##### Table of Contents



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, 2008.
 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
 Commission file number: 001-33616
 E-HOUSE (CHINA) HOLDINGS LIMITED
 
 Securities registered or to be registered pursuant to Section 12(b) of the Act:
 Title of each class
    
    Name of exchange on which registeredAmerican Depositary Shares, each representing 
one ordinary share, par value $0.001 per share
    
    New York Stock Exchange
 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)
 79,769,481 ordinary shares, par
value $0.001 per share, as of December 31, 2008.
 Yes o  No þ
 Yes o No þ
 þ o
 o o
  o þ o
  US GAAP þ
    
    International Financial Reporting Standards as issued
by the International Accounting Standards Board o
    
    Other o
  o o
 o þ
  Yes o No o




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##### 



INTRODUCTIONPART I
    
    
    1Item 1 Identity of Directors, Senior Management and Advisers
    
    
    2Item 2 Offer Statistics and Expected Timetable
    
    
    2Item 3 Key Information
    
    
    2Item 4 Information on the Company
    
    
    19Item 4A Unresolved Staff Comments
    
    
    33Item 5 Operating and Financial Review and Prospects
    
    
    33Item 6 Directors, Senior Management and Employees
    
    
    48Item 7 Major Shareholders and Related Party Transactions
    
    
    59Item 8 Financial Information
    
    
    61Item 9 The Offer and Listing
    
    
    62Item 10 Additional Information
    
    
    63Item 11 Quantitative and Qualitative Disclosures About Market Risk
    
    
    69Item 12 Description of Securities Other than Equity Securities
    
    
    69PART IIItem 13 Defaults, Dividend Arrearages and Delinquencies
    
    
    70Item 14 Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    70Item 15 Controls and Procedures
    
    
    71Item 16A Audit Committee Financial Expert
    
    
    71Item 16B Code of Ethics
    
    
    7172Item 16C Principal Accountant Fees and Services
    
    
    71Item 16D Exemptions from the Listing Standards for Audit Committees
    
    
    72Item 16E Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    72Item 16F Change in Registrants Certifying Accountant
    
    
    72Item 16G Corporate Governance
    
    
    72PART IIIItem 17 Financial Statements
    
    
    73Item 18 Financial Statements
    
    
    73Item 19 Exhibits
    
    
    73EX-4.2 CRIC Share Incentive PlanEX-4.5 Equity Pledge AgreementEX-4.6 Equity Transfer Call AgreementEX-4.7 Loan AgreementEX-4.8 Loan AgreementEX-4.9 Loan AgreementEX-4.10 Loan AgreementEX-4.11 Loan AgreementEX-4.12 Voting Rights Proxy AgreementEX-4.13 Service AgreementEX-8.1 Subsidiaries of the RegistrantEX-12.1 Certification of CEOEX-12.2 Certification of CFOEX-13.1 Certification of CEOEX-13.2 Certification of CFOEX-23.1 Consent of Deloitte Touche Tohmatsu CPA Ltd.EX-23.2 Consent of Jin Mao PRC LawyersEX-23.3 Consent of Fangda Partners




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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;
 
    
    CRIC system refers to China Real Estate Information Circle, our proprietary
real estate information database and analysis system;
 
    
    shares or ordinary shares refers to our ordinary shares, par value $0.001
per share, and preferred shares refers to our series A convertible and
redeemable preferred shares, all of which were converted into our ordinary
 shares upon the completion of our initial public offering on August 13, 2007;
 
    
    ADSs refers to our American depositary shares, each of which represents one
ordinary share, and ADRs refers to the American depositary receipts that
evidence our ADSs;
 
    
    primary real estate market refers to the market for newly constructed and
completed residential and commercial real properties, primary real estate
agency services refers to agency services provided for the primary real estate
market, secondary real estate market refers to the market for all residential
and commercial real properties other than those for sale in the primary real
estate market, and secondary real estate brokerage services refers to
brokerage services provided for the secondary real estate market;
 
    
    The China Real Estate Top 10 Committee refers to a real estate market
research task force jointly organized by the China Real Estate Association, the
Enterprise Research Institute of Development Research Center of the State
Council of PRC, the Institute of Real Estate Studies of Tsinghua University and
the China Index Academy; and
 
    
    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
   1




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
    
    our anticipated growth strategies;
 
    
    our future business development, results of operations and financial
condition;
 
    
    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 industry.
   
