      |   |   |   |
| Cancelled                        |   |   | (20,773,820 | )      |           | $      | US1.40           |   |      |   |   |   |
| Outstanding at December 31, 2011 |   |   | 16,059,328  |   |           | $      | US0.20           |   | 3.4 years |   |   | 8,334 |   |
| Exercisable at December 31, 2011 |   |   | 12,478,792  |   |           | $      | US0.15           |   | 2.8 years |   |   | 7,034 |   |

|   | The weighted average grant date fair values of the options granted during the years ended December 31, 2009, 2010 and 2011 were US$0.54, US$0.88 and US$1.25, respectively.  9,989,568, 12,241,415 and 17,647,285 share options were vested during the years ended December 31, 2009, 2010 and 2011, respectively.  Nil, Nil and 5,168,492 share options were exercised in 2009, 2010 and 2011, respectively. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | The fair value of each option granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions used for grants during the applicable period.                                                                                                                                                                                                                                |

|   |                                              | Years ended December 31, |
|--------|---------------------------------------------------|--------------------------|
|   |                                              | 2009                     | 2010 | 2011 |
|   |                                              |                     |   |   |
|   | Weighted average risk-free interest rate          | 4.04%                    | 1.49% | 1.35% |
|   | Weighted average expected term                    | 5.8 years                | 1.4 years | 2.2 years |
|   | Weighted average volatility                       | 42.7%                    | 41.1% | 45.5% |
|   | Weighted average dividend yield                   | -                        | - | - |
|   | Weighted fair value of underlying ordinary shares | 1.26                     | 2.90 | 1.01 |

----

| 19.    | SHARE-BASED COMPENSATION - continued   |
|--------|----------------------------------------|
|   |                                   |
|   | 2006 Equity Incentive Plan - continued |
|   |                                   |   |
|   | (a)                                    | Risk-free interest rate |
|   |                                   |   |
|   |                                   | Risk-free interest rate was estimated based on the yield to maturity of China international government bonds with a maturity period close to the expected term of the options. |
|   |                                   |   |
|   | (b)                                    | Expected term |
|   |                                   |   |
|   |                                   | As the Company did not have historical share option exercise experience, it estimated the expected term base on a consideration of factors including contractual term, vesting period and empirical study on exercise behavior of employee share option. |
|   |                                   |   |
|   | (c)                                    | Volatility |
|   |                                   |   |
|   |                                   | Volatility of the underlying ordinary shares during the life of the options was estimated based on the historical stock price volatility of listed comparable companies over a period similar to the expected term of the options. |
|   |                                   |   |
|   | (d)                                    | Dividend yield |
|   |                                   |   |
|   |                                   | The dividend yield was estimated by the Company based on its expected dividend policy over the expected term of the employee share options. |
|   |                                   |   |
|   | (e)                                    | Fair value of underlying ordinary shares |
|   |                                   |   |
|   |                                   | Prior to the completion of IPO in July 2010, the estimated fair value of the ordinary shares underlying the options as of the respective grant dates was determined based on a retrospective valuation.  When estimating the fair value of the ordinary shares on the grant dates, management has considered a number of factors, including the valuation result of a third-party appraisal by American Appraisal China Limited and equity transactions of the Company, while taking into account standard valuation methods and the achievement of certain events.  After the completion of IPO, the closing market price of ordinary shares of the Company as of the grant date was used as the fair value of the ordinary shares on that date. |
|   |                                   |   |
|   |                                   | The Group recorded share-based compensation of US$1,243, US$2,924 and US$19,366 during the years ended December 31, 2009, 2010 and 2011, respectively, based on the fair value on the grant dates over the requisite service period of award according to the graded vesting schedule. |
|   |                                   |   |
|   |                                   | As of December 31, 2011, total unrecognized compensation expense relating to unvested share options was US$4,157.  The amount is expected to be recognized over a weighted average period of 1.16 years according to the graded vesting schedule. |

