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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 20-F
  o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT
OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010.
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 Date of event requiring this shell company report
 For the transition period from  to
 Commission file number: 001-34479
 CHINA REAL ESTATE INFORMATION CORPORATION
 
 
  
  
 
 Securities registered or to be registered pursuant to Section 12(g) of the Act:
 Title of each class
    
    Name of exchange on which each class is to be registeredAmerican Depositary Shares, each representing one 
ordinary share, par value $0.0002 per share
    
    NASDAQ Global Select Market
 Securities registered or to be registered pursuant to Section 12(g) of the Act:
 None
(Title of Class)
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
 None
(Title of Class)
  o þ
 o þ
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
  US GAAP þ
    
    International Financial Reporting Standards as issued
by the International Accounting Standards Board o
    
    Other o
  o o
 o þ
  o o




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##### 



TABLE OF CONTENTS
 INTRODUCTION
    
    
    2PART I
    
    
    3ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
    
    
    3ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
    
    
    3ITEM 3. KEY INFORMATION
    
    
    3ITEM 4. INFORMATION ON THE COMPANY
    
    
    32ITEM 4A. UNRESOLVED STAFF COMMENTS
    
    
    55ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
    
    
    55ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
    
    
    73ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
    
    
    81ITEM 8. FINANCIAL INFORMATION
    
    
    92ITEM 9. THE OFFER AND LISTING
    
    
    92ITEM 10. ADDITIONAL INFORMATION
    
    
    93ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    99ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
    
    
    100PART II
    
    
    101ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
    
    
    101ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
    
    
    101ITEM 15. CONTROLS AND PROCEDURES
    
    
    102ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
    
    
    102ITEM 16B. CODE OF ETHICS
    
    
    103ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    103ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
    
    
    103ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
    
    
    103ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
    
    
    103ITEM 16G. CORPORATE GOVERNANCE
    
    
    103PART III
    
    
    104ITEM 17. FINANCIAL STATEMENTS
    
    
    104ITEM 18. FINANCIAL STATEMENTS
    
    
    104ITEM 19. EXHIBITS
    
    
    104Exhibit 4.40Exhibit 8.1Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2Exhibit 15.1Exhibit 15.2




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INTRODUCTION
  
    
    China or PRC refers to the Peoples Republic of China, excluding, for the
purpose of this annual report only, Taiwan, Hong Kong and Macau;
 
    
    COHT refers to China Online Housing Technology Corporation, an entity that
had operated SINAs real estate online business prior to our initial public offering,
or IPO. We acquired SINAs equity interest in COHT concurrent with our IPO;
 
    
    CRIC system refers to our proprietary real estate information database and
analysis system;
 
    
    E-House refers to our parent company and controlling shareholder E-House
(China) Holdings Limited, a leading real estate services company in China listed on the
New York Stock Exchange;
 
    
    SINA refers to our shareholder SINA Corporation, a leading online media
company in China;
 
    
    shares or ordinary shares refers to our ordinary shares, par value $0.0002
per share; unless the context indicates otherwise, all share and per share data in this
annual report give effect to a 1-for-2 reverse share split that became effective on
August 29, 2009 and a new share issuance to our parent company, E-House, on September
28, 2009;
 
    
    Shanghai CRIC refers to Shanghai CRIC Information Technology Co., Ltd., one
of our main operating subsidiaries;
 
    
    ADSs refers to our American depositary shares, each of which represents one
ordinary share;
 
    
    all references to RMB or Renminbi are to the legal currency of China; all
references to $, dollars, US$ and U.S. dollars are to the legal currency of the
United States; and all references to HKD and Hong Kong dollars are to the legal
currency of the Hong Kong Special Administrative Region.
  FORWARD-LOOKING STATEMENTS
   
    
    our anticipated growth strategies;
 
    
    our future business development, results of operations and financial condition;
 
    
    our ongoing relationships with E-House and SINA;
 
    
    expected changes in our revenues and certain cost or expense items;
  2




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
    
    our ability to attract clients and further enhance our brand recognition; and
 
    
    trends and competition in the real estate services, Internet and online
advertising industries.
   
 PART I
 
 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
  
 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
  
 ITEM 3. KEY INFORMATION
 Selected Financial Data
 Selected Consolidated Financial Data
     3




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For the Years Ended December 31,2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010(in thousands of $, except share, per share and per ADS data)Consolidated Statement of Operations Data:Total revenues
    
    
    5,395
    
    
    
    8,195
    
    
    
    50,049
    
    
    
    95,654
    
    
    
    174,154Cost of revenues
    
    
    (214
    )
    
    
    (895
    )
    
    
    (2,897
    )
    
    
    (12,810
    )
    
    
    (41,010
    )Selling, general and administrative expenses
    
    
    (2,198
    )
    
    
    (4,985
    )
    
    
    (19,820
    )
    
    
    (48,049
    )
    
    
    (109,089
    )Gain from settlement of pre-existing relationship
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,101
    
    
    
    Income from operations
    
    
    2,983
    
    
    
    2,315
    
    
    
    27,332
    
    
    
    36,896
    
    
    
    24,055Interest income
    
    
    23
    
    
    
    193
    
    
    
    420
    
    
    
    279
    
    
    
    1,727Other
income (expense), net
    
    
    
    
    
    
    (157
    )
    
    
    (1,341
    )
    
    
    2,725
    
    
    
    3,174Income before taxes and equity in affiliates
    
    
    3,006
    
    
    
    2,351
    
    
    
    26,411
    
    
    
    39,900
    
    
    
    28,956Income tax expense
    
    
    (894
    )
    
    
    (285
    )
    
    
    (4,721
    )
    
    
    (6,307
    )
    
    
    (2,791
    )Income before equity in affiliates
    
    
    2,112
    
    
    
    2,066
    
    
    
    21,690
    
    
    
    33,593
    
    
    
    26,165Income (loss) from equity in affiliates
    
    
    
    
    
    
    
    
    
    
    154
    
    
    
    22,016
    
    
    
    (276
    )Net income
    
    
    2,112
    
    
    
    2,066
    
    
    
    21,844
    
    
    
    55,609
    
    
    
    25,889Less: net
income (loss) attributable to non-controlling
interest
    
    
    
    
    
    
    
    
    
    
    (318
    )
    
    
    7
    
    
    
    (52
    )Net income attributable to CRIC shareholders
    
    
    2,112
    
    
    
    2,066
    
    
    
    22,162
    
    
    
    55,602
    
    
    
    25,941Earnings per
ordinary shareBasic
    
    $
    0.03
    
    
    $
    0.03
    
    
    $
    0.31
    
    
    $
    0.64
    
    
    $
    0.18Diluted
    
    $
    0.03
    
    
    $
    0.03
    
    
    $
    0.31
    
    
    $
    0.63
    
    
    $
    0.18Earnings per ADS1Basic
    
    $
    0.03
    
    
    $
    0.03
    
    
    $
    0.31
    
    
    $
    0.64
    
    
    $
    0.18Diluted
    
    $
    0.03
    
    
    $
    0.03
    
    
    $
    0.31
    
    
    $
    0.63
    
    
    $
    0.18Weighted average number of ordinary shares used
in per share calculations2Basic
    
    
    71,522,222
    
    
    
    71,522,222
    
    
    
    71,522,222
    
    
    
    86,610,265
    
    
    
    143,288,987Diluted
    
    
    71,522,222
    
    
    
    71,522,222
    
    
    
    71,522,222
    
    
    
    88,264,301
    
    
    
    146,193,046
 
 (1)
    
    Each ADS represents one ordinary share.(2)
    
    Upon incorporation, we had 500,000,000 ordinary shares authorized, 1,000 ordinary shares
issued and outstanding with a par value of $0.0001 per share, all of which were held by
E-House. On January 1, 2009, we issued an additional 99,999,000 ordinary shares to E-House at
par value of $0.0001 per share. On August 29, 2009, we effected a reverse share split whereby
all of our issued and outstanding 100,000,000 ordinary shares of a par value of $0.0001 each
were converted into 50,000,000 ordinary shares of $0.0002 par value each and the number of our
authorized shares were reduced from 500,000,000 to 250,000,000. On September 28, 2009, we
issued 21,522,222 additional ordinary shares at par value of $0.0002 per share to E-House.
Both the reverse share split and the new share issuance to E-House have been retroactively
reflected for all periods presented herein.  As of December 31,2007
    
    
    2008
    
    
    2009
    
    
    2010(in thousands of $)Consolidated Balance Sheets Data:Cash and cash equivalents
    
    
    26,411
    
    
    
    25,791
    
    
    
    311,067
    
    
    
    340,720Total assets
    
    
    30,823
    
    
    
    83,750
    
    
    
    1,020,091
    
    
    
    1,083,923Total current liabilities
    
    
    1,105
    
    
    
    14,926
    
    
    
    35,638
    
    
    
    52,516Total equity
    
    
    29,718
    
    
    
    66,511
    
    
    
    942,421
    
    
    
    991,438
 Exchange Rate Information
   4




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Exchange RatePeriod
    
    Period End
    
    
    Average(1)
    
    
    Low
    
    
    High2006
    
    
    7.8041
    
    
    
    7.9579
    
    
    
    8.0702
    
    
    
    7.80412007
    
    
    7.2946
    
    
    
    7.5806
    
    
    
    7.8127
    
    
    
    7.29462008
    
    
    6.8225
    
    
    
    6.9193
    
    
    
    7.2946
    
    
    
    6.78002009
    
    
    6.8259
    
    
    
    6.8295
    
    
    
    6.8470
    
    
    
    6.81762010
    
    
    6.6000
    
    
    
    6.7603
    
    
    
    6.8102
    
    
    
    6.6000October
    
    
    6.6705
    
    
    
    6.6675
    
    
    
    6.6912
    
    
    
    6.6397November
    
    
    6.6670
    
    
    
    6.6537
    
    
    
    6.6906
    
    
    
    6.6233December
    
    
    6.6000
    
    
    
    6.6497
    
    
    
    6.6745
    
    
    
    6.60002011January
    
    
    6.6017
    
    
    
    6.5964
    
    
    
    6.6364
    
    
    
    6.5809February
    
    
    6.5713
    
    
    
    6.5761
    
    
    
    6.5965
    
    
    
    6.5520March
    
    
    6.5483
    
    
    
    6.5645
    
    
    
    6.5743
    
    
    
    6.5483April
(through April 15, 2011)
    
    
    6.5317
    
    
    
    6.5382
    
    
    
    6.5477
    
    
    
    6.5310
 Source: Federal Reserve Statistical Release(1)
    
    Annual averages are calculated from month-end rates. Monthly averages are calculated using
the average of the daily rates during the relevant period. Capitalization and Indebtedness
  Reasons for the Offer and Use of Proceeds
  Risk Factors
 Risks Related to Our Business
 We are not likely to sustain the high growth rate we have experienced up to now; if we cannot
manage our growth effectively and efficiently, our results of operations and profitability could be
materially and adversely affected.
   5




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Our results of operations may fluctuate or otherwise be materially and adversely affected due to
seasonal variations and the project-by-project nature of some of our real estate consulting
services.
   We may not be able to successfully execute our strategy of expanding into new geographical markets
in China, which may have a material adverse effect on our business, results of operations and
prospects.
    6




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We may not be able to successfully execute our growth strategy of expanding our client base and
increasing the average spending of our clients on our services, which could have a material adverse
effect on our results of operations and prospects.
  Our business is susceptible to fluctuations in the real estate market of China, which may
materially and adversely affect our revenues and results of operations.
    Our business may be materially and adversely affected by government measures affecting Chinas real
estate industry.
   7




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
    
    The down payment for the first self-use housing unit purchased by a family with a
gross construction area of more than 90 square meters must be no less than 30% of the
purchase price;
 
    
    The minimum down payment for the second housing unit purchased by a family is
increased from 40% to 50% and the loan interest rate must be no less than 110% of
benchmark lending interest rate;
 
    
    The down payment for the third or more housing unit purchased by any family and the
loan interest rate must be further increased significantly based on the rate for the
first and second housing units, as determined by commercial banks based on their
assessment of the risks;
 
    
    In regions where housing unit prices are too high or have risen too fast or
supply of housing units is insufficient, commercial banks may suspend extending loans
to families for their purchases of the third or more housing unit, and may suspend
extending loans to individuals for their purchase of housing units outside the region
where they reside if they cannot furnish evidence of their payment of tax or social
insurance premium for at least one year locally in the region where the subject housing
units are located; and
 
    
    Local governments are allowed to limit the total number of housing units one
can purchase during a  certain period in light of the local situation.
  
    
    The minimum down payment for the second housing unit purchased by a family is
increased from 50% to 60% and the loan interest rate must be no less than 110% of
benchmark lending interest rate;
 
    
    The business tax is imposed and calculated on the full sales revenues for the
sale of all housing units held for less than five years, and on the difference between
the sales revenue and the amount paid for
the housing unit for the sale of non-ordinary housing units which were purchased five or
more years ago;
  8




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
    
    All municipalities directly under the central government, all provincial
capitals and other cities where the local housing prices are deemed to be too high or
to have risen too fast are required to temporarily suspend  the sale of
housing units to families with registered local permanent residences that already own
two or more housing units, families without registered local permanent residences that
already own one or more housing units, and families without registered local
permanent residences that cannot provide evidence of their local payment of taxes or
social insurance premiums for a required period;
 
    
    Real property tax pilot projects were launched in Shanghai and Chongqing. Local
regulations require a real property tax to be imposed on certain local housing units
purchased on or after January 28, 2011, at a current tax rate of 0.6% in Shanghai and
at a tax rate ranging from 0.5% to 1.2% in Chongqing. In Chongqing, the real property
tax is also imposed on local independent houses owned by individuals; and
 
    
    In the circular promulgated by the General Office of the State Council on
January 26, 2011, each citys government is required to appropriately set up and make
public its target for controlling the price of local, newly built, residential housing
units in 2011. Accordingly, many cities, including Shanghai, Beijing, Chongqing and
Shenzhen, have already announced their respective price control targets for 2011.
   A severe or prolonged downturn in the global or Chinese economy could materially and adversely
affect our business and our financial condition.
   9




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To date, a limited number of real estate developers have contributed a substantial portion of our
revenues due to the large size of their contracts with us; if we fail to continue to secure large
contracts from existing, new or former clients, this could materially and adversely impact our
revenues, results of operations and financial condition, or cause fluctuations in our revenues,
which may make it difficult to predict our future results of operations.
   Our real estate online business has relied on a limited number of advertising agencies, which may
materially and adversely affect the results of operations and financial condition of our real
estate online business.
  The real estate information and consulting service sector in China is relatively new and rapidly
evolving. If our business model proves to be inappropriate or suboptimal or if new competitors
emerge to better serve the real estate industry, our business may be materially and adversely
affected.
   10




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If we are not able to obtain and maintain accurate, comprehensive and reliable data in our
CRIC system, we could experience reduced demand for our services.
  We have limited experience in operating a real estate online business as a stand-alone company. We
have relied and will continue to rely on SINA's cooperation with us to a large extent. If we fail to
maintain our relationship with SINA in relation to our real estate online operations, our business
and results of operations could be materially and adversely affected.
  If the online advertising market fails to grow as quickly as expected, or if we fail to implement
our growth strategies for our real estate online operations, our business will be materially and
adversely affected.
    11




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A decrease in demand for advertising services in general, and for our real estate advertising
services in particular, could materially and adversely affect our ability to generate advertising
revenues, which in turn could adversely affect our financial condition and results of operations.
  
    
    a decline in the number of their new development projects or temporary or
permanent halts to development projects in the cities in which we operate;
 
    
    a slowdown in the economy in the cities in which we operate;
 
    
    a decision to shift advertising budget to other available advertising media; and
 
    
    a decrease in advertising spending in general.
  We could face liability for information on our websites and for products and services sold over our
real estate Internet websites.
   Technical problems that affect our customers ability to access our services, or temporary or
permanent outages of our computers, software or telecommunications equipment, could lead to reduced
demand for our services, lower revenues and increased costs.
   12




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We may not be able to achieve the benefits we expect from recent and future acquisitions and
business partnerships, which may have an adverse effect on our ability to manage our business
prospects.
    