 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
     2




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As of and for the Year Ended December 31,2004
    
    2005
    
    2006
    
    2007
    
    2008(in thousands of $, except share, per share and per ADS data)Consolidated Statement of Operations Data:Total revenues
    
    
    31,198
    
    
    
    38,661
    
    
    
    55,999
    
    
    
    121,016
    
    
    
    154,487Cost of revenues
    
    
    (9,844
    )
    
    
    (10,818
    )
    
    
    (10,244
    )
    
    
    (23,510
    )
    
    
    (31,856
    )Selling, general and
administrative expenses
    
    
    (14,299
    )
    
    
    (13,250
    )
    
    
    (21,322
    )
    
    
    (45,546
    )
    
    
    (77,197
    )Income from operations
    
    
    7,055
    
    
    
    14,593
    
    
    
    24,433
    
    
    
    51,960
    
    
    
    45,434Net income
    
    
    5,589
    
    
    
    11,148
    
    
    
    18,107
    
    
    
    41,726
    
    
    
    39,576Earnings per ordinary share and
ADS(1):Basic
    
    $
    0.11
    
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.62
    
    
    $
    0.48Diluted
    
    $
    0.11
    
    
    $
    0.22
    
    
    $
    0.27
    
    
    $
    0.56
    
    
    $
    0.48Dividends per ordinary share:Basic
    
    
    0.10
    
    
    
    0.07
    
    
    
    0.08
    
    
    
    
    
    
    
    Weighted average number of
ordinary shares used in per
share calculations:Basic
    
    
    50,000,000
    
    
    
    50,000,000
    
    
    
    50,000,000
    
    
    
    60,386,083
    
    
    
    81,818,972Diluted
    
    
    50,000,000
    
    
    
    50,000,000
    
    
    
    67,372,353
    
    
    
    74,555,709
    
    
    
    82,110,430Consolidated Balance Sheet Data:Cash and cash equivalents
    
    
    10,071
    
    
    
    12,712
    
    
    
    24,306
    
    
    
    101,148
    
    
    
    225,663Total assets
    
    
    54,159
    
    
    
    48,231
    
    
    
    89,430
    
    
    
    329,553
    
    
    
    519,914Total current liabilities
    
    
    40,785
    
    
    
    39,895
    
    
    
    28,751
    
    
    
    54,510
    
    
    
    108,673Mezzanine equity
    
    
    
    
    
    
    
    
    
    
    24,828
    
    
    
    
    
    
    
    Total shareholders equity
    
    
    9,807
    
    
    
    5,242
    
    
    
    32,370
    
    
    
    271,173
    
    
    
    403,298
 Note: (1) Each ADS represents one ordinary share. Exchange Rate Information
   3




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Noon Buying RatePeriodPeriod
    
    End
    
    
    Average(1)
    
    
    Low
    
    
    High2004
    
    
    8.2765
    
    
    
    8.2768
    
    
    
    8.2774
    
    
    
    8.27642005
    
    
    8.0702
    
    
    
    8.1826
    
    
    
    8.2765
    
    
    
    8.07022006
    
    
    7.8041
    
    
    
    7.9579
    
    
    
    8.0702
    
    
    
    7.80412007
    
    
    7.2946
    
    
    
    7.5806
    
    
    
    7.8127
    
    
    
    7.29462008
    
    
    6.8225
    
    
    
    6.9193
    
    
    
    7.2946
    
    
    
    6.7800October
    
    
    6.8388
    
    
    
    6.8358
    
    
    
    6.8521
    
    
    
    6.8171November
    
    
    6.8254
    
    
    
    6.8281
    
    
    
    6.8373
    
    
    
    6.8220December
    
    
    6.8225
    
    
    
    6.8539
    
    
    
    6.8842
    
    
    
    6.82252009
January
    
    
    6.8392
    
    
    
    6.8360
    
    
    
    6.8403
    
    
    
    6.8225February
    
    
    6.8395
    
    
    
    6.8363
    
    
    
    6.8470
    
    
    
    6.8241March
    
    
    6.8329
    
    
    
    6.8360
    
    
    
    6.8438
    
    
    
    6.8240April
(through April 24)
    
    
    6.8250
    
    
    