----

| 20. | NONCONTROLLING INTEREST |
|-----|-------------------------|

|                                    |   | Harmonation |   |   | Yantai |   |   | Total  |   |
|-----------------------------------------|--------|-------------|--------|--------|--------|--------|--------|--------|--------|
|                                    |   |        |   |   |   |   |   |   |   |
| Balance as of December 31, 2009         |   |        | 484    |   |   |   | (27    | )      |   |   | 457 |   |
| Foreign currency translation adjustment |   |        | 21     |   |   |   | (1     | )      |   |   | 20 |   |
| Net income                              |   |        | 86     |   |   |   | -      |   |   |   | 86 |   |
| Balance as of December 31, 2010         |   |        | 591    |   |   |   | (28    | )      |   |   | 563 |   |
| Dissolution of Yantai (note i)          |   |        | -      |   |   |   | 32     |   |   |   | 32 |   |
| Foreign currency translation adjustment |   |        | (15    | )      |   |   | (4     | )      |   |   | (19 | ) |
| Net income                              |   |        | (233   | )      |   |   | -      |   |   |   | (233 | ) |
| Balance as of December 31, 2011         |   |        | 343    |   |   |   | -      |   |   |   | 343 |   |

|   | i. | In 2011, to streamline the Corporate Structure, the Company dissolved Yantai Q.B. Eleven Outsourcing Service Company (“Yantai”) since the subsidiary did not have business operations. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 21.    | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                            |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                     |
|   | Operating lease commitments                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                     |
|   | The Group has entered into operating lease agreements principally for its office spaces. Rental expenses under operating leases were US$2,398, US$2,842 and US$2,541 for the years ended December 31, 2009, 2010 and 2011, respectively. |
|   |                                                                                                                                                                                                                                     |
|   | Future minimum lease payments under such non-cancelable leases as of December 31, 2011 are as follows:                                                                                                                                   |

| 2012                |   |   | 1,819 |   |
|---------------------|--------|--------|-------|--------|
| 2013                |   |   | 1,014 |   |
| 2014                |   |   | 896   |   |
| 2015                |   |   | 896   |   |
| 2016 and thereafter |   |   | 3,247 |   |
| Total               |   |   | 7,872 |   |

----

| 21.    | COMMITMENTS AND CONTINGENCIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | Legal contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | The Company initially acquired its Hong Kong operation (“Previous HK Operations”) in 2006 through the Company and Triumph. Under applicable Hong Kong law, the Company and Triumph were deemed to have established a place of business and carrying on business in Hong Kong, and therefore, both were required to obtain business registration certificates from the Business Registration Office of the Hong Kong government and to be registered with the Companies Registry of the Hong Kong government within one month of their acquisition of its Previous HK Operations. The Company did not obtain such certificates or undertake such registration and accordingly, the Company's Previous HK Operations were not fully compliant with registration requirements in Hong Kong. As a result of such non-compliance, the Company could be subject to a fine for each day of non-compliance and a maximum one-time fine. As of December 31, 2011, no losses with respect to this contingency were accrued. There has been no prosecution initiated by the relevant authorities. If such action were to be taken, the penalty that the Company would incur could be in the range from zero to a maximum of US$264 up to November 5, 2010. The Company is unable to reasonably estimate the actual amount that it may have to pay if the authorities were to become aware of the non-compliance and were to commence proceedings. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | In addition, as an employer, The Company’s Previous HK Operations were required to comply with legal obligations with regard to mandatory provident funds and compensation insurance for its employees under the Mandatory Provident Fund Schemes Ordinance (Cap. 485), or MPFSO, and under the Employees’ Compensation Ordinance (Cap. 282), or ECO, of the Hong Kong laws, respectively. The Company's Previous HK Operations were not compliant with certain provisions of the MPFSO for a duration of approximately 10 months between 2006 and 2007 by failing to ensure, in relation to one employee at the time that such employee becomes a member of a registered mandatory provident fund scheme and to make and deduct the respective employer and employee mandatory provident fund contributions in a total amount of HK$20,000 to the employee’s account of such scheme. The Company's Previous Hong Kong Operations were also not compliant with certain provisions of the ECO by failing to take out worker’s compensation insurance in relation to the said one employee.                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   | As a result of the foregoing, the Company may be subject to fines, penalties and/or prosecutions under local laws and regulations. In recent enforcement cases under the MPFSO, defaulting employer(s) have been ordered to repay all unpaid contributions, and a surcharge or a penalty of the higher of HK$5,000 or 5% of the total unpaid amount. The Company's Previous HK Operations have made up these default contributions into the relevant employee's mandatory provident fund scheme account and have been in compliance with its legal obligations under the MPFSO since October 2007. Furthermore, with respect to the failure to take out compensation insurance, any fines, penalties and/or prosecutions may include but not be limited to facing a maximum fine of HK$100,000 (US$13). Up to November 5, 2010, none of the Company's Previous HK Operations' employees have been injured whilst at work and the Company's Previous HK Operations have been in full compliance with the ECO since March 2010. There has been no prosecution initiated by the relevant authorities or employees and the Company believes that if such action were to be taken, the actual penalty that the Company could incur would be insignificant. As of December 31, 2010 and December 31, 2011, no losses with respect to this contingency were accrued.                                                                                      |