    
    in April 2010, we acquired 55% of the equity interests in Shanghai Dehu PR
Consulting Co., Ltd., or Shanghai Dehu, a public relations consulting company, by
subscribing for its increased registered capital;
 
    
    also in April 2010, we acquired a 60% interest in Beijing Advertising Age Lotte
Co., Ltd.;
 
    
    in August 2010, we established Beijing China Real Estate Research Association
Technology Ltd., and Beijing China Real Estate Research Association Information Ltd.,
together with certain third parties, and we hold 51% equity interests in each of these
two companies; and
 
    
    in October 2010, through Shanghai Dehu, we established Tianjin Taili Dongren
Culture and Communications Co., Ltd. together with a third party, and Shanghai Dehu
holds a 60% equity interest in it.
  13




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
    
    unidentified issues not discovered in our due diligence process, such as hidden
liabilities and legal contingencies;
 
    
    distraction of managements attention from normal business operations during
the acquisition and integration process;
 
    
    failure to effectively integrate acquired assets and talent into our business
and culture;
 
    
    diversion of resources from our existing businesses and technologies; and
 
    
    failure to realize the synergies expected from the acquisitions or business
partnerships.
  Any failure to protect our brand, trademarks, software copyrights, trade secrets and other
intellectual property rights could have a negative impact on our business.
     14




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Any negative development in SINAs market position, harm to SINAs brand or SINAs operations, or
regulatory actions or legal proceedings affecting SINAs
intellectual property on which our real
estate online business relies, could materially and adversely affect our business and results of
operations due to our dependence on SINA for our real estate online business.
 house.sina.com.cn jiaju.sina.com.cn house.sina.com.cn jiaju.sina.com.cn, www.leju.com house.sina.com.cn jiaju.sina.com.cn. www.sina.com.cn
 We may face increased competition and, if we are unable to compete successfully, our financial
condition and results of operations may be harmed.
 soufun.com
 soufun.com anjuke.com focus.cn
    15




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Substantial defaults by our clients on accounts receivable could have a material adverse effect on
our business, results of operations and financial condition.
  If we fail to hire, train and retain qualified managerial and other employees, our business and
results of operations could be materially and adversely affected.
   Failure to obtain or keep requisite licenses and permits for our business operations may subject us
to significant financial penalties and other government sanctions.
   16




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Copyright infringement and other intellectual property claims against us may adversely affect our
business and our ability to operate our CRIC system.
    17




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Failure to achieve and maintain effective internal controls over financial reporting could cause us
to inaccurately report our financial result or fail to prevent fraud and have a material adverse
effect on our business, results of operations and the trading price of our ADSs.
   Any natural or other disasters, including outbreaks of health epidemics and other extraordinary
events could severely disrupt our business operations.
   We do not have any business liability, disruption or litigation insurance, and any business
disruption or litigation we experience might result in our incurring substantial costs and
diversion of resources.
  Risks Related to Our Carve-out from E-House and Our Relationships with E-House
 E-House will control the outcome of shareholder actions in our company.
    18




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We may have conflicts of interest with E-House and, because of E-Houses controlling ownership
interest in our company, may not be able to resolve such conflicts on favorable terms for us.
  
    
    Indemnification arrangements with E-House. We have agreed to indemnify E-House
with respect to lawsuits and other matters relating to our real estate information and
consulting services business, including operation of that business when it was a
business unit of E-House. These indemnification arrangements could result in our having
interests that are adverse to those of E-House including, for example, different
interests with respect to settlement arrangements in a litigation matter. In addition,
under these arrangements, we have agreed to reimburse E-House for liabilities incurred
(including legal defense costs) in connection with any litigation, while E-House will
be the party prosecuting or defending the litigation.
 
    
    Non-competition arrangements with E-House. We and E-House have each agreed not
to compete with the core business of each other. E-House has agreed not to compete with
us in the business of providing real estate information and consulting services, real
estate advertising services, and operating business-to-business and
business-to-consumer Internet websites targeting participants in the real estate
industry anywhere in the world. We have agreed not to compete with E-House in primary
real estate agency services, secondary real estate brokerage services and any other
businesses conducted by E-House, except real estate information and consulting services
and related support services.
 
    
    Employee recruiting and retention. Because both E-House and we are based in
Shanghai and engage in real estate services in China, we may compete with E-house in
the hiring of new employees, in particular with respect to real estate information and
research. We have a non-solicitation arrangement with E-House that
restricts E-House and us from hiring any of the others employees.
 
    
    Our board members or executive officers may have conflicts of interest. Mr. Xin
Zhou, our co-chairman and chief executive officer, is currently also serving as
E-Houses executive chairman. Some of our board members and executive officers also own
 shares or options in E-House. E-House may continue to grant incentive share
compensation to our board members and executive officers from time to time. These
relationships could create, or appear to create, conflicts of interest when these
persons are faced with decisions with potentially different implications for E-House
and us.
 
    
    Sale of shares in our company. E-House may decide to sell all or a portion of
our shares that it holds to a third party, including to one of our competitors, thereby
giving that third party substantial influence over our business and our affairs. Such a
sale could be contrary to the interests of certain of our shareholders, including our
employees or our public shareholders.
 
    
    Allocation of business opportunities. Business opportunities may arise that
both we and E-House find attractive, and which would complement our respective
businesses. E-House may decide to take the opportunities itself, which would prevent us
from taking advantage of the opportunity ourselves.
 
    
    Developing business relationships with E-Houses competitors. So long as
E-House remains as our controlling shareholder, we may be limited in our ability to do
business with its competitors, such as other real estate services companies in China.
This may limit our ability to market our services for the best interest of our company
and our other shareholders.
   19




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Our agreements with E-House may be less favorable to us than similar agreements negotiated between
unaffiliated third parties. In particular, our non-competition agreement with E-House limits the
scope of business that we are allowed to conduct.
  Our marketing and promotion have benefited significantly from our association with E-House. Any
negative development in E-Houses market position or brand recognition may materially and adversely
affect our marketing efforts and the popularity of our brand.
  Risks Related to Our Corporate Structure
 If the PRC government finds that the agreements with our consolidated affiliated entities that
establish the structure for operating our advertising services business and real estate online
business in China do not comply with applicable PRC governmental restrictions on foreign
investment, we could be subject to severe penalties.
   20




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www.leju.com
  
    
    The ownership structures of Tian Zhuo and Beijing Leju are in compliance with
existing PRC laws and regulations;
 
    
    The contractual arrangements governed by PRC law between Shanghai CRIC and Tian
Zhuo and its shareholders establishing the corporate structure for operating our PRC
advertising services business are valid, binding and enforceable in accordance with
their terms based on the currently effective PRC laws and regulations, and will not
result in any violation of current PRC laws or regulations; and
 
    
    The contractual arrangements governed by PRC law among Shanghai SINA Leju,
Beijing Leju, Mr. Xudong Zhu and Mr. Jun Luo establishing the corporate structure for
operating our real estate online business are valid, binding and enforceable in
accordance with their terms based on the currently effective PRC laws and regulations,
and will not result in any violation of current PRC laws or regulations.
     21




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##### Table of Contents




    
    revoking the business and operating licenses of our PRC subsidiaries and
affiliates;
 
    
    discontinuing or restricting our PRC subsidiaries and affiliates operations;
 
    
    imposing fines or confiscating the income of our PRC subsidiaries or
affiliates;
 
    
    imposing conditions or requirements with which we or our PRC subsidiaries and
affiliates may not be able to comply;
 
    
    requiring us or our PRC subsidiaries and affiliates to restructure the relevant
ownership structure or operations; or
 
    
    taking other regulatory or enforcement actions that could be harmful to our
business.
  We rely on contractual arrangements with Tian Zhuo, Beijing Leju and their respective shareholders
for a portion of our operations, which may not be as effective as direct ownership in providing
operational control.
   The shareholders of Tian Zhuo and Beijing Leju may have potential conflicts of interest with us,
which may materially and adversely affect our business and financial condition.
   22




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Contractual arrangements we have entered into or may enter into with Tian Zhuo and Beijing Leju may
be subject to scrutiny by the PRC tax authorities and a finding that we, Tian Zhuo or Beijing Leju
owe additional taxes could reduce our net income and the value of your investment.
  Risks Related to Doing Business in China
 Adverse changes in economic and political policies of the PRC government could have a material and
adverse effect on overall economic growth in China, which could adversely affect our business.
    23




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Uncertainties with respect to the Chinese legal system could adversely affect us.
  PRC governmental restrictions on currency conversion may limit our ability to utilize our revenues
and funds effectively and the ability of our PRC subsidiaries and consolidated affiliated entities
to obtain financing.
    Fluctuation in the value of the RMB may have a material adverse effect on your investment.
   24




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PRC regulations relating to the establishment of offshore special purpose companies by PRC
residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or
penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC
subsidiaries ability to increase their registered capital or distribute profits to us, or may
otherwise adversely affect us.
     25




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Failure to comply with PRC regulations regarding the registration requirements for employee stock
ownership plans or share option plans may subject the PRC plan participants or us to fines and
other legal or administrative sanctions.
  PRC regulations relating to foreign acquisitions may subject us to requisite approval by the
Ministry of Commerce, and the failure to obtain such approval could have a material and adverse
effect on our business, operating results, reputation and trading price of our ADSs.
      26




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Failure to comply with PRC laws and regulations relating to the advertising industry may subject us
to fines and legal or administrative sanctions, government actions and civil claims, or otherwise
adversely affect our operation.
  Our holding company relies principally on dividends and other distributions on equity paid by our
PRC subsidiaries to fund any cash and financing requirements it may have, and any limitation on the
ability of our PRC subsidiaries to make payments to our holding company could have a material
adverse effect on its ability to fund our operations, make investments or acquisitions, or pay
dividends.
  PRC regulation of loans and direct investment by offshore holding companies to PRC entities may
delay or prevent us from making loans or additional capital contributions to our PRC operating
subsidiaries.
    27




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The discontinuation of any of the preferential tax treatments currently available to us in the PRC
or imposition of any additional PRC taxes on us could adversely affect our financial condition and
results of operations.
   Our business benefits from tax-related government incentives and discretionary policies. Expiration
of, or changes to, these incentives or policies could have a material adverse effect on our
operating results.
  Dividends payable to us by our PRC subsidiaries may be subject to PRC withholding taxes, we may be
subject to PRC taxation on our worldwide income, and dividends distributed to our non-PRC investors
may be subject to PRC withholding taxes under the PRC Enterprise Income Tax Law.
    28




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Risks Related to Our ADSs
 The market price for our ADSs has been and may continue to be volatile.
  
    
    actual or anticipated fluctuations in our quarterly operating results;
 
    
    changes in financial estimates by securities research analysts;
 
    
    conditions in the real estate and/or advertising industries in China;
  29




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
    
    changes in the economic performance or market valuations of other real estate
services companies;
 
    
    announcements by us or our competitors of new products, acquisitions, strategic
partnerships, joint ventures or capital commitments;
 
    
    addition or departure of key personnel;
 
    
    fluctuations of exchange rates between the RMB and U.S. dollar or other foreign
currencies;
 
    
    sales or repurchases of our ADSs or ordinary shares; and
 
    
    general economic or political conditions in China.
  We may need additional capital, and the sale of additional ADSs or other equity securities could
result in dilution to our shareholders.
  Substantial future sales of our ADSs in the public market, or the perception that these sales could
occur, could cause the price of our ADSs to decline.
   We are a controlled company within the meaning of the NASDAQ Stock Market Rules and, as a result,
we are exempted from certain corporate governance requirements that provide protection to
shareholders of other companies.
   30




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You may not have the same voting rights as the holders of our ordinary shares and may not receive
voting materials in time to be able to exercise your right to vote.
  You may not be able to participate in rights offerings and may experience dilution of your holdings
as a result.
  You may be subject to limitations on transfer of your ADSs.
  You may face difficulties in protecting your interests, and your ability to protect your rights
through the U.S. federal courts may be limited, because we are incorporated under Cayman Islands
law, conduct substantially all of our operations in China and all of our officers reside outside
the United States.
    31




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We may be classified as a passive foreign investment company, which could result in adverse United
States federal income tax consequences to U.S. Holders.
  
 ITEM 4. INFORMATION ON THE COMPANY
 History and Development of the Company
     32




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Business Overview
 Overview
     33




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##### Table of Contents



Our CRIC System
  Structure and Functionality
  Data on Specific Developments.
 
    
    Detailed information about the development itself. Depending on the nature of
the development as residential, office or commercial, this type of information may
cover the developments location, including street address, names of the roads
surrounding it, and marking on a two-dimensional digital map, number and type of
buildings in the development, total construction area, property developer, sales
agents, property manager, monthly management fee, construction start date, sale start
date, average selling or rental price per square meter, construction materials, plot
ratio, percentage of green space, number of parking spaces, key equipment used in the
building, key tenants, and other information.
 
    
    Primary sales information. For residential developments and some office and
commercial developments, our database contains transaction information on the initial
sales of the units in a development. Such information generally includes total gross
floor area sold, number of units sold, average selling price per square meter,
transaction dates and prices of individual units and total transaction value on a
monthly basis during the primary sales period.
 
    
    Photographs. Depending on the nature of the development, the database generally
contains photographs of the development, model units, public space inside and outside a
building, and the surrounding areas. For some residential developments, there are also
scanned images of floor plans of the units within the building. In addition, we have
satellite images for each city covered by our database.
  34




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
    
    Advertising spending. For many developments, the database includes data on the
developers advertising spending in connection with the marketing of the projects,
including statistics on spending on print, television and outdoor media advertising.
 
    
    Surrounding areas. The database also allows users to search for other real
estate developments, land for development and certain facilities, such as mass transit
stations, retail establishments, hospitals and schools, in the surrounding area of a
development.
  Research Reports
 Statistics
 News
 Data Collection
    35




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##### Table of Contents



Quality Controls and Data Updating
    System Protection
  Our Services
  Real Estate Information Services
   36




---



##### Table of Contents



Data Subscription Services
  Data Integration Services
  Real Estate Consulting Services
  Land Acquisition Consulting.
  37




---



##### Table of Contents

\

Real Estate Development Consulting
 Marketing Consulting
 Comprehensive Solution Consulting
 Real Estate Advertising Services
   Real Estate Promotional Event Services
  Real estate online services
 History
   38




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##### Table of Contents



Real Estate Websites
 house.sina.com.cn jiaju.sina.com.cn, www.leju.com house.sina.com.cn jiaju.sina.com.cn. www.leju.com house.sina.com.cn jiaju.sina.com.cn www.sina.com.cn
  39




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dichan.sina.com.cn www.dichan.com
 fangyou.sina.com.cn and www.fangyou.com fangyou.sina.com.cn www.fangyou.com www.fangyou.com
 business.dichan.com www.winfang.com dichan.sina.com.cn
 house.baidu.com leju.baidu.com jiaju.baidu.com
  40




---



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Services and Features for Users
            41




---



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Clients
      42




---



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Sales and Marketing
    Seasonality
  Competition
  soufun.com
 
    
    quality and depth of the underlying database, including the accuracy and
timeliness of the data, breadth of geographic coverage, its ease of use, flexibility
and functionality, and services offered;
 
    
    industry expertise and reputation of the research and consulting professionals;
 
    
    quality and breadth of the services offered;
  43




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
    
    client service and support;
 
    
    brand recognition; and
 
    
    overall client experience.
    
    
    other general Internet portals, such as sohu.com, that offer competing real
estate-related content and that compete for online real estate advertising spending;
 
    
    vertically integrated real estate Internet portals such as soufun.comand
anjuke.com;
 
    
    specialized websites focusing on real estate agents, brokers, suppliers and
service providers;
 
    
    local websites focusing on the real estate market in single cities;
 
    
    traditional advertising media such as general purpose newspapers, magazines,
television and outdoor advertising that compete for overall advertising spending; and
 
    
    specialized media such as real estate magazines and newspapers that focus on,
or have sections on, real estate-related products and services.
  Employees and Training
    44




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##### Table of Contents



Facilities
  Legal Proceedings
  Regulation
  Regulation of Real Estate Services Industry
  Establishment and Operation of Real Estate Consulting Services Companies
  Foreign Investments in the Real Estate Consulting Business
  Regulations on Internet Information Services
    45