    6.8318
    
    
    
    6.8361
    
    
    
    6.8250
 (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
 Our business is sensitive to the current global economic crisis. A severe or prolonged downturn in
the global economy could materially and adversely affect our revenues and results of operations.
   Our business is susceptible to fluctuations in the real estate market of China, especially in
certain areas of eastern China where a significant portion of our operations are concentrated,
which may adversely affect our revenues and results of operations.
   4




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Our business may be materially and adversely affected by government measures aimed at Chinas real
estate industry.
    The real estate services industry in China is relatively new and rapidly evolving, and if this
industry does not develop or mature as quickly as we expect, the growth and success of our business
may be materially and adversely affected.
  If the value of our brand or image diminishes, it could have a material adverse effect on our
business and results of operations.
   5




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We may not be able to successfully execute our strategy of expanding into new geographical markets
in China, which could have a material adverse effect on our business and results of operations.
  If we cannot manage our growth effectively and efficiently, our operating results or profitability
could be adversely affected.
  If we fail to successfully execute the business plans for our strategic alliances and other new
business initiatives, our anticipated growth and prospects may be materially and adversely
affected.
     6




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We may lose our competitive advantage if we fail to maintain and improve our proprietary CRIC
system or prevent disruptions or failure in the performance of our CRIC system.
   If we are unable to compete successfully, our financial condition and results of operations may be
harmed.
    Our results of operations and cash flows may fluctuate due to seasonal variations in the real
estate market, the non-recurring nature of our primary real estate agency services, billing cycles,
unpredictable development cycles and advance cash deposits.
    7




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Our reliance on a concentrated number of real estate developers may materially and adversely affect
us.
  We face long cycles to settle our accounts receivable, which could materially and adversely affect
our results of operations.
   Our ability to successfully sell the properties we contract to sell may be materially and adversely
affected if our developer clients fail to make timely delivery of the properties or any of these
properties experience significant quality defects, negative publicity or other problems.
  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.
   8




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Any failure to protect our brand, trademarks and other intellectual property rights could have a
negative impact on our business.
  
  Copyright infringement and other intellectual property claims against us may adversely affect our
business and our ability to operate our CRIC system.
   9




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If we fail to obtain or keep licenses and permits applicable to real estate brokerages, we may
incur significant financial penalties and other government sanctions.
   We may be subject to liabilities in connection with real estate brokerage activities.
  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.
    10




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Risks Related to Our Corporate Structure
 If the PRC government finds that the agreements that establish the structure for operating the
advertising portion of our business in China do not comply with PRC governmental restrictions on
foreign investment in the advertising industry, we could be subject to severe penalties.
     
    
    revoking the business and operating licenses of our PRC subsidiaries and affiliates;
    
    discontinuing or restricting our PRC subsidiaries and affiliates operations;
    
    imposing conditions or requirements with which we or our PRC subsidiaries and
affiliates may not be able to comply; or
    
    requiring us or our PRC subsidiaries and affiliates to restructure the relevant
ownership structure or operations.
  We rely on contractual arrangements with Tian Zhuo and its shareholder for a portion of our
operations, which may not be as effective as direct ownership in providing operational control.
   11




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The beneficial owner of Tian Zhuo may have potential conflicts of interest with us, which may
materially and adversely affect our business and financial condition.
  Contractual
arrangements we have entered into with Tian Zhuo may
be subject to scrutiny by the PRC tax authorities and a finding that we 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
adverse effect on overall economic growth in China, which could adversely affect our business.
    12




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Uncertainties with respect to the Chinese legal system could adversely affect us.
  Governmental control of currency conversion may affect the value of your investment.
  Fluctuation in the value of the RMB may have a material adverse effect on your investment.
    13




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Recent PRC regulations relating to the establishment of offshore special purpose companies by PRC
domestic residents and registration requirements for employee stock ownership plans or share option
plans may subject our PRC resident beneficial owners or the plan participants to personal
liability, limit our ability to inject capital into our PRC subsidiaries, limit our subsidiaries
ability to increase their registered capital or distribute profits to us, or may otherwise
adversely affect us.
     Recent PRC regulations relating to foreign acquisitions may subject us to requisite approval by the
Ministry of Commerce, or MOC, and the failure to obtain such approval could have a material adverse
effect on our business, operating results, reputation and trading price of our ADSs.
   14