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| 21.    | COMMITMENTS AND CONTINGENCIES - continued                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Securities Class Action:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | Several securities class action lawsuits have been filed in the United States District Court for the Southern District of New York on behalf of purchasers of Company's ADS between July 21, 2010 and August 17, 2011 (the "Class Period"), including those who acquired our ADSs pursuant or traceable to the Company's secondary public offering on December 10, 2010 ("Offerings"). The complaint charges the company, certain of officers and directors, and the underwriters involved in our Offerings with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, the Company issued materially false and misleading statement regarding its business practices and financial results. The deadline of making motions for lead plaintiff was March 5, 2012 and as of the date of this report, no lead plaintiff has been appointed. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 22.    | SUBSEQUENT EVENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   | On January 31, 2012, the Company granted 752,000 employee options with an exercise price of US$0.25 per share, of which 20% will vest on the first anniversary of the grant date, and 5% will vest each quarter in the second year, and 7.5% will vest each quarter over the next two years thereafter. The contractual life is 8 years from the date of grant. The fair value of the employee options as of grant date was estimated to be US$0.48 per share based on the market closing price of the Company's ADSs on the grant date. The total estimated compensation cost of US$350, after the adjustment of estimated forfeitures, will be recognized over the vesting period based on the graded vesting schedule.                                                                                                                                                                                                               |