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Limitations on Foreign Investments in Internet Information Services
     
    
    The ownership structure of Beijing Leju is in compliance with existing PRC laws
and regulations; and
 
    
    The contractual arrangements governed by PRC law among Shanghai SINA Leju,
Beijing Leju, Mr. Xudong Zhu and Mr. Jun Luo, which establish the corporate structure
for operating our real estate online business, are valid, binding and enforceable in
accordance with their terms based on currently effective PRC laws and regulations and
will not result in any violation of current PRC laws or regulations.
  46




---



##### Table of Contents



Information Security and Confidentiality of User Information
    Certain Licenses and Approvals Required for Internet-Based Businesses
  Internet Publishing
  Online News Publishing
   47




---



##### Table of Contents



Online Transmission of Audio-Visual Programs
   Online Cultural Activities
  Regulations on Advertising Services
 Limitations on Foreign Investments in Advertising
    48




---



##### Table of Contents




    
    The ownership structure of Tian Zhuo is in compliance with existing PRC laws
and regulations;
 
    
    The ownership structure of Beijing Leju is in compliance with existing PRC laws
and regulations;
 
    
    The contractual arrangements governed by PRC law between Shanghai CRIC and Tian
Zhuo and its shareholders establishing the corporate structure for operating our PRC
advertising services business are valid, binding and enforceable in accordance with
their terms based on currently effective PRC laws and regulations, and will not result
in any violation of current PRC laws or regulations; and
 
    
    The contractual arrangements governed by PRC law among Shanghai SINA Leju,
Beijing Leju, Mr. Xudong Zhu and Mr. Jun Luo, which establish the corporate structure
for operating our real estate online business, are valid, binding and enforceable in
accordance with their terms based on the currently effective PRC laws and regulations,
and will not result in any violation of current PRC laws or regulations.
   Advertising Services
   49




---



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Advertising Content
  Operational Matters of the Advertising Business
  Regulations on Software Development Activities
  Regulations on Intellectual Property Rights
 Trademarks
   50




---



##### Table of Contents



Copyrights
  Trade Secrets
  Regulations on Foreign Currency Exchange
      51




---



##### Table of Contents



Regulations on Loans to and Direct Investment in PRC Entities by Offshore Holding Companies
    Regulations on Foreign Exchange Registration of Offshore Investment by PRC Residents
   52




---



##### Table of Contents



Regulations on Employee Share Options
   Regulations on Dividend Distributions
   53




---



##### Table of Contents



Organizational Structure
  
 (1)
    
    Prior to the completion of acquisition of SINAs real estate online business, we and SINA
held 34% and 66% equity interests in COHT, respectively. Pursuant to a share purchase
agreement we entered into with SINA on July 23, 2009 and amended on September 29, 2009, we
acquired SINAs 66% equity interest in COHT and became the 100% shareholder of COHT on October
21, 2009.(2)
    
    Shanghai CRIC also wholly owns Wuhan CRIC Information Technology Co., Ltd. and Chengdu CRIC
Information Technology Co., Ltd., which are not illustrated in this diagram.(3)
    
    Tian Zhuo is a consolidated affiliated entity established in China in 2008 and is 90% owned
by Mr. Xin Zhou, who is also our co-chairman and chief executive officer and the executive
chairman of E-House, and 10% owned by Mr. Xudong Zhu, our former director and head of our
advertising operations. We effectively control Tian Zhuo through contractual arrangements. See
Item 7. Major Shareholders and Related Party TransactionsContractual Arrangements with Tian
Zhuo.(4)
    
    Beijing Leju is a consolidated affiliated entity established in China in 2008 and is 80%
owned by Mr. Xudong Zhu, our former director and head of our advertising operations, and 20%
owned by Mr. Jun Luo, our director and  co-president. We effectively control Beijing Leju through
contractual arrangements. See Item 7. Major Shareholders and Related Party
TransactionsContractual Arrangements with Beijing Leju.  54




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Property, Plants and Equipment
  
 ITEM 4A. UNRESOLVED STAFF COMMENTS
  
 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
  Operating Results
 Overview
       55




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##### Table of Contents



Factors Affecting Our Results of Operations
  
    
    changes in governmental policies and laws affecting real estate and real estate
financing;
 
    
    economic growth and development across different regions of China;
 
    
    supply of and demand for housing and other types of property in local markets;
 
    
    government policies on online advertising;
 
    
    the perceived effectiveness of online advertising as compared to advertising in
more traditional media;
 
    
    entry barriers and competition from other real estate services companies; and
 
    
    increases in operating costs and expenses due to inflation and other factors.
  Revenues.
 Real Estate Information and Consulting Services
  56




---



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57




---



##### Table of Contents



Real estate online services
  Other Services
   Cost of Revenues .
  58




---



##### Table of Contents



Selling, General and Administrative Expenses .
 Share-Based Compensation Expenses .
  Options
 Number ofOrdinary Shares
    
    
    ExerciseGrant Date
    
    Underlying Options Granted
    
    
    PriceJanuary 1, 2009
    
    
    4,707,698
    (1)
    
    $
    3.00July 15, 2009
    
    
    900,290
    
    
    $
    6.00July 30, 2009
    
    
    300,000
    
    
    $
    6.00September 24, 2009
    
    
    1,269,501
    
    
    $
    8.00March 10, 2011
    
    
    2,782,000
    
    
    $
    7.02
 (1)
    
    Options to purchase 756,000 ordinary shares granted on January 1, 2009 were later modified on
July 15, 2009. The number of these options was reduced to 251,500 and the vesting schedule was
shortened to one to two year from two to four year subsequent to the original grant date. Restricted Shares
 Number of Restricted
    
    
    GrantGrant Date
    

Shares Granted
    
    
    PriceJuly 30, 2009
    
    
    125,000
    (1)
    
    $
    3.00July 30, 2009
    
    
    37,500
    (2)
    
    $
    6.00
 (1)
    
    250,000 of these options were surrendered for cancellation on July 30, 2009, in exchange for
the same number of restricted shares having the same vesting schedule and a purchase price
equal to the original option exercise price.(2)
    
    50,000 of these options were surrendered for cancellation on July 30, 2009, in exchange for
the same number of restricted shares having the same vesting schedule and a purchase price
equal to the original option exercise price.  59




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
    
    the nature of our business and the contracts and agreements relating to our
business;
 
    
    the global economic outlook in general and the specific economic and
competitive elements affecting our business;
 
    
    the nature and prospects of the real estate service industry in China;
 
    
    the growth of our operations; and
 
    
    our business risks.
   
    
    weighted average costs of capital of 21.41%, 18% and 18% were used for options
granted on January 1, July 15 and July 30, 2009, respectively. This was the combined
result of the changes in risk-free rate and industry average beta and the decrease in
our company-specific risks; and
 
    
    discount for lack of marketability of 22.18%, 11.95% and 9.47% was used for
options granted on January 1, July 15 and July 30, 2009, respectively. This took into
consideration our then pending IPO.
    60




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Other Income .
 Taxation
       61




---



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Critical Accounting Policies
   Revenue Recognition
       62




---



##### Table of Contents



Share-based Compensation
    63




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##### Table of Contents



Goodwill Valuation
    Income Taxes
  Results of Operations
  For the Years Ended December 31,2008
    
    
    2009
    
    
    2010(in thousands of $)Revenues
    
    
    50,049
    
    
    
    95,654
    
    
    
    174,154Cost of revenues
    
    
    (2,897
    )
    
    
    (12,810
    )
    
    
    (41,010
    )Selling, general and administrative expenses
    
    
    (19,820
    )
    
    
    (48,049
    )
    
    
    (109,089
    )Gain from settlement of pre-existing relationship
    
    
    
    
    
    
    2,101
    
    
    
    Income from operations
    
    
    27,332
    
    
    
    36,896
    
    
    
    24,055Interest expense
    
    
    420
    
    
    
    279
    
    
    
    1,727Other income, net
    
    
    (1,341
    )
    
    
    2,725
    
    
    
    3,174Income before taxes and equity in affiliates
    
    
    26,411
    
    
    
    39,900
    
    
    
    28,956Income tax expenses
    
    
    (4,721
    )
    
    
    (6,307
    )
    
    
    (2,791
    )Income before equity in affiliates
    
    
    21,690
    
    
    
    33,593
    
    
    
    26,165Income from equity in affiliates
    
    
    154
    
    
    
    22,016
    
    
    
    (276
    )Net income
    
    
    21,844
    
    
    
    55,609
    
    
    
    25,889Less: net
income (loss) attributable to non-controlling interest
    
    
    (318
    )
    
    
    7
    
    
    
    (52
    )Net
income attributable to CRIC shareholders
    
    
    22,162
    
    
    
    55,602
    
    
    
    25,941
  64




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Segment Information
     Real EstateInformation and
    
    
    Real EstateYear Ended December 31, 2010
    
    Consulting
    
    
    Online
    
    
    Other
    
    
    Non-Segment Information
    
    Services
    
    
    Services
    
    
    Services
    
    
    allocated
    
    
    Total(in thousands of $)Revenues from external customers
    
    
    87,567
    
    
    
    66,855
    
    
    
    19,732
    
    
    
    
    
    
    
    174,154Cost of revenues
    
    
    (3,017
    )
    
    
    (26,361
    )
    
    
    (11,632
    )
    
    
    
    
    
    
    (41,010
    )Selling, general and
administrative expenses
    
    
    (35,270
    )
    
    
    (54,741
    )
    
    
    (8,218
    )
    
    
    (10,860
    )
    
    
    (109,089
    )Income (loss) from operations
    
    
    49,280
    
    
    
    (14,247
    )
    
    
    (118
    )
    
    
    (10,860
    )
    
    
    24,055Interest income
    
    
    1,156
    
    
    
    286
    
    
    
    110
    
    
    
    175
    
    
    
    1,727Other income, net
    
    
    2,360
    
    
    
    (23
    )
    
    
    734
    
    
    
    103
    
    
    
    3,174Income (loss) before taxes and
equity in affiliates
    
    
    52,796
    
    
    
    (13,984
    )
    
    
    726
    
    
    
    (10,582
    )
    
    
    28,956Income tax benefit (expense)
    
    
    (2,911
    )
    
    
    456
    
    
    
    (336
    )
    
    
    
    
    
    
    (2,791
    )Income (loss) before equity in
affiliates
    
    
    49,885
    
    
    
    (13,528
    )
    
    
    390
    
    
    
    (10,582
    )
    
    
    26,165Loss from equity in affiliates
    
    
    (271
    )
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (276
    )Net income (loss)
    
    
    49,614
    
    
    
    (13,533
    )
    
    
    390
    
    
    
    (10,582
    )
    
    
    25,889
 Real EstateInformation and
    
    
    Real EstateYear Ended December 31, 2009
    
    Consulting
    
    
    Online
    
    
    Other
    
    
    Non-Segment Information
    
    Services
    
    
    Services
    
    
    Services
    
    
    allocated
    
    
    Total(in thousands of $)Revenues from external customers
    
    
    68,045
    
    
    
    13,830
    
    
    
    13,779
    
    
    
    
    
    
    
    95,654Cost of revenues
    
    
    (1,866
    )
    
    
    (4,930
    )
    
    
    (6,014
    )
    
    
    
    
    
    
    (12,810
    )Selling, general and
administrative expenses
    
    
    (22,723
    )
    
    
    (11,360
    )
    
    
    (5,691
    )
    
    
    (8,275
    )
    
    
    (48,049
    )Gain from settlement of
pre-existing relationship
    
    
    2,101
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,101Income (loss) from operations
    
    
    45,557
    
    
    
    (2,460
    )
    
    
    2,074
    
    
    
    (8,275
    )
    
    
    36,896Interest income
    
    
    166
    
    
    
    24
    
    
    
    28
    
    
    
    61
    
    
    
    279Other income, net
    
    
    2,481
    
    
    
    6
    
    
    
    
    
    
    
    238
    
    
    
    2,725Income (loss) before taxes and
equity in affiliates
    
    
    48,204
    
    
    
    (2,430
    )
    
    
    2,102
    
    
    
    (7,976
    )
    
    
    39,900Income tax benefit (expense)
    
    
    (6,710
    )
    
    
    957
    
    
    
    (554
    )
    
    
    
    
    
    
    (6,307
    )Income (loss) before equity in
affiliates
    
    
    41,494
    
    
    
    (1,473
    )
    
    
    1,548
    
    
    
    (7,976
    )
    
    
    33,593Income from equity in affiliates
    
    
    
    
    
    
    22,016
    
    
    
    
    
    
    
    
    
    
    
    22,016Net income (loss)
    
    
    41,494
    
    
    
    20,543
    
    
    
    1,548
    
    
    
    (7,976
    )
    
    
    55,609
  65




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##### Table of Contents



Real EstateInformation andYear Ended December 31, 2008
    
    Consulting
    
    
    Other
    
    
    Non-Segment Information
    
    Services
    
    
    Services
    
    
    allocated
    
    
    Total(in thousands of $)Revenues from external customers
    
    
    49,116
    
    
    
    933
    
    
    
    
    
    
    
    50,049Cost of revenues
    
    
    (2,855
    )
    
    
    (42
    )
    
    
    
    
    
    
    (2,897
    )Selling, general and administrative expenses
    
    
    (13,777
    )
    
    
    (1,866
    )
    
    
    (4,178
    )
    
    
    (19,821
    )Income (loss) from operations
    
    
    32,484
    
    
    
    (975
    )
    
    
    (4,178
    )
    
    
    27,331Interest income
    
    
    416
    
    
    
    4
    
    
    
    1
    
    
    
    421Foreign exchange loss
    
    
    (1,324
    )
    
    
    
    
    
    
    (17
    )
    
    
    (1,341
    )Income (loss) before taxes and equity in
affiliates
    
    
    31,576
    
    
    
    (971
    )
    
    
    (4,194
    )
    
    
    26,411Income tax benefit (expense)
    
    
    (4,918
    )
    
    
    197
    
    
    
    
    
    
    
    (4,721
    )Income (loss) before equity in affiliates
    
    
    26,658
    
    
    
    (774
    )
    
    
    (4,194
    )
    
    
    21,690Income from equity in affiliates
    
    
    
    
    
    
    
    
    
    
    154
    
    
    
    154Net income (loss)
    
    
    26,658
    
    
    
    (774
    )
    
    
    (4,040
    )
    
    
    21,844
 Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
 Revenues
    Cost of Revenues
 Selling,
General and Administrative Expenses
  66




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##### Table of Contents



Other Income
 Income Tax Expense
 Net Income Attributable to CRIC Shareholders
 Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
 Revenues
    Cost of Revenues
  67




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##### Table of Contents



Selling, General and Administrative Expenses
 Gain from Settlement of Pre-existing Relationship
 Other Income
 Income Tax Expense
 Income from Equity in Affiliates
 Net Income Attributable to CRIC Shareholders
 Inflation
   68




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##### Table of Contents



Impact of Foreign Currency Fluctuation
  Impact of Governmental Policies
  Liquidity and Capital Resources
   For the Years Ended December 31,2008
    
    
    2009
    
    
    2010(in thousands of $)Net cash provided by (used in) operating activities
    
    
    (3,246
    )
    
    
    57,013
    
    
    
    35,995Net cash provided by (used in) investing activities
    
    
    (12,201
    )
    
    
    4,133
    
    
    
    (10,797
    )Net cash provided by financing activities
    
    
    14,097
    
    
    
    223,970
    
    
    
    1,705Net increase (decrease) in cash and cash equivalents
    
    
    (620
    )
    
    
    285,276
    
    
    
    29,653Cash and cash equivalents at the beginning of the year
    
    
    26,411
    
    
    
    25,791
    
    
    
    311,067Cash and cash equivalents at the end of the year
    
    
    25,791
    
    
    
    311,067
    
    
    
    340,720
 Operating Activities
    69




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##### Table of Contents



Investing Activities
     Financing Activities
    70




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##### Table of Contents



Research and Development, Patents and Licenses, etc.
 Research and Development
 dichan.sina.com.cn
  Intellectual Property
  www.cric2009.com www.dichan.com www.fangyou.com
 www.leju.com house.sina.com.cn jiaju.sina.com.cn house.baidu.com leju.baidu.com jiaju.baidu.com
   71