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We rely principally on dividends and other distributions on equity paid by our subsidiaries to fund
any cash and financing requirements we may have, and any limitation on the ability of our
subsidiaries to make payments to us could have a material adverse effect on our ability to conduct
our business.
  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.
    15




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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, or we may
be subject to PRC taxation on our worldwide income and dividends distributed to our investors may
be subject to PRC withholding taxes under the new EIT Law.
  Foreign ownership of the real estate agency and brokerage business in China is restricted under the
recent PRC regulation. This may limit our ability to establish our new PRC operating entities or to
increase registered capital of existing entities in the future.
   Any man-made or natural disaster, including outbreaks of health epidemics, and other extraordinary
events could severely disrupt our business operations.
   16




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Risks Related to Our ADSs
 The market price for our ADSs may be volatile.
  
    
    actual or anticipated fluctuations in our quarterly operating results;
 
    
    changes in financial estimates by securities research analysts;
 
    
    conditions in the real estate industry in China;
 
    
    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;
 
    
    potential litigation or administrative investigations;
 
    
    sales or repurchases of our ADSs or ordinary shares; and
 
    
    general economic or political conditions in China.
  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.
  Our corporate actions are substantially controlled by Xin Zhou, our co-founder, chairman and chief
executive officer.
   17




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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.
     18




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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
        19




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Business Overview
 Overview
      Our Services
  Primary Real Estate Agency Services
  For the Year Ended December 31,2006
    
    
    2007
    
    
    2008Total GFA of new properties sold (thousands of square meters)
    
    
    1,955
    
    
    
    3,985
    
    
    
    4,115Total value of new properties sold (millions of $)
    
    
    2,037
    
    
    
    3,929
    
    
    
    4,478
  20




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Secondary Real Estate Brokerage Services
     21




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Real Estate Consulting and Information Services
  Real Estate Consulting Services.
 Land Acquisition Consulting.
 Real Estate Development Consulting.
  Other Consulting.
 Real Estate Information Services.
  22




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Real Estate Advertising Services
     Real Estate Investment Fund Management
   23




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CRIC System
    Research and Development
   Marketing and Brand Promotion
  Advertisements.
 Seminars and Workshops.
 E-House Membership Club.
  24




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Competition
    Employees and Training
     Intellectual Property
   25




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www.ehousechina.com www.1fang.com www.cityrehouse.com.cn www.yiju.org
  Facilities
  Legal Proceedings
  Regulation
  Regulation of Real Estate Services Industry
  Regulation on the Establishment of Real Estate Services Companies
  Regulation of Real Estate Agency Companies and Agents
   26




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Regulation of Real Estate Consultation Business
  Regulation of Real Estate Intermediary Service Charges
   27




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Regulations on the Real Estate Market
  
    
    requiring real estate developers to fund with their internal resources 35% rather
than 20% of the total projected capital outlays of any real estate development;
 
    
    restricting credit availability based on the criteria that monthly housing expense,
including mortgage payments and property service fees, to 50% of an individual
borrowers monthly income, and limiting all monthly debt service payments of an
individual borrower to 55% of his or her monthly income; and
 
    
    tightening regulations governing mortgage lending and restricting approval of areas
for new development.
  
    
    requiring that at least 70% of the land approved by a local government for
residential real estate development for any given year be used for developing low- to
medium-cost and small- to medium-sized units and low-cost rental properties;
 
    
    requiring that at least 70% of the total development and construction area of
residential projects approved, or construction which commenced, on or after June 1,
2006 within each city or county, consist of units with a floor area of less than 90
square meters per unit;
 
    
    increasing the minimum down payment from 20% to 30% of the purchase price for
property with a unit floor area of 90 square meters or more; and
 
    
    imposing a business tax on the proceeds from re-sale of properties held for less
than five years.
  28