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|                                                                                                                                                                                                                                                                                              |   | Years ended December 31, |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                                                                                                                                                                                                                              |   | 2010                     |    |   | 2011 |   |
| Assets                                                                                                                                                                                                                                                                                            |   |                     |    |   |   |   |
|                                                                                                                                                                                                                                                                                              |   |                     |    |   |   |   |
| Current assets:                                                                                                                                                                                                                                                                                   |   |                     |    |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                                                                                                         |   |                     | 100,703 |   |   |   | 4,849 |   |
| Term deposits                                                                                                                                                                                                                                                                                     |   |                     | -       |   |   |   | 40,854 |   |
| Accounts receivable                                                                                                                                                                                                                                                                               |   |                     | 126     |   |   |   | 152 |   |
| Amounts due from related parties                                                                                                                                                                                                                                                                  |   |                     | 5,875   |   |   |   | 20,747 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                                                                                         |   |                     | 1,183   |   |   |   | 669 |   |
| Total current assets                                                                                                                                                                                                                                                                              |   |                     | 107,887 |   |   |   | 67,271 |   |
| Investment in subsidiaries                                                                                                                                                                                                                                                                        |   |                     | 181,488 |   |   |   | 190,190 |   |
| Other Non-current assets                                                                                                                                                                                                                                                                          |   |                     | 352     |   |   |   | 352 |   |
| Total assets                                                                                                                                                                                                                                                                                      |   |                     | 289,727 |   |   |   | 257,813 |   |
| Liabilities and shareholders'' equity                                                                                                                                                                                                                                                             |   |                     |    |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                              |   |                     |    |   |   |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                                                              |   |                     |    |   |   |   |   |   |
| Amounts due to related parties                                                                                                                                                                                                                                                                    |   |                     | 14,700  |   |   |   | 12,995 |   |
| Accrued expenses and other payables                                                                                                                                                                                                                                                               |   |                     | 3,322   |   |   |   | 4,158 |   |
| Consideration payable in connection with business acquisitions                                                                                                                                                                                                                                    |   |                     | 15,594  |   |   |   | 5,132 |   |
| Total current liabilities                                                                                                                                                                                                                                                                         |   |                     | 33,616  |   |   |   | 22,285 |   |
| Contingent consideration payable-non-current                                                                                                                                                                                                                                                      |   |                     | 2,307   |   |   |   | 2,822 |   |
| Other Non-current liabilities                                                                                                                                                                                                                                                                     |   |                     | 1,090   |   |   |   | 961 |   |
| Total liabilities                                                                                                                                                                                                                                                                                 |   |                     | 37,013  |   |   |   | 26,068 |   |
| Shareholders' equity:                                                                                                                                                                                                                                                                             |   |                     |    |   |   |   |   |   |
| Ordinary shares (No par value; 451,925,654 shares authorized  as of December 31, 2010 and 2011; 179,610,128 shares issued and outstanding as of December 31, 2010;  182,762,475 shares issued and 177,621,367 shares outstanding as of December 31, 2011, respectively)) |   |                     | -       |   |   |   | - |   |
| Additional paid-in capital                                                                                                                                                                                                                                                                        |   |                     | 177,467 |   |   |   | 189,094 |   |
| Retained earnings                                                                                                                                                                                                                                                                                 |   |                     | 61,791  |   |   |   | 20,967 |   |
| Accumulated other comprehensive income                                                                                                                                                                                                                                                            |   |                     | 13,456  |   |   |   | 21,684 |   |
| Total shareholders'' equity                                                                                                                                                                                                                                                                       |   |                     | 252,714 |   |   |   | 231,745 |   |
| Total liabilities and shareholders'' equity                                                                                                                                                                                                                                                       |   |                     | 289,727 |   |   |   | 257,813 |   |

----

|                                                                                                                                            |   | Years Ended December 31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                                                                                            |   | 2009                     |   |   | 2010 |   |   | 2011 |   |
|                                                                                                                                            |   |                     |   |   |   |   |   |   |   |
| Net revenues                                                                                                                                    |   |                     | 152    |   |   |   | 130 |   |   |   | 178 |   |
| Cost of revenues (including share-based compensation of US$147, US$136 and US$1,463 in 2009, 2010 and 2011, respectively)                       |   |                     | (147   | ) |   |   | (300 | ) |   |   | (1,622 | ) |
| Gross profit (loss)                                                                                                                             |   |                     | 5      |   |   |   | (170 | ) |   |   | (1,444 | ) |
| Selling and marketing expenses (including share-based compensation of US$158, US$354 and US$7,427 in 2009, 2010 and 2011, respectively)         |   |                     | (158   | ) |   |   | (354 | ) |   |   | (7,427 | ) |
| General and administrative expenses (including share-based compensation of US$938, US$2,434 and US$10,476 in 2009, 2010 and 2011, respectively) |   |                     | (1,484 | ) |   |   | (2,504 | ) |   |   | (16,706 | ) |
| Change in fair value of contingent consideration for business acquisitions                                                                      |   |                     | (549   | ) |   |   | (3,880 | ) |   |   | (1,669 | ) |
| Loss on impairment of goodwill and intangible assets                                                                                            |   |                     | -      |   |   |   | - |   |   |   | (30,009 | ) |
| Total operating expenses                                                                                                                        |   |                     | (2,191 | ) |   |   | (6,738 | ) |   |   | (55,811 | ) |
| Loss from operations                                                                                                                            |   |                     | (2,186 | ) |   |   | (6,908 | ) |   |   | (57,255 | ) |
| Other income (expenses), net                                                                                                                    |   |                     | (185   | ) |   |   | 381 |   |   |   | 1,624 |   |
| Loss on disposal of a subsidiary                                                                                                                |   |                     | -      |   |   |   | - |   |   |   | (23 | ) |
| Equity in earnings of subsidiaries                                                                                                              |   |                     | 15,337 |   |   |   | 25,124 |   |   |   | 14,830 |   |
| Income before provisions for income taxes                                                                                                       |   |                     | 12,966 |   |   |   | 18,597 |   |   |   | (40,824 | ) |
| Provisions for income taxes                                                                                                                     |   |                     | -      |   |   |   | - |   |   |   | - |   |
| Net income (loss)                                                                                                                               |   |                     | 12,966 |   |   |   | 18,597 |   |   |   | (40,824 | ) |