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##### Table of Contents



Trend Information
  Off-Balance Sheet Arrangements
  Tabular Disclosure of Contractual Obligations
  Payments Due by PeriodMore thanTotal
    
    
    1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 years(in thousands of $)Operating lease Obligations
    
    
    16,570
    
    
    
    4,689
    
    
    
    4,206
    
    
    
    301
    
    
    
    7,374
   Safe Harbor
  
    
    our growth strategies;
 
    
    our business partnership with SINA and the expected synergies and benefits from
our integration of our real estate online business acquired from SINA;
 
    
    our future business development, results of operations and financial condition;
 
    
    our ongoing relationships with E-House and SINA;
 
    
    expected changes in our revenues and certain cost or expense items;
 
    
    our ability to attract clients and further enhance our brand recognition; and
 
    
    trends and competition in the real estate services, Internet and online
advertising industries.
  72




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##### Table of Contents



ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 Directors and Senior Management
  Name
    
    Age
    
    Position/TitleXin Zhou
    
    43
    
    Co-Chairman of the Board of Directors and Chief Executive OfficerCharles Chao
    
    45
    
    Co-Chairman of the Board of DirectorsNeil Nanpeng Shen
    
    43
    
    DirectorHong Du
    
    38
    
    DirectorZuyu Ding
    
    37
    
    Director and Co-PresidentJun Luo
    
    43
    
    Director and Co-PresidentFan Bao
    
    40
    
    Independent DirectorDavid Zhang
    
    37
    
    Independent DirectorYa-Qin Zhang
    
    45
    
    Independent DirectorBin Laurence
    
    43
    
    Chief Financial OfficerYan Zhang
    
    37
    
    Vice PresidentZhongmin Jin
    
    36
    
    Vice President and Technology Director
 Mr. Xin Zhou
  73




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##### Table of Contents



Mr. Charles Chao
 Mr. Neil Nanpeng Shen
 Ms. Hong Du
 Mr. Zuyu Ding
 Mr. Jun Luo
  74




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##### Table of Contents



Mr. Fan Bao
 Mr. David Zhang
 Mr. Ya-Qin Zhang
 Ms. Bin Laurence
 Ms. Yan Zhang
 Mr. Zhongmin Jin
  75




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##### Table of Contents



Employment Agreements
  Compensation of Directors and Executive Officers
   Share Incentive Plan
 Share Incentive Plan
 Plan Administration
 Award Agreements
 Eligibility
  76




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##### Table of Contents



Acceleration of Awards upon Corporate Transactions
 Term of the Options
 Vesting Schedule
 Transfer Restrictions
 Termination of the Plan
  OrdinaryShares
    
    
    ExerciseUnderlying
    
    
    Price
    
    
    
    
    
    
    VestingName
    
    Options
    
    
    ($/Share)
    
    
    Date of Grant
    
    Date of Expiration
    
    Schedule(1)Xin Zhou
    
    
    1,250,000
    
    
    
    3.00
    
    
    January 1, 2009
    
    December 31, 2018
    
    4 years500,000
    
    
    
    0.65
    
    
    April 23, 2009
    
    April 22, 2015
    
    4 years150,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsCharles Chao
    
    
    500,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019
    
    4 years100,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsNeil Nanpeng Shen
    
    
    40,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019
    
    3 years25,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsZuyu Ding
    
    
    1,000,000
    
    
    
    3.00
    
    
    January 1, 2009
    
    December 31, 2018
    
    4 years100,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsJun Luo
    
    
    50,000
    
    
    
    3.00
    
    
    January 1, 2009
    
    December 31, 2018
    
    4 years1,000,000
    
    
    
    0.64
    
    
    September 6, 2008
    
    September 5, 2014
    
    4 years100,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsHong Du
    
    
    200,000
    
    
    
    0.65
    
    
    April 23, 2009
    
    April 22, 2015
    
    4 years25,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsFan Bao
    
    
    60,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019
    
    3 years35,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsDavid Zhang
    
    
    40,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019
    
    3 years25,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsYa-Qin Zhang
    
    
    40,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019
    
    3 years25,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsBin Laurence
    
    
    300,000
    
    
    
    6.00
    
    
    July 30, 2009
    
    July 29, 2019
    
    4 years100,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsYan Zhang
    
    
    225,000
    
    
    
    3.00
    
    
    January 1, 2009
    
    December 31, 2018
    
    4 years70,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsZhongmin Jin
    
    
    225,000
    
    
    
    3.00
    
    
    January 1, 2009
    
    December 31, 2018
    
    4 years40,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021
    
    3 yearsOther individuals as a group
    
    
    8,025,180
    (2)
    
    
    0.64
    
    
    September 6, 2008
    
    September 5, 2014
    
    1  4 yearsto 8.00
    
    to March 10, 2011
    
    to March 9, 2021
 (1)
    
    Many of our options are subject to a four-year vesting schedule, with one-fourth of the
underlying ordinary shares vesting on each of the first, second, third and fourth anniversary
of the grant date.(2)
    
    On July 30, 2009, options to purchase 250,000 ordinary shares granted on January 1, 2009 and
options to purchase 50,000 ordinary shares granted on July 15, 2009 were surrendered for
cancellation in exchange for the same number of restricted shares having the same vesting
schedule and a purchase price equal to the original option exercise price.  77




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##### Table of Contents



Board Practices
   Committees of the Board of Directors
   78




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##### Table of Contents



Audit Committee
  
    
    appointing the independent auditors and pre-approving all audit and non-audit
services permitted to be performed by the independent auditors;
 
    
    reviewing with the independent auditors any audit problems or difficulties and
managements response;
 
    
    reviewing and approving all proposed related party transactions, as defined
under applicable U.S. securities laws and regulations;
 
    
    reviewing and discussing the annual audited financial statements with
management and the independent auditors;
 
    
    reviewing major issues as to the adequacy of our internal controls and any
special audit steps adopted in light of material control deficiencies; and
 
    
    meeting separately and periodically with management and the independent
auditors.
  Compensation Committee
  
    
    reviewing at least annually the goals and objectives of our executive
compensation plans and our executive compensation plans in light of such goals and
objectives;
 
    
    evaluating annually the performance of the chief executive officer and other
executive officers in light of the goals and objectives of our executive compensation
plans;
 
    
    determining and approving, or recommending to the board for its approval, the
compensation of such executive officers; and
 
    
    evaluating annually the appropriate level of compensation for the board and
committee service by non-employee directors.
  Duties of Directors
   79




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##### Table of Contents



Terms of Directors and Officers
   Employees
  Number ofFunctional Area
    
    Employees
    
    
    % of TotalSales and marketing
    
    
    879
    
    
    
    24
    %Research and technical
    
    
    1,356
    
    
    
    36
    %General and administrative
    
    
    1,477
    
    
    
    40
    %Total
    
    
    3,712
    
    
    
    100
    %
  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.
  80




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##### Table of Contents



Shares Beneficially OwnedNumber(1)
    
    
    %(2)Directors and Executive Officers:Xin Zhou
    
    
    2,485,408
    
    
    
    1.7Charles Chao
    
    
    *
    
    
    
    *Neil Nanpeng Shen
    
    
    *
    
    
    
    *Hong Du
    
    
    *
    
    
    
    *Fan Bao
    
    
    *
    
    
    
    *David Zhang
    
    
    *
    
    
    
    *Ya-Qin Zhang
    
    
    *
    
    
    
    *Zuyu Ding
    
    
    *
    
    
    
    *Jun Luo
    
    
    *
    
    
    
    *Bin Laurence
    
    
    *
    
    
    
    *Yan Zhang
    
    
    *
    
    
    
    *Zhongmin Jin
    
    
    *
    
    
    
    *All Directors and Executive Officers as a Group
    
    
    4,011,223
    
    
    
    2.8Principal Shareholders:E-House (China) Holdings Limited(3)
    
    
    75,939,975
    
    
    
    53.0SINA Corporation(4)
    
    
    48,589,567
    
    
    
    33.9
 *
    
    Beneficially owns less than 1% of our ordinary shares.(1)
    
    Beneficial ownership is determined in accordance with the rules of the SEC and includes
voting or investment power with respect to the securities.(2)
    
    For each person and group included in this table, percentage of beneficial ownership is
calculated by dividing the number of shares beneficially owned by such person or group by the
sum of the number of ordinary shares outstanding and the number of ordinary shares underlying
share options held by such person or group that are exercisable within 60 days after March 31,
2010.(3)
    
    Includes 74,555,555 ordinary shares and 1,384,420 ADSs. E-House (China) Holdings Limited is a
company incorporated in the Cayman Islands, and its business address is 17/F, Merchandise
Harvest Building (East), No. 333 North Chengdu Road, Shanghai 200041, Peoples Republic of
China.(4)
    
    Includes 47,666,667 ordinary shares and 922,900 ADSs. SINA Corporation is a company
incorporated in Cayman Islands, and its business address is Room 1802, United Plaza, 1468 Nan
Jing Road West, Shanghai 200040, Peoples Republic of China.    
 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 Major Shareholders
  Related Party Transactions
   81




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##### Table of Contents



Transactions with E-House
   Outstanding Loans
  Agreements with E-House
  Master Transaction Agreement
   82




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##### Table of Contents



Offshore Transitional Services Agreement
  
    
    general finance and accounting support;
 
    
    human resources management support;
 
    
    administrative support;
 
    
    internal control and internal audit support;
 
    
    operational management support;
 
    
    legal support; and
 
    
    information technology support.
  83




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##### Table of Contents



Onshore Transitional Services Agreement
     84




---



##### Table of Contents



Non-competition Agreement
    Consulting and Services Agreement
     85




---



##### Table of Contents



Onshore Cooperation Agreement
   Transactions and Agreements with SINA and COHT
   sina.com.cn
 Shareholders Agreement
 Composition of the board
  86




---



##### Table of Contents



Restrictions on transfer
 Registration Rights Agreement
  Demand registration rights
 Piggyback registration rights
 Blackout periods
  87




---



##### Table of Contents



Expenses of registration
 Amended and Restated Advertising Agency Agreement
  Domain Name and Content License Agreement
 house.sina.com.cn jiaju.sina.com.cn
 Trademark License Agreement
 www.leju.com house.sina.com.cn jiaju.sina.com.cn
 Software License and Support Services Agreement
    88




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##### Table of Contents



Contractual Arrangements with Tian Zhuo
  Agreements that Provide Effective Control over Tian Zhuo
 Exclusive Call Option Agreement.
 Loan Agreements
    Shareholder Voting Rights Proxy Agreement
  89




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##### Table of Contents



Equity Pledge Agreement
 Agreements that Transfer Economic Benefits of Tian Zhuo to CRIC
 Consultancy Service Agreement.
 Contractual Arrangements with Beijing Leju
 www.leju.com
 Agreements that Provide Effective Control over Beijing Leju
 Exclusive Call Option Agreement
 Loan Agreement.
  90




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##### Table of Contents



Shareholder Voting Rights Proxy Agreement
 Equity Pledge Agreement
 Memorandum.
 Agreement that Transfers Economic Benefits of Beijing Leju to CRIC
 Exclusive Technical Support Agreement.
 Transactions with Certain Related Customers and Suppliers, Shareholders, Directors and Affiliates
 Transactions with Affiliates
   Transactions with Management
   91




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##### Table of Contents



Share Options
  Interests of Experts and Counsel
  
 ITEM 8. FINANCIAL INFORMATION
 Consolidated Statements and Other Financial Information
  Legal Proceedings
  Dividend Policy
    Significant Changes
  
 ITEM 9. THE OFFER AND LISTING
 Offering and Listing Details
    92




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##### Table of Contents



Sales Price ($)High
    
    
    Low2009 (from October 16)
    
    
    17.15
    
    
    
    9.66October (from October 16)
    
    
    17.15
    
    
    
    12.05November
    
    
    15.85
    
    
    
    11.02December
    
    
    13.90
    
    
    
    9.662010
    
    
    11.74
    
    
    
    7.47First Quarter
    
    
    11.27
    
    
    
    7.88Second Quarter
    
    
    10.58
    
    
    
    7.52Third Quarter
    
    
    11.74
    
    
    
    7.47Fourth Quarter
    
    
    11.14
    
    
    
    8.51October
    
    
    11.14
    
    
    
    9.42November
    
    
    10.67
    
    
    
    8.88December
    
    
    9.85
    
    
    
    8.512011First Quarter
    
    
    9.89
    
    
    
    6.35January
    
    
    9.89
    
    
    
    7.43February
    
    
    8.00
    
    
    
    6.39March
    
    
    7.98
    
    
    
    6.35April (through April 15)
    
    
    8.55
    
    
    
    7.70
 Plan of Distribution
  Markets
  Selling Shareholders
  Dilution
  Expenses of the Issue
  
 ITEM 10. ADDITIONAL INFORMATION
 Share Capital
  Memorandum and Articles of Association
   93




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##### Table of Contents



Material Contracts
   Exchange Controls
  Taxation
  Cayman Islands Taxation
  Peoples Republic of China Taxation
  United States Federal Income Taxation
   94




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##### Table of Contents



HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX
RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF ADSs OR ORDINARY SHARES.
  
    
    an individual who is a citizen or resident of the United States;
 
    
    a corporation (or other entity taxable as a corporation) organized under the
laws of the United States, any State thereof or the District of Columbia;
 
    
    an estate, the income of which is subject to U.S. federal income taxation
regardless of its source; or
 
    
    a trust that (1) is subject to the primary supervision of a court within the
United States and the control of one or more U.S. persons for all substantial decisions
or (2) has a valid election in effect under applicable U.S. Treasury regulations to be
treated as a U.S. person.
    Passive Foreign Investment Company Considerations
   95




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##### Table of Contents



Dividends
     96




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##### Table of Contents



Disposition of the ADSs or Ordinary Shares
  Passive Foreign Investment Company
  
    
    the excess distribution or gain will be allocated ratably over the U.S.
Holders holding period for the ADSs or ordinary shares;
 
    
    the amount allocated to the current taxable year, and any taxable years in your
holding period prior to the first taxable year in which we were a PFIC, or pre-PFIC
year, will be taxable as ordinary income;
 
    
    the amount allocated to each prior taxable year, other than the current taxable
year or a pre-PFIC year, will be subject to tax at the highest tax rate in effect for
individuals or corporations, as applicable, for each such year; and
 
    
    an interest charge generally applicable to underpayments of tax will be imposed
on the tax attributable to each prior taxable year, other than the current taxable year
or a pre-PFIC year.
   97




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##### Table of Contents



Information Reporting and Backup Withholding
  Dividends and Paying Agents
  Statement by Experts
  Documents on Display
  www.sec.gov
  98




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##### Table of Contents



www.cric.com
    Subsidiary Information
  
 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
  Foreign Exchange Risk
    99




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##### Table of Contents



ITEM 12.
    
    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
 A.
    
    Debt Securities
  B.
    
    Warrants and Rights
  C.
    
    Other Securities
  D.
    
    American Depositary Shares
 Fees and Charges Our ADS Holders May Have to Pay
   
    
    a fee of $1.50 per ADS or ADSs for transfers of certificated or direct
registration ADSs;
 
    
    a fee of up to $0.05 per ADS for any cash distribution made pursuant to the
deposit agreement;
 
    
    a fee of up to $0.05 per ADS per calendar year (or portion
thereof) for
services performed by the depositary in administering the ADSs (which fee may be
charged on a periodic basis during each calendar year and shall be assessed against
holders of ADSs as of the record date or record dates set by the depositary during each
calendar year and shall be payable in the manner described in the next succeeding
provision);
 
    
    reimbursement of such fees, charges and expenses as are incurred by the
depositary and/or any of the depositarys agents (including, without limitation, the
custodian and expenses incurred on behalf of holders in connection with compliance with
foreign exchange control regulations or any law or
regulation relating to foreign investment) in connection with the servicing of the shares or other deposited securities, the delivery of deposited securities or otherwise
in connection with the depositarys or its custodians compliance with applicable law,
rule or regulation (which charge shall be assessed on a proportionate basis against
holders as of the record date or dates set by the depositary and shall be payable at the
sole discretion of the depositary by billing such holders or by deducting such charge
from one or more cash dividends or other cash distributions);
  100




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
    
    a fee for the distribution of securities (or the sale of securities in
connection with a distribution), such fee being in an amount equal to the fee for the
execution and delivery of ADSs which would have been charged as a result of the deposit
of such securities (treating all such securities as if they were shares) but which
securities or the net cash proceeds from the sale thereof are instead distributed by
the depositary to those holders entitled thereto;
 
    
    stock transfer or other taxes and other governmental charges;
 
    
    cable, telex and facsimile transmission and delivery charges incurred at your
request in connection with the deposit or delivery of shares;
 
    
    transfer or registration fees for the registration of transfer of deposited
securities on any applicable register in connection with the deposit or withdrawal of
deposited securities; and
 
    
    expenses of the depositary in connection with the conversion of foreign
currency into U.S. dollars.
  Fees and Other Payments Made by the Depositary to Us
  
 PART II
 
 ITEM 13.
    