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
    
    for a first-time home owner, increasing the minimum amount of down payment to 30% of
the purchase price of the underlying property if the underlying property has a unit
floor area of 90 square meters or more and the purchaser is buying the property as
his/her own residence;
 
    
    for a second-time home buyer, increasing (i) the minimum amount of down payment to
40% of the purchase price of the underlying property and (ii) the minimum mortgage loan
interest rate to 110% of the relevant benchmark lending interest rate of the Peoples
Bank of China;
 
    
    for a commercial real estate buyer, (i) requiring banks not to finance any purchase
of pre-sold properties, (ii) increasing the minimum amount of down payment to 50% of
the purchase price of the underlying property, (iii) increasing the minimum mortgage
loan interest rate to 110% of the relevant benchmark lending interest rate of Peoples
Bank of China, (iv) limiting the terms of such bank loans to no more than ten years,
although the commercial banks are allowed flexibility based on its risk assessment; and
 
    
    for a buyer of commercial/residential dual-purpose properties, increasing the
minimum amount of down payment to 45% of the purchase price of the underlying property,
with the other terms to be decided by reference to commercial properties.
   
    
    In transactions where first time homebuyers purchase units with floor areas of 90
square meters or less, the deed tax rate is reduced to 1%;
 
    
    all residential real estate transactions by individuals are exempt from stamp tax;
and
 
    
    all residential real estate transactions by individuals are exempt from land
appreciation tax.
    29




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
    
    From January 1, 2009 to December 31, 2009,
 
    
    sales of ordinary housing units held by individuals for at least two
years are exempt from business tax;
 
    
    sales of ordinary housing units held by individuals for less than two
years are subject to business tax on the difference between the sales price and the
purchase price;
 
    
    sales of non-ordinary housing units held by individuals for at least two
years are subject to business tax on the difference between the sales price and the
purchase price;
 
    
    sales of non-ordinary housing units held by individuals for less than two
years are subject to business tax on the sales price; and
 
    
    The urban real estate tax is abolished and domestic enterprises, foreign
enterprises, foreign-funded enterprises and individuals shall pay real estate tax in
accordance with the Interim Regulation on Real Estate Tax.
 Regulations on Trademarks
  Regulations on Foreign Currency Exchange
     30




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Regulations on Loans to and Direct Investment in PRC Entities by Offshore Holding Companies
    Regulations on Employee Share Options
   31




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Regulations on Dividend Distribution
  
    
    the Wholly Foreign Owned Enterprise Law (1986), as amended;
 
    
    the Wholly Foreign Owned Enterprise Law Implementing Rules (1990), as amended;
 
    
    the Sino-foreign Equity Joint Venture Enterprise Law (1979), as amended; and
 
    
    the Sino-foreign Equity Joint Venture Enterprise Law Implementing Rules (1983), as
amended.
  Limitations on Foreign Ownership in the Advertising Industry
  
    
    we are able to exert effective control over Tian Zhuo and its subsidiaries;
 
    
    a substantial portion of the economic benefits of Tian Zhuo and its subsidiaries
are transferred to us; and
 
    
    we have an exclusive option to purchase all of the equity interests in Tian Zhuo to
the extent permitted by PRC law.
     32




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Organizational Structure
  
 (1)
    
    Shanghai Tian Zhuo Advertising Co., Ltd. is a variable interest entity
established in China in 2008 and is wholly owned by Mr. Xin Zhou, our
chief executive officer. We effectively control Shanghai Tian Zhuo
Advertising Co., Ltd. through contractual arrangements. See Item 7.
Major Shareholders and Related Party TransactionsB. Related Party
TransactionsContractual Agreements with Shanghai Tian Zhuo
Advertising Co. Ltd.
 Property, Plants and Equipment
  
 ITEM 4A. UNRESOLVED STAFF COMMENTS
  
 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
 Form 20-F.
  33




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Operating Results
 Overview
   Factors Affecting Our Results of Operations
  Revenues
 For The Year Ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    %
    
    
    $
    
    
    %
    
    
    $
    
    
    %Revenues:Primary real estate agency services
    
    
    45,708
    
    
    
    81.6
    
    
    
    100,541
    
    
    
    83.1
    
    
    
    90,492
    
    
    
    58.6Secondary real estate brokerage
services
    
    
    3,846
    
    
    
    6.9
    
    
    
    11,888
    
    
    
    9.8
    
    
    
    12,058
    
    
    
    7.8Real estate consulting and
information
services
    
    
    6,445
    
    
    
    11.5
    
    
    
    8,587
    
    
    
    7.1
    
    
    
    49,816
    
    
    
    32.2Others
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,121
    
    
    
    1.4Total revenues
    
    
    55,999
    
    
    
    100.0
    
    
    
    121,016
    
    
    