----

|                                                                                                              |   | Series Apreferred shares |        |   | Series Bpreferred shares |   |    | Ordinary shares |   |   | Shares to  |   |   | Additional paid-in |   |   | Retained |   |        | Accumulated other comprehensive |   |   | Shareholders'' |   |   | Total Comprehensive |    |
|-------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-------------|--------|--------------------------|--------|---------|-----------------|--------|--------|------------|--------|--------|--------------------|--------|--------|----------|--------|-------------|---------------------------------|--------|--------|----------------|--------|--------|---------------------|---------|
|                                                                                                              |   | Shares                   |        |   | Amount                   |   |    | Shares          |   |   | Amount     |   |   | Shares outstanding |   |   | Amount   |   |        | be issued                       |   |   | capital        |   |   | earnings            |    |   | income |   |   | equity |   |   | income |   |
|                                                                                                              |   |                     |        |   |                     |   |    |            |   |   |       |   |   |               |   |   |     |   |        |                            |   |   |           |   |   |                |    |   |   |   |   |   |   |   |   |   |
| Balance as of January 1, 2009                                                                                     |   |                     | 44,055,018  |   |                     |   | 28,725  |            |   |   | 4,019,328  |   |   |               | 5,000  |   |     |   | 76,774,814  |                            |   |   | -              |   |   |                | 3,270   |   |   |   | 11,643 |   |   |   | 30,228 |   |   |   | 7,191 |   |   |   | 86,057 |   |   |   |   |
| Issuance of ordinary shares in connection with business acquisition of Yinfeng                                    |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | 1,000,000   |                            |   |   | -              |   |   |                | (1,218  | ) |   |   | 1,218 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |
| Issuance of ordinary shares in connection with business acquisition of Agree                                      |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | 4,866,180   |                            |   |   | -              |   |   |                | -       |   |   |   | 6,095 |   |   |   | - |   |   |   | - |   |   |   | 6,095 |   |   |   |   |
| Ordinary shares to be issued in connection with settlement of contingent consideration for acquisition of Yinfeng |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | -           |                            |   |   | -              |   |   |                | 3,223   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,223 |   |   |   |   |
| Ordinary shares to be issued in connection with business acquisition of Tansun                                    |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | -           |                            |   |   | -              |   |   |                | 5,760   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,760 |   |   |   |   |
| Share based compensation                                                                                          |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | -           |                            |   |   | -              |   |   |                | -       |   |   |   | 1,243 |   |   |   | - |   |   |   | - |   |   |   | 1,243 |   |   |   |   |
| Foreign currency translation adjustment                                                                           |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | -           |                            |   |   | -              |   |   |                | -       |   |   |   | - |   |   |   | - |   |   |   | 156 |   |   |   | 156 |   |   |   | 156 |   |
| Net income                                                                                                        |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | -           |                            |   |   | -              |   |   |                | -       |   |   |   | - |   |   |   | 12,966 |   |   |   | - |   |   |   | 12,966 |   |   |   | 12,966 |   |
| Balance as of December 31, 2009                                                                                   |   |                     | 44,055,018  |   |                     |   | 28,725  |            |   |   | 4,019,328  |   |   |               | 5,000  |   |     |   | 82,640,994  |                            |   |   | -              |   |   |                | 11,035  |   |   |   | 20,199 |   |   |   | 43,194 |   |   |   | 7,347 |   |   |   | 115,500 |   |   |   | 13,122 |   |