    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 ITEM 14.
    
    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
    101




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##### Table of Contents



ITEM 15.
    
    CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Managements Annual Report on Internal Control over Financial Reporting
  Internal ControlIntegrated Framework
  Changes in Internal Control over Financial Reporting
  
 ITEM 16A.
    
    AUDIT COMMITTEE FINANCIAL EXPERT
   102




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ITEM 16B.
    
    CODE OF ETHICS
 ir.cric.com
 
 ITEM 16C.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  2008
    
    
    2009
    
    
    2010Audit fees(1)
    
    
    247,188
    
    
    
    344,591
    
    
    
    806,794Audit-related fees(2)
    
    
    
    
    
    
    969,927
    
    
    
    Tax fees(3)
    
    
    
    
    
    
    
    
    
    
    
 (1)
    
    Audit fees means the aggregate fees billed for professional services rendered by our
principal auditors for the audit of our annual financial statements and the review of our
comparative interim financial statements.(2)
    
    Audit-related fees represents aggregate fees billed for professional services rendered by
our principal auditors for the assurance and related services. The audit-related fees in 2009
primarily included the issuance of the audit and review of financial statements and other
assurance services rendered in connection with our IPO.(3)
    
    Tax fees represents aggregate fees billed for professional services rendered by our
principal auditors for tax compliance, tax advice and tax planning.
  
 ITEM 16D.
    
    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  
 ITEM 16E.
    
    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  Approximate DollarTotal Number of Shares
    
    
    Value of Shares thatTotal Number of
    
    
    Average Price Paid
    
    
    Purchased as Part of
    
    
    may yet be PurchasedPeriod
    
    Shares Purchased
    
    
    Per Share
    
    
    Publicly Announced Plans
    
    
    Under the PlansMarch 17-31
    
    
    524,300
    
    
    
    $7.58
    
    
    
    524,300
    
    
    
    $46.0 million
 
 ITEM 16F.
    
    CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
  
 ITEM 16G.
    
    CORPORATE GOVERNANCE
  
    
    that a majority of our board of directors must be comprised of independent
directors; and
    
    that we have a corporate governance and nominating committee that is composed
entirely of independent directors with a written charter addressing the committees
purpose and responsibilities;
   103




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PART III
 
 ITEM 17.
    
    FINANCIAL STATEMENTS
  
 ITEM 18.
    
    FINANCIAL STATEMENTS
  
 ITEM 19.
    
    EXHIBITS
 ExhibitNumber
    
    Document1.1
    
    
    Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated by
reference to Exhibit 3.2 from our F-1 registration statement (File No. 333-162213), as
amended, initially filed with the Commission on September 29, 2009)2.1
    
    
    Specimen American Depositary Receipt of the Registrant (incorporated by reference to Exhibit
4.1 from our F-1 registration statement (File No. 333-162213), as amended, initially filed
with the Commission on September 29, 2009)2.2
    
    
    Specimen Certificate for Ordinary Shares of the Registrant (incorporated by reference to
Exhibit 4.2 from our F-1 registration statement (File No. 333-162213), as amended, initially
filed with the Commission on September 29, 2009).2.3
    
    
    Deposit Agreement among the Registrant, the depositary and holder of the American Depositary
Receipts Registrant (incorporated by reference to Exhibit 4.2 from our S-8 registration
statement (File No. 333-164034) filed with the Commission on December 28, 2009)4.1
    
    
    Share Incentive Plan of the Registrant (incorporated by reference to Exhibit 10.1 from our F-1
registration statement (File No. 333-162213), as amended, initially filed with the Commission
on September 29, 2009).4.2
    
    
    Form of Indemnification Agreement with the Registrants directors (incorporated by reference
to Exhibit 10.2 from our F-1 registration statement (File No. 333-162213), as amended,
initially filed with the Commission on September 29, 2009).4.3
    
    
    Employment Agreement between the Registrant and Xin Zhou (incorporated by reference to Exhibit
10.3 from our F-1 registration statement (File No. 333-162213), as amended, initially filed
with the Commission on September 29, 2009).4.4
    
    
    Employment Agreement between the Registrant and Bin Laurence (incorporated by reference to
Exhibit 10.4 from our F-1 registration statement (File No. 333-162213), as amended, initially
filed with the Commission on September 29, 2009).4.5
    
    
    Employment Agreement between the Registrant and Zuyu Ding (incorporated by reference to
Exhibit 10.5 from our F-1 registration statement (File No. 333-162213), as amended, initially
filed with the Commission on September 29, 2009).4.6
    
    
    Employment Agreement between the Registrant and Jun Luo (incorporated by reference to Exhibit
10.6 from our F-1 registration statement (File No. 333-162213), as amended, initially filed
with the Commission on September 29, 2009).
  104




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ExhibitNumber
    
    Document4.7
    
    
    Employment Agreement between the Registrant and Yan Zhang (incorporated by reference to
Exhibit 10.7 from our F-1 registration statement (File No. 333-162213), as amended, initially
filed with the Commission on September 29, 2009).4.8
    
    
    Employment Agreement between the Registrant and Zhongmin Jin (incorporated by reference to
Exhibit 10.8 from our F-1 registration statement (File No. 333-162213), as amended, initially
filed with the Commission on September 29, 2009).4.9
    
    
    Master Transaction Agreement, dated July 27, 2009, between the Registrant and E-House (China)
Holdings Limited (incorporated by reference to Exhibit 10.9 from our F-1 registration
statement (File No. 333-162213), as amended, initially filed with the Commission on September
29, 2009).4.10
    
    
    Offshore Transitional Services Agreement, dated July 27, 2009, between the Registrant and
E-House (China) Holdings Limited (incorporated by reference to Exhibit 10.10 from our F-1
registration statement (File No. 333-162213), as amended, initially filed with the Commission
on September 29, 2009).4.11
    
    
    English translation of Onshore Transitional Services Agreement, dated July 27, 2009, between
Shanghai CRIC Information Technology Co., Ltd. and Shanghai Real Estate Sales (Group) Co.,
Ltd. (incorporated by reference to Exhibit 10.11 from our F-1 registration statement (File No.
333-162213), as amended, initially filed with the Commission on September 29, 2009).4.12
    
    
    Non-Competition Agreement, dated July 27, 2009, between the Registrant and E-House (China)
Holdings Limited. (incorporated by reference to Exhibit 10.12 from our F-1 registration
statement (File No. 333-162213), as amended, initially filed with the Commission on September
29, 2009).4.13
    
    
    English translation of Consulting and Services Agreement, dated June 30, 2009, between
Shanghai CRIC Information Technology Co., Ltd. and Shanghai Real Estate Sales (Group) Co.,
Ltd. (incorporated by reference to Exhibit 10.13 from our F-1 registration statement (File
No. 333-162213), as amended, initially filed with the Commission on September 29, 2009).4.14
    
    
    English translation of Onshore Cooperation Agreement, dated August 31, 2009, among Shanghai
Real Estate Sales (Group) Co., Ltd., Shanghai CRIC Information Technology Co., Ltd. and
Shanghai Tian Zhuo Advertising Co., Ltd. (incorporated by reference to Exhibit 10.14 from our
F-1 registration statement (File No. 333-162213), as amended, initially filed with the
Commission on September 29, 2009).4.15
    
    
    English translation of Equity Pledge Agreement, dated July 20, 2009, between Shanghai CRIC
Information Technology Co., Ltd., Shanghai Tian Zhuo Advertising Co., Ltd., Xin Zhou and
Xudong Zhu. (incorporated by reference to Exhibit 10.15 from our F-1 registration statement
(File No. 333-162213), as amended, initially filed with the Commission on September 29, 2009).4.16
    
    
    English translation of Exclusive Call Option Agreement, dated July 20, 2009, between Shanghai
CRIC Information Technology Co., Ltd., Shanghai Tian Zhuo Advertising Co., Ltd., Xin Zhou and
Xudong Zhu. (incorporated by reference to Exhibit 10.16 from our F-1 registration statement
(File No. 333-162213), as amended, initially filed with the Commission on September 29, 2009).4.17
    
    
    English translation of Loan Agreement, dated April 1, 2008, between Shanghai CRIC Information
Technology Co., Ltd. and Xin Zhou. (incorporated by reference to Exhibit 10.17 from our F-1
registration statement (File No. 333-162213), as amended, initially filed with the Commission
on September 29, 2009).
  105




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ExhibitNumber
    
    Document4.18
    
    
    English translation of Loan Agreement, dated September 8, 2008, between Shanghai CRIC
Information Technology Co., Ltd. and Xin Zhou. (incorporated by reference to Exhibit 10.18
from our F-1 registration statement (File No. 333-162213), as amended, initially filed with
the Commission on September 29, 2009).4.19
    
    
    English translation of Amended and Restated Loan Agreement, dated July 20, 2009, between
Shanghai CRIC Information Technology Co., Ltd. and Xin Zhou. (incorporated by reference to
Exhibit 10.19 from our F-1 registration statement (File No. 333-162213), as amended, initially
filed with the Commission on September 29, 2009).4.20
    
    
    English translation of Loan Agreement, dated July 20, 2009, between Shanghai CRIC Information
Technology Co., Ltd., Xin Zhou and Xudong Zhu. (incorporated by reference to Exhibit 10.20
from our F-1 registration statement (File No. 333-162213), as amended, initially filed with
the Commission on September 29, 2009).4.21
    
    
    English translation of Loan Agreement, dated April 1, 2008, between Shanghai Tian Zhuo
Advertising Co., Ltd. and Xin Zhou. (incorporated by reference to Exhibit 10.21 from our F-1
registration statement (File No. 333-162213), as amended, initially filed with the Commission
on September 29, 2009).4.22
    
    
    English translation of Loan Agreement, dated September 8, 2008, between Shanghai Tian Zhuo
Advertising Co., Ltd. and Xin Zhou. (incorporated by reference to Exhibit 10.22 from our F-1
registration statement (File No. 333-162213), as amended, initially filed with the Commission
on September 29, 2009).4.23
    
    
    English translation of Shareholder Voting Rights Proxy Agreement, dated July 20, 2009, between
Shanghai CRIC Information Technology Co., Ltd., Shanghai Tian Zhuo Advertising Co., Ltd., Xin
Zhou and Xudong Zhu. (incorporated by reference to Exhibit 10.23 from our F-1 registration
statement (File No. 333-162213), as amended, initially filed with the Commission on September
29, 2009).4.24
    
    
    English translation of Consulting and Service Agreement, dated April 1, 2008, between Shanghai
CRIC Information Technology Co., Ltd. and Shanghai Tian Zhuo Advertising Co., Ltd.
(incorporated by reference to Exhibit 10.24 from our F-1 registration statement (File No.
333-162213), as amended, initially filed with the Commission on September 29, 2009).4.25
    
    
    English translation of Exclusive Call Option Agreement dated, September 29, 2009, between
Shanghai SINA Leju Information Technology Co., Ltd., Beijing Yisheng Leju Information Services
Co., Ltd., Xudong Zhu and Jun Luo. (incorporated by reference to Exhibit 10.25 from our F-1
registration statement (File No. 333-162213), as amended, initially filed with the Commission
on September 29, 2009).4.26
    
    
    English translation of Loan Agreement, dated September 29, 2009, between Shanghai SINA Leju
Information Technology Co., Ltd., Xudong Zhu and Jun Luo. (incorporated by reference to
Exhibit 10.26 from our F-1 registration statement (File No. 333-162213), as amended, initially
filed with the Commission on September 29, 2009).4.27
    
    
    English translation of Shareholder Voting Rights Proxy Agreement, dated September 29, 2009,
between Shanghai SINA Leju Information Technology Co., Ltd., Beijing Yisheng Leju Information
Services Co., Ltd., Xudong Zhu and Jun Luo. (incorporated by reference to Exhibit 10.27 from
our F-1 registration statement (File No. 333-162213), as amended, initially filed with the
Commission on September 29, 2009).4.28
    
    
    English translation of Equity Pledge Agreement, dated September 29, 2009, between Shanghai
SINA Leju Information Technology Co., Ltd., Beijing Yisheng Leju Information Services Co.,
Ltd., Xudong Zhu and Jun Luo. (incorporated by reference to Exhibit 10.28 from our F-1
registration statement (File No. 333-162213), as amended, initially filed with the Commission
on September 29, 2009).
  106




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ExhibitNumber
    
    Document4.29
    
    
    English translation of Exclusive Technical Support Agreement, dated May 8, 2008, between
Shanghai SINA Leju Information Technology Co., Ltd. and Beijing Yisheng Leju Information
Services Co., Ltd. (incorporated by reference to Exhibit 10.29 from our F-1 registration
statement (File No. 333-162213), as amended, initially filed with the Commission on September
29, 2009).4.30
    
    
    English translation of Real Estate Market Information System and Project Consulting Services
Strategic Cooperation Agreement, dated December 2008, between Evergrande Real Estate Group and
Shanghai CRIC Information Technology Co., Ltd. (incorporated by reference to Exhibit 4.30 from
our annual report on Form 20-F (File No. 001-34479), filed with the Commission on April 23,
2010).4.31
    
    
    English translation of Service Agreement, dated August 2009, between with Shanghai Jinluodian
Development Co., Ltd. and Shanghai CRIC Information Technology Co., Ltd. (incorporated by
reference to Exhibit 4.32 from our annual report on Form 20-F (File No. 001-34479), filed with
the Commission on April 23, 2010).4.32
    
    
    Share Purchase Agreement, dated July 23, 2009, between the Registrant and SINA Corporation.
(incorporated by reference to Exhibit 10.33 from our F-1 registration statement (File No.
333-162213), as amended, initially filed with the Commission on September 29, 2009).4.33
    
    
    Amendment Agreement to the Share Purchase Agreement, dated September 29, 2009, between the
Registrant and SINA Corporation. (incorporated by reference to Exhibit 10.34 from our F-1
registration statement (File No. 333-162213), as amended, initially filed with the Commission
on September 29, 2009).4.34
    
    
    Shareholders Agreement, dated October 21, 2009, by and among the Registrant, E-House (China)
Holdings Limited and SINA Corporation (incorporated by reference to Exhibit 4.35 from our
annual report on Form 20-F (File No. 001-34479), filed with the Commission on April 23, 2010).4.35
    
    
    Registration Rights Agreement, dated October 21, 2009, by and among the Registrant, E-House
(China) Holdings Limited and SINA Corporation (incorporated by reference to Exhibit 4.36 from
our annual report on Form 20-F (File No. 001-34479), filed with the Commission on April 23,
2010).4.36
    
    
    English translation of Amended and Restated Advertising Inventory Sale Agency Agreement, dated
August 31, 2009, between SINA Corporation and COHT Technology Corporation. (incorporated by
reference to Exhibit 10.37 from our F-1 registration statement (File No. 333-162213), as
amended, initially filed with the Commission on September 29, 2009).4.37
    
    
    Domain Name and Content License Agreement, dated September 2009, between Beijing SINA Internet
Information Service Co., Ltd. and Beijing Yisheng Leju Information Services Co., Ltd.
(incorporated by reference to Exhibit 10.38 from our F-1 registration statement (File No.
333-162213), as amended, initially filed with the Commission on September 29, 2009).4.38
    
    
    Trademark License Agreement, dated September 2009, between Beijing SINA Internet Information
Service Co., Ltd. and Beijing Yisheng Leju Information Services Co., Ltd. (incorporated by
reference to Exhibit 10.39 from our F-1 registration statement (File No. 333-162213), as
amended, initially filed with the Commission on September 29, 2009).4.39
    
    
    Software License and Support Services Agreement, dated September 2009, between SINA.com
Technology (China) Co. Ltd. and Shanghai SINA Leju Information Technology Co., Ltd.
(incorporated by reference to Exhibit 10.40 from our F-1 registration statement (File No.
333-162213), as amended, initially filed with the Commission on September 29, 2009).
  107




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ExhibitNumber
    
    Document4.40
    *
    
    Internet Advertising Placement Contract, January 1, 2010, between Information Services Co.,
Ltd. and Beijing Jiahua Hengshun Media Advertising Co., Ltd.8.1
    *
    
    Subsidiaries of the Registrant11.1
    
    
    Code of Business Conduct and Ethics of the Registrant. (incorporated by reference to Exhibit
99.1 from our F-1 registration statement (File No. 333-162213), as amended, initially filed
with the Commission on September 29, 2009).12.1
    *
    
    Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
    *
    
    Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1
    *
    
    Chief Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2
    *
    
    Chief Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200215.1
    *
    
    Consent of Deloitte Touche Tohmatsu CPA Ltd.15.2
    *
    
    Consent of Fangda Partners
 *
    
    Filed with this annual report on Form 20-F.
  108




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SIGNATURES
  China Real Estate Information CorporationBy:

/s/ Xin ZhouName:
    Xin ZhouTitle:
    Co-Chairman of the Board of DirectorsChief Executive Officer   109




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##### 



China Real Estate Information Corporation
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Reports of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2009 and 2010
    
    
    F-4Consolidated Statements of Operations for the Years Ended December 31, 2008, 2009 and 2010
    
    
    F-5Consolidated Statements of Changes in Equity and Comprehensive Income for the Years Ended
December 31, 2008, 2009, and 2010
    
    
    F-6Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2009 and 2010
    
    
    F-7Notes to Consolidated Financial Statements for the Years Ended December 31, 2008, 2009 and 2010
    
    
    F-9




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
     Internal ControlIntegrated Framework
  
  F-2




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  Internal Control  Integrated Framework
    Internal Control
 Integrated Framework
   
  F-3




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##### Table of Contents



China Real Estate Information Corporation


Consolidated Balance Sheets
(In U.S. dollar except for share data)
 December 31,2009
    
    
    2010$
    
    
    $AssetsCurrent assets:Cash and cash equivalents
    
    
    311,066,566
    
    
    
    340,719,732Unbilled accounts receivable, net of
allowance for doubtful accounts of
$5,625,089 and $4,985,475 at December
31, 2009 and 2010, respectively
    
    
    22,739,129
    
    
    
    51,175,432Accounts receivable, net of allowance
for doubtful accounts of nil and nil at
December 31, 2009 and 2010, respectively
    
    
    5,690,968
    
    
    
    9,796,367Advance payment for properties
    
    
    8,108,299
    
    
    
    Prepaid expenses and other current assets
    
    
    6,990,396
    
    
    
    22,231,239Amounts due from related parties
    
    
    2,460,572
    
    
    
    5,079,850Total current assets
    
    
    357,055,930
    
    
    
    429,002,620Property and equipment, net
    
    
    7,422,583
    
    
    
    11,177,160Intangible assets, net
    
    
    201,138,891
    
    
    
    182,622,246Goodwill
    
    
    449,902,711
    
    
    
    450,299,447Investment in affiliates
    
    
    
    
    
    
    4,444,136Other non-current assets
    
    
    4,570,964
    
    
    
    6,377,153Total assets
    
    
    1,020,091,079
    
    
    
    1,083,922,762Liabilities and EquityCurrent liabilities:Accounts payable (including accounts
payable of the consolidated VIEs
without recourse to CRIC of $2,005,993
and $805,772 as of December 31, 2009 and
2010, respectively)
    
    
    2,288,650
    
    
    
    3,299,986Advance from customers (including
advance from customers of the
consolidated VIEs without recourse to
CRIC of $1,069,853 and $3,581,008 as of
December 31, 2009 and 2010,
respectively)
    
    
    2,855,165
    
    
    
    6,455,298Accrued payroll and welfare expenses
(including accrued payroll and welfare
expenses of the consolidated VIEs
without recourse to CRIC of $1,535,879
and $5,998,335 as of December 31, 2009
and 2010, respectively)
    
    
    3,873,160
    
    
    
    9,881,731Income tax payable (including income tax
payable of the consolidated VIEs without
recourse to CRIC of $1,658,316 and
$3,824,260 as of December 31, 2009 and
2010, respectively)
    
    
    9,270,321
    
    
    
    16,935,062Other tax payable (including other tax
payable of the consolidated VIEs without
recourse to CRIC of $1,549,522 and
$2,965,717 as of December 31, 2009 and
2010, respectively)
    
    
    3,085,419
    
    
    
    5,427,500Amounts due to related parties
(including amounts due to related
parties of the consolidated VIEs without
recourse to CRIC of $6,112,070 and
$2,029,595 as of December 31, 2009 and
2010, respectively)
    
    
    7,300,568
    
    
    
    2,784,714Other current liabilities (including
other current liabilities of the
consolidated VIEs without recourse to
CRIC of $3,561,007 and $3,147,480 as of
December 31, 2009 and 2010,
respectively)
    
    
    6,965,124
    
    
    
    7,731,235Total current liabilities
    
    
    35,638,407
    
    
    
    52,515,526Deferred tax liabilities, non-current
(including deferred tax liabilities,
non-current of the consolidated VIEs without
recourse to CRIC of $270,607 and $424,931 as
of December 31, 2009 and 2010, respectively)
    
    
    42,031,640
    
    
    
    39,969,421Total liabilities
    
    
    77,670,047
    
    
    
    92,484,947Commitments and contingencies (Note 15)Equity:Ordinary
shares ($0.0002 par value): 250,000,000 shares authorized,
142,922,222 and 143,749,405 shares
issued and outstanding as of December
31, 2009 and 2010, respectively
    
    
    28,584
    
    
    
    28,750Additional paid-in capital
    
    
    863,169,196
    
    
    
    882,428,759Retained earnings
    
    
    74,385,774
    
    
    
    97,556,895Accumulated other comprehensive income
    
    
    3,629,398
    
    
    
    8,402,643Subscription receivables
    
    
    
    
    
    
    (97,749
    )Total CRIC equity
    
    
    941,212,952
    
    
    
    988,319,298Non-controlling interest
    
    
    1,208,080
    
    
    
    3,118,517Total equity
    
    
    942,421,032
    
    
    
    991,437,815Total liabilities and equity
    
    
    1,020,091,079
    
    
    
    1,083,922,762
   F-4




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China Real Estate Information Corporation


Consolidated Statements of Operations
(In U.S. dollar except for share data)
 Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $RevenuesThird party revenues
    
    
    49,887,948
    
    
    
    87,384,680
    
    
    
    155,309,013Related party revenues
    
    
    160,582
    
    
    
    8,269,130
    
    
    
    18,845,451Total revenues
    
    
    50,048,530
    
    
    
    95,653,810
    
    
    
    174,154,464Cost of revenues
    
    
    (2,897,247
    )
    
    
    (12,810,162
    )
    
    
    (41,009,561
    )Selling, general and administrative expenses
    
    
    (19,819,873
    )
    
    
    (48,048,529
    )
    
    
    (109,088,983
    )Gain from settlement of pre-existing relationship
    
    
    
    
    
    
    2,100,832
    
    
    
    Income from operations
    
    
    27,331,410
    
    
    
    36,895,951
    
    
    
    24,055,920Other income (expense):Interest income
    
    
    420,517
    
    
    
    279,079
    
    
    
    1,726,580Other income (expense), net
    
    
    (1,341,165
    )
    
    
    2,725,032
    
    
    
    3,174,113Income before taxes and equity in affiliates
    
    
    26,410,762
    
    
    
    39,900,062
    
    
    
    28,956,613Income tax expense
    
    
    (4,721,015
    )
    
    
    (6,306,613
    )
    
    
    (2,791,497
    )Income before equity in affiliates
    
    
    21,689,747
    
    
    
    33,593,449
    
    
    
    26,165,116Income (loss) from equity in affiliates
    
    
    153,700
    
    
    
    22,015,607
    
    
    
    (276,385
    )Net income
    
    
    21,843,447
    
    
    
    55,609,056
    
    
    
    25,888,731Less: Net income (loss) attributable to
non-controlling interest
    
    
    (318,214
    )
    
    
    6,765
    
    
    
    (52,109
    )Net income attributable to CRIC shareholders
    
    
    22,161,661
    
    
    
    55,602,291
    
    
    
    25,940,840Earnings per share:Basic
    
    $
    0.31
    
    
    $
    0.64
    
    
    $
    0.18Diluted
    
    $
    0.31
    
    
    $
    0.63
    
    
    $
    0.18Shares used in computation:Basic
    
    
    71,522,222
    
    
    
    86,610,265
    
    
    
    143,288,987Diluted
    
    
    71,522,222
    
    
    
    88,264,301
    
    
    
    146,193,046
   F-5




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##### Table of Contents



China Real Estate Information Corporation


Consolidated Statements of Changes in Equity
and Comprehensive Income
(In U.S. dollar)
 Retained
    
    
    AccumulatedAdditional
    
    
    Earnings
    
    
    Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalOrdinary
    
    
    Paid-in
    
    
    (Accumulated
    
    
    Comprehensive
    
    
    Subscription
    
    
    Non-controlling
    
    
    Total
    
    
    ComprehensiveShares
    
    
    Capital
    
    
    Deficit)
    
    
    Income
    
    
    Receivables
    
    
    Interest
    
    
    Equity
    
    
    IncomeNumber
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance at January 1, 2008
    
    
    71,522,222
    
    
    
    14,304
    
    
    
    30,000,000
    
    
    
    (1,205,488
    )
    
    
    923,501
    
    
    
    (14,304
    )
    
    
    
    
    
    
    29,718,013Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,161,661
    
    
    
    
    
    
    
    
    
    
    
    (318,214
    )
    
    
    21,843,447
    
    
    
    21,843,447Capital contribution by
non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,173,582
    
    
    
    1,173,582
    
    
    
    Contribution from E-House
    
    
    
    
    
    
    
    
    
    
    2,591,770
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,591,770
    
    
    
    Cash contribution from E-House
    
    
    
    
    
    
    
    
    
    
    8,400,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,400,000
    
    
    
    Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,784,353
    
    
    
    
    
    
    
    
    
    
    
    2,784,353
    
    
    
    2,784,353Balance at December 31, 2008
    
    
    71,522,222
    
    
    
    14,304
    
    
    
    40,991,770
    
    
    
    20,956,173
    
    
    
    3,707,854
    
    
    
    (14,304
    )
    
    
    855,368
    
    
    
    66,511,165
    
    
    
    24,627,800Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    55,602,291
    
    
    
    
    
    
    
    
    
    
    
    6,765
    
    
    
    55,609,056
    
    
    
    55,609,056Capital contribution and
non-controlling interest recognized
in connection with business
acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,260,780
    
    
    
    1,260,780
    
    
    
    Collection of subscription receivables
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    10,000
    
    
    
    Distribution to E-House
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,001,304
    )
    
    
    
    
    
    
    4,304
    
    
    
    
    
    
    
    (997,000
    )
    
    
    Cash contribution from E-House
    
    
    
    
    
    
    
    
    
    
    2,499,977
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,499,977
    
    
    
    Replacement of COHT share options
    
    
    
    
    
    
    
    
    
    
    14,960,796
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,960,796
    
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    7,123,911
    
    
    
    (1,171,386
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,952,525
    
    
    
    Issuance of ordinary shares to
public, net of issuance cost
    
    
    20,700,000
    
    
    
    4,140
    
    
    
    224,700,460
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    224,704,600
    
    
    
    Issuance of ordinary shares in
connection with business acquisition
    
    
    47,666,667
    
    
    
    9,533
    
    
    
    571,990,471
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    572,000,004
    
    
    
    Issuance of ordinary shares in
exchange for a non-controlling
interest
    
    
    3,033,333
    
    
    
    607
    
    
    
    901,811
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (902,418
    )
    
    
    
    
    
    
    Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (78,456
    )
    
    
    
    
    
    
    (12,415
    )
    
    
    (90,871
    )
    
    
    (90,871
    )Balance at December 31, 2009
    
    
    142,922,222
    
    
    
    28,584
    
    
    
    863,169,196
    
    
    
    74,385,774
    
    
    
    3,629,398
    
    
    
    
    
    
    
    1,208,080
    
    
    
    942,421,032
    
    
    
    55,518,185Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,940,840
    
    
    
    
    
    
    
    
    
    
    
    (52,109
    )
    
    
    25,888,731
    
    
    
    25,888,731Capital contribution and
non-controlling interest recognized
in connection with business
acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,897,582
    
    
    
    1,897,582
    
    
    
    Distribution to E-House
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60,044
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60,044
    )
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    17,443,841
    
    
    
    (2,709,675
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,734,166
    
    
    
    Vesting of restricted shares
    
    
    75,000
    
    
    
    15
    
    
    
    262,485
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    262,500
    
    
    
    Exercise of share options
    
    
    752,183
    
    
    
    151
    
    
    
    1,553,237
    
    
    
    
    
    
    
    
    
    
    
    (97,749
    )
    
    
    
    
    
    
    1,455,639
    
    
    
    Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,773,245
    
    
    
    
    
    
    
    64,964
    
    
    
    4,838,209
    
    
    
    4,838,209Balance at December 31, 2010
    
    
    143,749,405
    
    
    
    28,750
    
    
    
    882,428,759
    
    
    
    97,556,895
    
    
    
    8,402,643
    
    
    
    (97,749
    )
    
    
    3,118,517
    
    
    
    991,437,815
    
    
    
    30,726,940
   F-6




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##### Table of Contents



China Real Estate Information Corporation


Consolidated Statements of Cash Flows
(In U.S. dollar)
 Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Operating activities:Net income
    
    
    21,843,447
    
    
    
    55,609,056
    
    
    
    25,888,731Adjustments to reconcile net income to net cash (used
in) provided by operating activities:Depreciation and amortization
    
    
    440,613
    
    
    
    6,744,120
    
    
    
    23,251,643Allowance for doubtful accounts
    
    
    
    
    
    
    4,722,707
    
    
    
    (71,896
    )Gain from settlement of pre-existing relationship
    
    
    
    
    
    
    (2,100,832
    )
    
    
    Income (loss) from equity in affiliates
    
    
    (153,700
    )
    
    
    (22,015,607
    )
    
    
    276,385Share-based compensation
    
    
    
    
    
    
    5,952,525
    
    
    
    14,734,166Gain from sales of properties held for sale
    
    
    
    
    
    
    (52,303
    )
    
    
    (1,063,322
    )Others
    
    
    
    
    
    
    136,145
    
    
    
    (262,631
    )Changes in operating assets and liabilitiesAccounts receivable
    
    
    (21,746,362
    )
    
    
    3,960,246
    
    
    
    (30,959,152
    )Amounts due from related parties
    
    
    2,690,338
    
    
    
    (2,432,415
    )
    
    
    (2,619,278
    )Prepaid expenses and other current assets
    
    
    (11,454,306
    )
    
    
    8,488,180
    
    
    
    (6,982,124
    )Accounts payable
    
    
    387,544
    
    
    
    1,664,048
    
    
    
    967,694Accrued payroll and welfare expenses
    
    
    718,993
    
    
    
    2,629,806
    
    
    
    6,125,547Income tax payable
    
    
    3,182,709
    
    
    
    5,262,213
    
    
    
    7,848,071Other tax payable
    
    
    642,958
    
    
    
    2,309,203
    
    
    
    2,421,341Amounts due to related parties
    
    
    
    
    
    
    (6,186,987
    )
    
    
    (4,399,846
    )Other current liabilities
    
    
    (512,730
    )
    
    
    (7,036,553
    )
    
    
    2,849,587Advance from customers
    
    
    839,354
    
    
    
    2,414,276
    
    
    
    3,537,472Deferred tax
    
    
    (124,654
    )
    
    
    (3,054,613
    )
    