| Issuance of ordinary shares                                                                                       |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | 7,932,000   |                            |   |   | -              |   |   |                | (11,035 | ) |   |   | 11,035 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Conversion of preferred shares upon the initial public offering ("IPO")                                           |   |                     | (44,055,018 | )      |                     |   | (28,725 | )               |   |   | (4,019,328 | )      |   |               | (5,000 | )      |     |   | 48,074,346  |                            |   |   | -              |   |   |                | -       |   |   |   | 33,725 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Issuance of common shares upon IPO                                                                                |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | 36,666,668  |                            |   |   | -              |   |   |                | -       |   |   |   | 89,635 |   |   |   | - |   |   |   | - |   |   |   | 89,635 |   |   |   |   |   |
| Issuance of common shares upon the follow-on public offering                                                      |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | 4,296,120   |                            |   |   | -              |   |   |                | -       |   |   |   | 19,949 |   |   |   | - |   |   |   | - |   |   |   | 19,949 |   |   |   |   |   |
| Share based compensation                                                                                          |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | -           |                            |   |   | -              |   |   |                | -       |   |   |   | 2,924 |   |   |   |   |   |   |   |   |   |   |   | 2,924 |   |   |   |   |   |
| Foreign currency translation adjustment                                                                           |   |                     |        |   |                     |   |    |            |   |   |       |   |   |               |   |   |     |   |        |                            |   |   |           |   |   |                |    |   |   |   |   |   |   |   |   |   |   |   | 6,109 |   |   |   | 6,109 |   |   |   | 6,109 |   |
| Net income                                                                                                        |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | -           |                            |   |   | -              |   |   |                | -       |   |   |   | - |   |   |   | 18,597 |   |   |   | - |   |   |   | 18,597 |   |   |   | 18,597 |   |
| Balance as of December 31, 2010                                                                                   |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | 179,610,128 |                            |   |   | -              |   |   |                | -       |   |   |   | 177,467 |   |   |   | 61,791 |   |   |   | 13,456 |   |   |   | 252,714 |   |   |   | 24,706 |   |
| Issuance of ordinary shares in connection with business acquisition of Dimension                                  |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | 1,152,352   |                            |   |   | -              |   |   |                | -       |   |   |   | 5,341 |   |   |   | - |   |   |   | - |   |   |   | 5,341 |   |   |   |   |   |
| Repurchase of ordinary shares                                                                                     |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | (8,473,600  | )                               |   |   | -              |   |   |                | -       |   |   |   | (14,415 | ) |   |   | - |   |   |   | - |   |   |   | (14,415 | ) |   |   |   |   |
| Options exercised                                                                                                 |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | 5,332,492   |                            |   |   | -              |   |   |                | -       |   |   |   | 1,335 |   |   |   | - |   |   |   | - |   |   |   | 1,335 |   |   |   |   |   |
| Share based compensation                                                                                          |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | -           |                            |   |   | -              |   |   |                | -       |   |   |   | 19,366 |   |   |   |   |   |   |   |   |   |   |   | 19,366 |   |   |   |   |   |
| Foreign currency translation adjustment                                                                           |   |                     |        |   |                     |   |    |            |   |   |       |   |   |               |   |   |     |   |        |                            |   |   |           |   |   |                |    |   |   |   |   |   |   |   |   |   |   |   | 8,228 |   |   |   | 8,228 |   |   |   | 8,228 |   |
| Net loss                                                                                                          |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | -           |                            |   |   | -              |   |   |                | -       |   |   |   | - |   |   |   | (40,824 | ) |   |   | - |   |   |   | (40,824 | ) |   |   | (40,824 | ) |
| Balance as of December 31, 2011                                                                                   |   |                     | -           |   |                     |   | -       |            |   |   | -          |   |   |               | -      |   |     |   | 177,621,372 |                            |   |   | -              |   |   |                | -       |   |   |   | 189,094 |   |   |   | 20,967 |   |   |   | 21,684 |   |   |   | 231,745 |   |   |   | (32,596 | ) |

----

|                                                                                        |   | Years Ended December 31, |    |
|---------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                        |   | 2009                     |    |   | 2010 |   |   | 2011 |   |
| Cash flows from operating activities:                                                       |   |                     |    |   |   |   |   |   |   |
| Net income                                                                                  |   |                     | 12,966  |   |   |   | 18,597 |   |   |   | (40,824 | ) |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |   |                     |    |   |   |   |   |   |   |   |   |   |
| Equity in earnings of subsidiaries                                                          |   |                     | (15,337 | ) |   |   | (25,124 | ) |   |   | (14,830 | ) |
| Loss on disposal of subsidiary                                                              |   |                     | -       |   |   |   | - |   |   |   | 23 |   |
| Share-based compensation                                                                    |   |                     | 1,243   |   |   |   | 2,924 |   |   |   | 19,366 |   |
| Change in fair value of contingent consideration for acquisitions of Tansun and Dimension   |   |                     | 549     |   |   |   | 3,880 |   |   |   | 1,669 |   |
| Loss on impairment of goodwill and intangible assets                                        |   |                     | -       |   |   |   | - |   |   |   | 30,009 |   |
| Changes in operating assets and liabilities:                                                |   |                     |    |   |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                         |   |                     | (15     | ) |   |   | (6 | ) |   |   | (27 | ) |
| Amounts due from related parties                                                            |   |                     | 1,297   |   |   |   | (1,757 | ) |   |   | (14,872 | ) |
| Prepaid expenses and other current assets                                                   |   |                     | 49      |   |   |   | (769 | ) |   |   | (825 | ) |
| Other non-current assets                                                                    |   |                     | -       |   |   |   | (352 | ) |   |   | - |   |
| Accrued expenses and other payables                                                         |   |                     | (69     | ) |   |   | 1,153 |   |   |   | 3,501 |   |
| Other long term payable                                                                     |   |                     | -       |   |   |   | 1,090 |   |   |   | (59 | ) |
| Net cash (used in) provided by operating activities                                         |   |                     | 683     |   |   |   | (364 | ) |   |   | (16,869 | ) |
| Cash flows from investing activities:                                                       |   |                     |    |   |   |   |   |   |   |   |   |   |
| Maturity (purchase) of term deposits, net                                                   |   |                     | -       |   |   |   | - |   |   |   | (40,854 | ) |
| Purchases of businesses                                                                     |   |                     | (9,928  | ) |   |   | (13,359 | ) |   |   | (12,936 | ) |
| Investment in subsidiaries Wuxi                                                             |   |                     |    |   |   |   |   |   |   |   | (2,015 | ) |
| Dividend received from subsidiaries                                                         |   |                     | 2,702   |   |   |   | - |   |   |   | - |   |
| Net cash used in investing activities                                                       |   |                     | (7,226  | ) |   |   | (13,359 | ) |   |   | (55,805 | ) |
| Cash flows from financing activities:                                                       |   |                     |    |   |   |   |   |   |   |   |   |   |
| Repurchase of ordinary shares                                                               |   |                     | -       |   |   |   | - |   |   |   | (14,415 | ) |
| Amounts due to related parties                                                              |   |                     | 7,320   |   |   |   | 6,713 |   |   |   | (1,039 | ) |
| Payment of professional fee related to initial public offering                              |   |                     | (264    | ) |   |   | - |   |   |   | (1,242 | ) |
| Proceeds from issuance of initial public offering, net of issuance cost                     |   |                     | -       |   |   |   | 90,818 |   |   |   | - |   |
| Proceeds from follow-on offering                                                            |   |                     | -       |   |   |   | 19,948 |   |   |   | - |   |
| Reimbursed issuance cost from follow-on offering                                            |   |                     | -       |   |   |   | - |   |   |   | 836 |   |
| Payment of reimbursable issuance cost related to follow-on offering                         |   |                     | -       |   |   |   | (141 | ) |   |   | (694 | ) |
| Payment of deferred consideration for acquisitions of Dimension and Tansun                  |   |                     |    |   |   |   | (4,252 | ) |   |   | (7,961 | ) |
| Proceeds from exercise of share options                                                     |   |                     | -       |   |   |   | - |   |   |   | 1,335 |   |
| Net cash provided by financing activities                                                   |   |                     | 7,056   |   |   |   | 113,086 |   |   |   | (23,180 | ) |
| Net increase (decrease) in cash and cash equivalents                                        |   |                     | 513     |   |   |   | 99,363 |   |   |   | (95,854 | ) |
| Cash and cash equivalents, beginning of year                                                |   |                     | 827     |   |   |   | 1,340 |   |   |   | 100,703 |   |
| Cash and cash equivalents, end of year                                                      |   |                     | 1,340   |   |   |   | 100,703 |   |   |   | 4,849 |   |