    
    (5,547,289
    )Net cash provided by (used in) operating activities
    
    
    (3,245,796
    )
    
    
    57,013,215
    
    
    
    35,995,099Investing activities:Deposit for and purchase of property and equipment
and intangible assets
    
    
    (9,478,138
    )
    
    
    (2,378,033
    )
    
    
    (6,916,843
    )Purchase of subsidiaries, net of cash acquired
    
    
    (2,399,326
    )
    
    
    3,243,114
    
    
    
    563,211Investment in affiliates
    
    
    (2,500,000
    )
    
    
    
    
    
    
    (4,669,376
    )Proceeds from disposal of property and equipment
    
    
    18,645
    
    
    
    225,444
    
    
    
    36,580Deposit and proceeds for properties held for sale
    
    
    
    
    
    
    3,042,015
    
    
    
    4,719,440Collection of loans from related parties
    
    
    2,157,683
    
    
    
    
    
    
    
    Deposit for acquisition
    
    
    
    
    
    
    
    
    
    
    (4,529,880
    )Net cash provided by (used in) investing activities
    
    
    (12,201,136
    )
    
    
    4,132,540
    
    
    
    (10,796,868
    )Financing activities:Contribution from non-controlling interest
    
    
    270
    
    
    
    1,175,244
    
    
    
    249,246Proceeds of loans (repayment of loans) from related
parties
    
    
    5,696,838
    
    
    
    (5,616,633
    )
    
    
    Collection of subscription receivables
    
    
    
    
    
    
    10,000
    
    
    
    Advance from a related party
    
    
    
    
    
    
    1,050,000
    
    
    
    Proceeds from issuance of ordinary shares, net of
paid issuance costs of $23,548,949
    
    
    
    
    
    
    224,851,051
    
    
    
    Proceeds from exercise of options
    
    
    
    
    
    
    
    
    
    
    1,455,639Contribution from E-House
    
    
    8,400,000
    
    
    
    2,499,977
    
    
    
    Net cash provided by financing activities
    
    
    14,097,108
    
    
    
    223,969,639
    
    
    
    1,704,885Effect of exchange rate changes on cash and cash
equivalents
    
    
    729,589
    
    
    
    159,934
    
    
    
    2,750,050Net increase (decrease) in cash and cash equivalents
    
    
    (620,235
    )
    
    
    285,275,328
    
    
    
    29,653,166Cash and cash equivalents at the beginning of the year
    
    
    26,411,473
    
    
    
    25,791,238
    
    
    
    311,066,566
  F-7




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##### Table of Contents



Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Cash and cash equivalents at the end of the year
    
    
    25,791,238
    
    
    
    311,066,566
    
    
    
    340,719,732Supplemental disclosure of cash flow information:Income taxes paid
    
    
    1,446,702
    
    
    
    3,379,554
    
    
    
    5,742,205Non-cash investing and financing activities:Related party loans converted to equity
    
    
    8,400,000
    
    
    
    2,499,977
    
    
    
    Amount due to related party for restricted shares
transferred to equity
    
    
    
    
    
    
    
    
    
    
    (262,500
    )Related party receivable paid as dividend or
(payable recorded as a capital contribution)
    
    
    (2,591,770
    )
    
    
    997,000
    
    
    
    60,044Issuance of ordinary shares in connection with
business acquisition
    
    
    
    
    
    
    572,000,004
    
    
    
    Ordinary share issuance costs in payables
    
    
    
    
    
    
    146,451
    
    
    
    Replacement of share options due to acquisition
    
    
    
    
    
    
    14,960,796
    
    
    
    Non-controlling interest recognized in connection
with business acquisition
    
    
    
    
    
    
    85,536
    
    
    
    1,648,336
   F-8




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##### Table of Contents



China Real Estate Information CorporationNotes to Consolidated Financial Statements
For the Years Ended December 31, 2008, 2009 and 2010
(In U.S. dollar)
 1. Organization and Principal Activities
          Date of
    
    
    Place of
    
    
    Percentage ofincorporation
    
    
    incorporation
    
    
    OwnershipShanghai CRIC Information Technology Co., Ltd.
    
    3-Jul-06
    
    PRC
    
    
    100
    %Shanghai Dehu PR Consulting Co., Ltd.
    
    9-Feb-07
    
    PRC
    
    
    55
    %Shanghai Tian Zhuo Advertising Co., Ltd.
    
    27-Feb-08
    
    PRC
    
    VIEBeijing Yisheng Leju Information Services Co., Ltd.
    
    13-Feb-08
    
    PRC
    
    VIE
   F-9




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##### Table of Contents



2. Summary of Principal Accounting Policies
 (a) Basis of presentation
  (b) Basis of consolidation
       F-10




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##### Table of Contents



As of December 31,2009
    
    
    2010$
    
    
    $Cash and cash equivalents
    
    
    9,631,554
    
    
    
    12,133,157Unbilled accounts receivable, net of allowance for doubtful accounts
    
    
    3,803,925
    
    
    
    2,864,778Accounts receivable, net of allowance for doubtful accounts
    
    
    2,105,244
    
    
    
    784,813Prepaid expenses and other current assets
    
    
    2,675,884
    
    
    
    1,511,617Amounts due from related parties
    
    
    410,401
    
    
    
    195,639Total current assets
    
    
    18,627,008
    
    
    
    17,490,004Total noncurrent assets
    
    
    6,450,738
    
    
    
    6,562,186Total assets
    
    
    25,077,746
    
    
    
    24,052,190Accounts payable
    
    
    1,887,725
    
    
    
    319,812Accrued payroll and welfare expenses
    
    
    640,283
    
    
    
    611,029Income tax payable
    
    
    836,915
    
    
    
    1,156,467Other tax payable
    
    
    576,058
    
    
    
    412,247Other current liabilities
    
    
    736,553
    
    
    
    960,528Total current liabilities
    
    
    4,677,534
    
    
    
    3,460,083Deferred tax liabilities, non-current
    
    
    270,607
    
    
    
    202,955Total liabilities
    
    
    4,948,141
    
    
    
    3,663,038
 Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Total revenues
    
    
    1,659,801
    
    
    
    14,428,584
    
    
    
    10,394,582Net income (loss)
    
    
    (890,998
    )
    
    
    620,258
    
    
    
    37,030
   As of December 31,2009
    
    
    2010$
    
    
    $Cash and cash equivalents
    
    
    2,128,200
    
    
    
    41,914,203Unbilled accounts receivable, net of allowance for doubtful accounts
    
    
    13,814,540
    
    
    
    35,028,633Prepaid expenses and other current assets
    
    
    2,661,465
    
    
    
    10,192,141Amounts due from related parties
    
    
    9,465
    
    
    
    Total current assets
    
    
    18,613,670
    
    
    
    87,134,977Total noncurrent assets
    
    
    1,273,393
    
    
    
    5,402,561Total assets
    
    
    19,887,063
    
    
    
    92,537,538Accounts payable
    
    
    118,268
    
    
    
    485,960Advance from customers
    
    
    1,069,853
    
    
    
    3,581,008Accrued payroll and welfare expenses
    
    
    895,596
    
    
    
    5,387,306Income tax payable
    
    
    821,401
    
    
    
    2,667,793Other tax payable
    
    
    973,464
    
    
    
    2,553,470Amounts due to related parties
    
    
    6,112,070
    
    
    
    2,029,595Other current liability
    
    
    2,824,454
    
    
    
    2,186,952Total current liabilities
    
    
    12,815,106
    
    
    
    18,892,084Deferred tax liabilities, non-current
    
    
    
    
    
    
    221,976Total liabilities
    
    
    12,815,106
    
    
    
    19,114,060
  F-11




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##### Table of Contents



Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Total revenues
    
    
    
    
    
    
    13,813,076
    
    
    
    66,876,338Net income
    
    
    
    
    
    
    147,922
    
    
    
    1,025,534
  (c) Use of estimates
  (d) Fair value of financial instruments
       (e) Business combinations
  (f) Cash and cash equivalents
  (g) Unbilled accounts receivable
  (h) Advance payment for properties and properties held for sale
   F-12




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##### Table of Contents



(i) Investment in affiliates
  (j) Property and equipment, net
  Leasehold improvements
    
    Over the shorter of the lease term or
their estimated useful livesFurniture, fixtures and equipment
    
    5 yearsMotor vehicles
    
    5 years
  (k) Intangible assets, net
  (l) Internally developed software
  (m) Impairment of long-lived assets
  (n) Impairment of goodwill
   F-13




---



##### Table of Contents



(o) Income taxes
   (p) Share-based compensation
  (q) Revenue recognition
        F-14




---



##### Table of Contents



(r) Cost of revenue
  (s) Advertising expenses
  (t) Foreign currency translation
    (u) Government subsidies
  (v) Concentration of credit risk
    F-15




---



##### Table of Contents



2009
    
    
    2010$
    
    
    $Balance as of January 1,
    
    
    
    
    
    
    5,625,089Provisions for doubtful accounts
    
    
    4,722,707
    
    
    
    656,333Business acquisition
    
    
    2,440,358
    
    
    
    Recovery of provisions for doubtful accounts
    
    
    
    
    
    
    (728,229
    )Write offs
    
    
    (1,539,914
    )
    
    
    (728,707
    )Changes due to foreign exchange
    
    
    1,938
    
    
    
    160,989Balance as of December 31,
    
    
    5,625,089
    
    
    
    4,985,475
 (w) Earnings per share
    Years Ended December 31,2008
    
    
    2009
    
    
    2010Net income attributable to CRIC
    
    $
    22,161,661
    
    
    $
    55,602,291
    
    
    $
    25,940,840Weighted average ordinary shares outstanding  basic
    
    
    71,522,222
    
    
    
    86,610,265
    
    
    
    143,288,987Share options
    
    
    
    
    
    
    1,654,036
    
    
    
    2,904,059Weighted average number of ordinary shares
outstanding  diluted
    
    
    71,522,222
    
    
    
    88,264,301
    
    
    
    146,193,046Basic earnings per share
    
    $
    0.31
    
    
    $
    0.64
    
    
    $
    0.18Diluted earnings per share
    
    $
    0.31
    
    
    $
    0.63
    
    
    $
    0.18
 (x) Comprehensive income
  (y) Recently issued accounting pronouncements
    F-16




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##### Table of Contents



3. Investment in Affiliates
   Allocated
    
    
    AmortizationValue
    
    
    Period$Cash acquired
    
    
    1,700,000Intangible assets Advertising rights
    
    
    2,894,775
    
    
    10 years Customer contract backlog
    
    
    313,919
    
    
    6 monthsTotal
    
    
    4,908,694
  (Note 4).
  4. Acquisitions of Subsidiaries
   F-17




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##### Table of Contents



Amount$Fair value of Companys shares issued *
    
    
    572,000,004Replacement of COHTs share options (Note 10)
    
    
    14,960,796Consideration
    
    
    586,960,800Fair value of the Companys investment in COHT held before the business combination **
    
    
    27,078,000Total value to be allocated in purchase accounting
    
    
    614,038,800
 *
    
    The fair value of the 47,666,667 ordinary shares issued by the
Company was based on the IPO offering price of the Companys
American depositary shares (ADS).**
    
    As a result of the Company obtaining control over COHT, the
Companys previously held equity interest was remeasured to fair
value of $27,078,000, with the excess of fair value over the
carrying amount recognized as a gain of $21,453,221.  Allocated
    
    
    AmortizationValue
    
    
    Period$Total tangible assets acquired
    
    
    26,703,269Liabilities assumed
    
    
    (17,432,772
    )Intangible assets acquired: License agreements with SINA
    
    
    80,660,000
    
    
    10 years Real estate advertising agency agreement with SINA
    
    
    106,790,000
    
    
    10 years CRIC database license agreement
    
    
    8,300,000
    
    
    9 years Customer relationship
    
    
    5,580,000
    
    
    10 years Customer contract backlog
    
    
    110,000
    
    
    1 yearGoodwill
    
    
    444,885,665Deferred tax liabilities
    
    
    (41,557,362
    )614,038,800
     Allocated
    
    
    AmortizationValue
    
    
    Period$Cash
    
    
    1,265,772Other current assets
    
    
    1,463,529Liabilities assumed
    
    
    (4,390,507
    )Leasehold improvements
    
    
    2,077,479
    
    
    5-20 yearsPrepaid rent
    
    
    4,348,647
    
    
    20 yearsFavorable lease term
    
    
    2,428,110
    
    
    20 yearsTotal
    
    
    7,193,030
  F-18




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##### Table of Contents



Allocated
    
    
    AmortizationValue
    
    
    Period$Cash acquired
    
    
    1,759,969Intangible assetsCustomer advertising designing contracts
    
    
    81,438
    
    
    3 monthsNon-compete agreements
    
    
    191,424
    
    
    5 yearsGoodwill
    
    
    666,257Deferred tax liabilities
    
    
    (20,360
    )Total
    
    
    2,678,728
   Allocated
    
    
    AmortizationValue
    
    
    Period$Tangible assets acquired
    
    
    1,217,304Liabilities assumed
    
    
    (1,434,594
    )Intangible assetsNon-compete agreements
    
    
    1,420,688
    
    
    5 yearsGoodwill
    
    
    3,602,892Deferred tax liabilities
    
    
    (355,172
    )Total
    
    
    4,451,118
  5. Property and Equipment, Net
  As of December 31,2009
    
    
    2010$
    
    
    $Leasehold improvements
    
    
    4,020,790
    
    
    
    5,097,636Furniture, fixtures and equipment
    
    
    5,215,145
    
    
    
    9,868,278Motor vehicles
    
    
    353,492
    
    
    
    997,773Total
    
    
    9,589,427
    
    
    
    15,963,687Less: Accumulated depreciation
    
    
    (2,166,844
    )
    
    
    (4,786,527
    )Property and equipment, net
    
    
    7,422,583
    
    
    
    11,177,160
  6. Intangible Assets, Net
  As of December 31,2009
    
    
    2010$
    
    
    $License agreements with SINA
    
    
    80,660,000
    
    
    
    80,660,000Real estate advertising agency agreement with SINA
    
    
    106,790,000
    
    
    
    106,790,000CRIC database license agreement
    
    
    8,300,000
    
    
    
    8,300,000Favorable lease term
    
    
    2,428,110
    
    
    
    2,428,110Customer relationship
    
    
    5,788,603
    
    
    
    7,443,088Customer contract backlog
    
    
    110,000
    
    
    
    Non-compete agreements
    
    
    1,612,112
    
    
    
    2,074,417Computer software licenses
    
    
    1,207,744
    
    
    
    1,352,461206,896,569
    
    
    
    209,048,076Less: Accumulated amortizationLicense agreements with SINA
    
    
    (2,016,500
    )
    
    
    (10,082,500
    )Real estate advertising agency agreement with SINA
    
    
    (2,617,402
    )
    
    
    (13,087,008
    )CRIC database license agreement
    
    
    (244,118
    )
    
    
    (1,220,589
    )Favorable lease term
    
    
    (91,054
    )
    
    
    (212,460
    )Customer relationship
    
    
    (40,622
    )
    
    
    (541,013
    )Customer contract backlog
    
    
    (110,000
    )
    
    
    Non-compete agreements
    
    
    (388,634
    )
    
    
    (768,887
    )Computer software licenses
    
    
    (249,348
    )
    
    
    (513,373
    )(5,757,678
    )
    
    
    (26,425,830
    )Intangible assets subject to amortization, net
    
    
    201,138,891
    
    
    
    182,622,246
  F-19




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##### Table of Contents



7. Goodwill
  Real EstateInformationand
    
    
    Real EstateConsulting
    
    
    Online
    
    
    OtherServices
    
    
    Services
    
    
    Services
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $Balance as of January 1, 2009
    
    
    3,602,892
    
    
    
    
    
    
    
    666,257
    
    
    
    4,269,149Goodwill recognized upon acquisition
    
    
    747,897
    
    
    
    444,885,665
    
    
    
    
    
    
    
    445,633,562Balance as of December 31, 2009
    
    
    4,350,789
    
    
    
    444,885,665
    
    
    
    666,257
    
    
    
    449,902,711Goodwill recognized upon acquisition
    
    
    
    
    
    
    396,736
    
    
    
    
    
    
    