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| 1.     | BASIS FOR PREPARATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Group’s consolidated financial statements except that the Company used the equity method to account for investments in its subsidiaries.  The parent-only financial statements are presented as the restricted net assets of the consolidated subsidiaries exceed 25% of the consolidated net assets as of December 31, 2011.                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 2.     | INVESTMENTS IN SUBSIDIARIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The Company and its subsidiaries were included in the consolidated financial statements where inter-company balances and transactions were eliminated upon consolidation.  For purpose of the Company’s stand- alone financial statements, its investments in subsidiaries were reported using the equity method of accounting.  The Company’s share of income and losses from its subsidiaries were reported as equity in earnings of subsidiaries in the accompanying parent company financial statements. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 3.     | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The Company is a British Virgin Islands company, therefore, is not subjected to income taxes for all years presented.                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 4.     | RELATED PARTY BALANCE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   | The following represented related party balances as of December 31, 2010 and 2011:                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|                            |   | As of December 31, |    |
|---------------------------------|--------|--------------------|---------|
|                            |   | 2010               |    |   | 2011 |   |
| Amount due from related parties |   |               |    |   |   |   |
| Triumph                         |   |               | 575     |   |   |   | 575 |   |
| King’s                    |   |               | 379     |   |   |   | 729 |   |
| Taiwan Camelot                  |   |               | 1,410   |   |   |   | 1,410 |   |
| Shanghai Camelot                |   |               | 5       |   |   |   | 5 |   |
| Beijing Camelot                 |   |               | 3,079   |   |   |   | 13,746 |   |
| Asialink                        |   |               | 15      |   |   |   | 31 |   |
| Bayshore                        |   |               | 412     |   |   |   | 4,147 |   |
| Yinfeng                         |   |               | -       |   |   |   | 104 |   |
| Total                           |   |               | 5,875   |   |   |   | 20,747 |   |
| Amount due to related parties   |   |               |    |   |   |   |   |   |
| Across Japan                    |   |               | (667    | ) |   |   | - |   |
| Beijing Camelot                 |   |               | -       |   |   |   | - |   |
| Huaqiao                         |   |               | (14,033 | ) |   |   | (12,995 | ) |
| Total                           |   |               | (14,700 | ) |   |   | (12,995 | ) |

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|   | Camelot Information Systems Inc.  |
|--------|----------------------------------------|
|   | By:                          | /s/ Yiming Ma |
|   |                                   | Name: Yiming Ma |
|   |                                   | Title:  Chief Executive Officer |