    396,736Balance as of December 31, 2010
    
    
    4,350,789
    
    
    
    445,282,401
    
    
    
    666,257
    
    
    
    450,299,447
 8. Other Income (Expense), net
 Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Government subsidies
    
    
    
    
    
    
    2,426,546
    
    
    
    2,143,869Reimbursement income from depository agent
    
    
    
    
    
    
    86,250
    
    
    
    215,441Gain from sales of properties held for sale
    
    
    
    
    
    
    52,303
    
    
    
    1,063,322Gain from bargain purchase
    
    
    
    
    
    
    
    
    
    
    392,524Foreign exchange gain (loss)
    
    
    (1,341,165
    )
    
    
    159,933
    
    
    
    (641,043
    )Total other income (expense), net
    
    
    (1,341,165
    )
    
    
    2,725,032
    
    
    
    3,174,113
  F-20




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##### Table of Contents



9. Income Tax
  Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Current TaxPRC
    
    
    3,976,671
    
    
    
    9,172,473
    
    
    
    5,879,728Other
    
    
    848,852
    
    
    
    2,655
    
    
    
    2,316,8834,825,523
    
    
    
    9,175,128
    
    
    
    8,196,611Deferred TaxPRC
    
    
    (104,508
    )
    
    
    (2,868,515
    )
    
    
    (5,405,114
    )Income tax expense
    
    
    4,721,015
    
    
    
    6,306,613
    
    
    
    2,791,497
 Cayman Islands and British Virgin Islands
  Hong Kong
  PRC
     Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $The aggregate dollar effect
    
    
    
    
    
    
    1,433,584
    
    
    
    8,006,036Per share effectbasic
    
    
    
    
    
    
    0.02
    
    
    
    0.06Per share effectdiluted
    
    
    
    
    
    
    0.02
    
    
    
    0.05
     F-21




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##### Table of Contents



As of December 31,2009
    
    
    2010$
    
    
    $Deferred tax assets:Accrued salary expenses
    
    
    782,048
    
    
    
    2,022,840Bad debt provision
    
    
    1,576,713
    
    
    
    1,204,525Net operating loss carryforwards
    
    
    808,325
    
    
    
    2,310,837Others
    
    
    44,553
    
    
    
    629,309Gross and net deferred tax assets
    
    
    3,211,639
    
    
    
    6,167,511Analysis as:Current
    
    
    3,046,040
    
    
    
    4,738,649Non-current
    
    
    165,599
    
    
    
    1,428,862Deferred tax liabilities:Amortization of intangible and other assets
    
    
    42,031,640
    
    
    
    39,969,421Total deferred tax liabilities
    
    
    42,031,640
    
    
    
    39,969,421Analysis as:Current
    
    
    
    
    
    
    Non-current
    
    
    42,031,640
    
    
    
    39,969,421
  Years Ended December 31,2008
    
    
    2009
    
    
    2010PRC income tax rate
    
    
    25.00
    %
    
    
    25.00
    %
    
    
    25.00
    %Expenses not deductible for tax purposes
    
    
    3.40
    %
    
    
    4.86
    %
    
    
    13.52
    %Effect of tax preference
    
    
    (9.04
    )%
    
    
    (12.79
    )%
    
    
    (12.84
    )%Effect of different tax rate of subsidiary operations in other jurisdiction
    
    
    (1.59
    )%
    
    
    (0.53
    )%
    
    
    (1.48
    )%Tax refund
    
    
    
    
    
    
    
    
    
    
    (14.80
    )%Other
    
    
    
    
    
    
    (0.73
    )%
    
    
    0.24
    %17.77
    %
    
    
    15.81
    %
    
    
    9.64
    %
   10. Share-Based Compensation
 E-House Holdings Share Incentive Plan (the E-House Plan)
  The Companys Share Incentive Plan (the CRIC Plan)
   F-22




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##### Table of Contents



Share Options:
   2009Average risk-free rate of return
    
    
    3.22
    %Contractual life of option
    
    10 yearsAverage estimated volatility rate
    
    
    71.79
    %Average dividend yield
    
    
    0.00
    %
       2009Average risk-free rate of return
    
    
    2.47
    %Contractual life of option
    
    5.2 yearsAverage estimated volatility rate
    
    
    63.18
    %Average dividend yield
    
    
    0.00
    %
   F-23




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##### Table of Contents



WeightedWeighted
    
    
    Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicNumber of
    
    
    Exercise
    
    
    Contractual
    
    
    Value ofOptions
    
    
    Price
    
    
    Term
    
    
    Options$
    
    
    
    
    
    $Outstanding, as of January 1, 2010
    
    
    11,342,000
    
    
    
    3.16Exercised
    
    
    (752,183
    )
    
    
    2.07Forfeited
    
    
    (153,788
    )
    
    
    3.06Modified
    
    
    Cancelled
    
    
    Outstanding, as of December 31, 2010
    
    
    10,436,029
    
    
    
    3.24
    
    
    6.94 years
    
    
    66,324,196Vested and expected to vest as of
December 31, 2010
    
    
    10,170,559
    
    
    
    3.24
    
    
    6.94 years
    
    
    64,706,092Exercisable as of December 31, 2010
    
    
    3,176,323
    
    
    
    2.82
    
    
    6.38 years
    
    
    21,533,694
   Restricted Shares:
  WeightedNo. of
    
    
    AverageRestricted
    
    
    Grant-DateShares
    
    
    Fair ValueUnvested as of January 1, 2010
    
    
    300,000
    
    
    
    2.59Granted
    
    
    Vested
    
    
    (75,000
    )
    
    
    2.59Forfeited
    
    
    Unvested as of December 31, 2010
    
    
    225,000
    
    
    
    2.59
    11. Employee Benefit Plans
  12. Distribution of Profits
    13. Segment Information
   F-24




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##### Table of Contents



Real EstateInformationand
    
    
    Real EstateConsulting
    
    
    Online
    
    
    Other2010
    
    Services
    
    
    Services
    
    
    Services
    
    
    Non-Allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues from external
customers
    
    
    87,567,438
    
    
    
    66,855,128
    
    
    
    19,731,898
    
    
    
    
    
    
    
    174,154,464Cost of revenues
    
    
    (3,016,516
    )
    
    
    (26,361,391
    )
    
    
    (11,631,654
    )
    
    
    
    
    
    
    (41,009,561
    )Selling, general and
administrative expenses
    
    
    (35,270,399
    )
    
    
    (54,741,152
    )
    
    
    (8,218,179
    )
    
    
    (10,859,253
    )
    
    
    (109,088,983
    )Income (loss) from
operations
    
    
    49,280,523
    
    
    
    (14,247,415
    )
    
    
    (117,935
    )
    
    
    (10,859,253
    )
    
    
    24,055,920Interest income
    
    
    1,156,337
    
    
    
    286,154
    
    
    
    109,521
    
    
    
    174,568
    
    
    
    1,726,580Other income (loss), net
    
    
    2,360,398
    
    
    
    (22,831
    )
    
    
    733,717
    
    
    
    102,829
    
    
    
    3,174,113Income (loss) before
taxes and equity in
affiliates
    
    
    52,797,258
    
    
    
    (13,984,092
    )
    
    
    725,303
    
    
    
    (10,581,856
    )
    
    
    28,956,613Income tax benefit
(expense)
    
    
    (2,911,786
    )
    
    
    455,815
    
    
    
    (335,526
    )
    
    
    
    
    
    
    (2,791,497
    )Income (loss) before
equity in affiliates
    
    
    49,885,472
    
    
    
    (13,528,277
    )
    
    
    389,777
    
    
    
    (10,581,856
    )
    
    
    26,165,116Income from equity in
affiliates
    
    
    (271,300
    )
    
    
    (5,085
    )
    
    
    
    
    
    
    
    
    
    
    (276,385
    )Net income (loss)
    
    
    49,614,172
    
    
    
    (13,533,362
    )
    
    
    389,777
    
    
    
    (10,581,856
    )
    
    
    25,888,731
 Real EstateInformationand
    
    
    Real EstateConsulting
    
    
    Online
    
    
    Other2009
    
    Services
    
    
    Services
    
    
    Services
    
    
    Non-Allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues from
external customers
    
    
    68,045,340
    
    
    
    13,829,937
    
    
    
    13,778,533
    
    
    
    
    
    
    
    95,653,810Cost of revenues
    
    
    (1,865,697
    )
    
    
    (4,930,280
    )
    
    
    (6,014,185
    )
    
    
    
    
    
    
    (12,810,162
    )Selling, general
and administrative
expenses
    
    
    (22,723,019
    )
    
    
    (11,359,944
    )
    
    
    (5,690,497
    )
    
    
    (8,275,069
    )
    
    
    (48,048,529
    )Gain from
settlement of
pre-existing
relationship
    
    
    2,100,832
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,100,832Income (loss) from
operations
    
    
    45,557,456
    
    
    
    (2,460,287
    )
    
    
    2,073,851
    
    
    
    (8,275,069
    )
    
    
    36,895,951Interest income
    
    
    166,521
    
    
    
    23,722
    
    
    
    27,635
    
    
    
    61,201
    
    
    
    279,079Other income, net
    
    
    2,481,451
    
    
    
    5,814
    
    
    
    
    
    
    
    237,767
    
    
    
    2,725,032Income (loss)
before taxes and
equity in
affiliates
    
    
    48,205,428
    
    
    
    (2,430,751
    )
    
    
    2,101,486
    
    
    
    (7,976,101
    )
    
    
    39,900,062Income tax benefit
(expense)
    
    
    (6,710,032
    )
    
    
    957,085
    
    
    
    (553,666
    )
    
    
    
    
    
    
    (6,306,613
    )Income (loss)
before equity in
affiliates
    
    
    41,495,396
    
    
    
    (1,473,666
    )
    
    
    1,547,820
    
    
    
    (7,976,101
    )
    
    
    33,593,449Income from equity
in affiliates
    
    
    
    
    
    
    22,015,607
    
    
    
    
    
    
    
    
    
    
    
    22,015,607Net income (loss)
    
    
    41,495,396
    
    
    
    20,541,941
    
    
    
    1,547,820
    
    
    
    (7,976,101
    )
    
    
    55,609,056
  F-25




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##### Table of Contents



Real EstateInformationand Consulting
    
    
    Other2008
    
    Services
    
    
    Services
    
    
    Non-Allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $Revenues from external customers
    
    
    49,116,061
    
    
    
    932,469
    
    
    
    
    
    
    
    50,048,530Cost of revenues
    
    
    (2,855,398
    )
    
    
    (41,849
    )
    
    
    
    
    
    
    (2,897,247
    )Selling, general and
administrative expenses
    
    
    (13,776,504
    )
    
    
    (1,865,669
    )
    
    
    (4,177,700
    )
    
    
    (19,819,873
    )Income (loss) from operations
    
    
    32,484,159
    
    
    
    (975,049
    )
    
    
    (4,177,700
    )
    
    
    27,331,410Interest income
    
    
    415,512
    
    
    
    3,779
    
    
    
    1,226
    
    
    
    420,517Foreign exchange loss
    
    
    (1,323,858
    )
    
    
    
    
    
    
    (17,307
    )
    
    
    (1,341,165
    )Income (loss) before taxes and
equity in affiliates
    
    
    31,575,813
    
    
    
    (971,270
    )
    
    
    (4,193,781
    )
    
    
    26,410,762Income tax benefit (expense)
    
    
    (4,917,503
    )
    
    
    196,488
    
    
    
    
    
    
    
    (4,721,015
    )Income (loss) before equity in
affiliates
    
    
    26,658,310
    
    
    
    (774,782
    )
    
    
    (4,193,781
    )
    
    
    21,689,747Income from equity in affiliates
    
    
    
    
    
    
    
    
    
    
    153,700
    
    
    
    153,700Net income (loss)
    
    
    26,658,310
    
    
    
    (774,782
    )
    
    
    (4,040,081
    )
    
    
    21,843,447
 Geographic
  Major customers
  Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Customer A
    
    
    28,321,400
    
    
    
    28,374,431
    
    
    
    23,715,171Customer B
    
    
    *
    
    
    
    10,846,980
    
    
    
    *Customer C
    
    
    7,788,385
    
    
    
    *
    
    
    
    *Customer D
    
    
    5,144,560
    
    
    
    *
    
    
    
    *
 *
    
    indicates the revenue from these customers was less than 10% in the stated periods.  As of December 31,2009
    
    
    2010$
    
    
    $Customer B
    
    
    6,150,942
    
    
    
    *Customer E
    
    
    4,210,564
    
    
    
    12,701,252Customer F
    
    
    5,179,182
    
    
    
    *Customer G
    
    
    3,368,519
    
    
    
    *Customer I
    
    
    *
    
    
    
    7,337,703
 *
    
    indicates the accounts receivable from the customer was less than 10% as of the stated year end.  F-26




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##### Table of Contents



14. Related Party Balances and Transactions
  Company Name
    
    Relationship with the GroupE-House
    
    Under common control of E-House HoldingsE-House China Real Estate
Investment Fund I, L.P.
(the Fund)
    
    Partially owned by Mr. Xin Zhou, co-chairman
of CRIC and executive chairman of E-HouseSINA
    
    Mr. Charles Chao, co-chairman of CRIC and
director and chief executive officer of SINA
(related party since October 16, 2009)
    Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Corporate selling, general and administrative expenses
allocated from E-House (Note 1)
    
    
    3,516,284
    
    
    
    2,477,446
    
    
    
    Corporate service provided by E-House under
onshore/offshore transitional service agreement (Note
1)
    
    
    
    
    
    
    583,650
    
    
    
    1,522,497Online advertising agency fee paid to SINA
    
    
    
    
    
    
    852,153
    
    
    
    2,545,106Revenues:Information and consulting services provided to E-House
    
    
    
    
    
    
    6,338,045
    
    
    
    16,157,318Online advertising services provided to E-House
    
    
    
    
    
    
    
    
    
    
    50,457Advertising and promotional events services provided
to E-House
    
    
    169,928
    
    
    
    2,378,823
    
    
    
    1,828,127Other services provided to SINA
    
    
    
    
    
    
    
    
    
    
    1,824,458Related party revenues  subtotal*
    
    
    169,928
    
    
    
    8,716,868
    
    
    
    19,860,360
 *
    
    related party revenues include sales related taxes of $9,346, $447,738 and
$1,014,909 for the years ended December 31, 2008, 2009 and 2010, respectively.     F-27




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##### Table of Contents



As of December 31,2009
    
    
    2010$
    
    
    $E-House
    
    
    147,962
    
    
    
    25,294SINA
    
    
    6,102,606
    
    
    
    1,971,920E-House management
    
    
    1,050,000
    
    
    
    787,500Total
    
    
    7,300,568
    
    
    
    2,784,714
   Years Ended December 31,2009
    
    
    2010$
    
    
    $Balance at January 1
    
    
    
    
    
    
    1,435,415Collection of loans granted to E-House
    
    
    
    
    
    
    Loans received from E-House
    
    
    (2,499,977
    )
    
    
    Corporate expenses allocated from E-House
    
    
    (2,477,446
    )
    
    
    Group revenues, net of expenses, collected by E-House
    
    
    3,474,446
    
    
    
    Related party balance waivers
    
    
    1,502,977
    
    
    
    60,044Services provided to E-House
    
    
    8,716,868
    
    
    
    18,035,902Consulting services fee collected by E-House on behalf of CRIC
    
    
    1,148,711
    
    
    
    Transitional services fee charged from E-House
    
    
    (583,650
    )
    
    
    (1,522,497
    )Payments received for services
    
    
    (7,846,514
    )
    
    
    (12,929,014
    )Balance at December 31
    
    
    1,435,415
    
    
    
    5,079,850
 15. Commitments and contingencies
 a) Operating lease commitments
   Year Ending December 31
    
    $2011
    
    
    4,689,1502012
    
    
    2,626,2162013
    
    
    1,579,5942014
    
    
    195,5932015
    
    
    105,118Total
    
    
    9,195,671
 b) Baidus web channels commitments
   Year Ending December 31
    
    $2011
    
    
    7,549,8002012
    
    
    7,549,8002013
    
    
    7,549,800Total
    
    
    22,649,400
  F-28




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##### Table of Contents



c) Contingencies
  16. Subsequent Events
     F-29