    100.0
    
    
    
    154,487
    
    
    
    100.0
 Primary Real Estate Agency Services.
  34




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##### Table of Contents




    
    total GFA of the properties we sell;
 
    
    total transaction value of the properties we sell; and
 
    
    commission rates.
  Secondary Real Estate Brokerage Services.
   35




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##### Table of Contents



Real Estate Consulting and Information Services.
     Cost of Revenues.
 Selling, General and Administrative Expenses.
 Share-based Compensation Expenses.
   36




---



##### Table of Contents



Number of Ordinary SharesGrant Date
    
    Underlying Options Granted
    
    
    Exercise PriceNovember 28, 2006
    
    
    436,364
    (1)
    
    $
    3.30March 9, 2007
    
    
    300,000
    
    
    $
    5.50July 17, 2007
    
    
    640,833
    (2)
    
    $
    5.37
    (2)July 23, 2007
    
    
    66,666
    (2)
    
    $
    5.37
    (2)January 7, 2008
    
    
    427,000
    (2)
    
    $
    5.37
    (2)January 10, 2008
    
    
    21,500
    
    
    $
    5.37
    (2)April 15, 2008
    
    
    708,500
    (2)
    
    $
    5.37
    (2)June 12, 2008
    
    
    10,000
    
    
    $
    5.37
    (2)August 3, 2008
    
    
    100,000
    
    
    $
    5.37
    (2)
 
 (1)
    
    These options were subsequently 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.(2)
    
    On November 7, 2008, our board of directors authorized the adjustment of the
exercise price of some previously granted options to $5.37 per ordinary share and authorized the
amendment and restatement of options granted pursuant to our share option plan. Modifications subsequently
made to selected granted options pursuant to this authorization did not affect the manner in which
we recognize share-based compensation expense.  We engaged an
independent appraiser to assess the fair value of our options and ordinary
shares underlying the options. Determining the fair value of options and
ordinary shares requires making complex and subjective judgments. In assessing
the fair value of our ordinary shares prior to our IPO on August 8, 2007,
we considered the following principal factors:  •
  
  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
services industry in China;  •
  
  the growth of our operations; and  •
  
  our business risks. The fair value of
our ordinary shares was determined to be $3.30 per share as of
November 28, 2006, which was the price in a share sales transaction
between an existing shareholder of our company and a group of third parties
unrelated to us, which transaction took place one day after we granted the
option. The income approach
was used to assess the fair value of our ordinary shares as of March 9 and
July 23, 2007. The income approach resulted in a fair value of $5.50 and
$10.67 per share, respectively. The March 9, 2007 valuation was the same
as the price in a share sales transaction between an existing shareholder of
our company and a group of third parties unrelated to us, which transaction
took place three days before we granted the options. The income approach
involved applying appropriate discount rates to estimated cash flows that were
based on our earnings forecasts. The major assumptions used by the independent
appraiser in deriving the fair value of our ordinary shares were consistent
with our business plan and major milestones that we achieved. Other major
assumptions used in determining the fair value of our ordinary share as of
March 9 and July 23, 2007 included the following:  •
  
  Weighted average costs of capital, or WACC, of
13.2% and 14.3%, respectively, was used. 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, or DLOM,
of 6% was used for both valuations. This took into consideration our proposed
offering in several months. The independent
appraiser also used other general assumptions, including the following: no
material changes in the existing political, legal, fiscal and economic
conditions and real estate industry in China; our ability to retain competent
management and key personnel to support our ongoing operations; and no material
deviation in market conditions from economic forecasts.  Taxation
       37




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Critical Accounting Policies
   Revenue Recognition
       Variable Interest Entities
   38




---



##### Table of Contents



Share-based Compensation
   Goodwill Valuation
  
   39




---



##### Table of Contents



Income Taxes
   40




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##### Table of Contents



Results of Operations
  For the Year Ended December 31,2006
    
    
    2007
    
    
    2008(in thousands of $)Consolidated Statement of Operations Data:Revenues
    
    
    55,999
    
    
    
    121,016
    
    
    
    154,487Cost of revenues
    
    
    (10,244
    )
    
    
    (23,510
    )
    
    
    (31,856
    )Selling, general and administrative expenses
    
    
    (21,322
    )
    
    
    (45,546
    )
    
    
    (77,197
    )Income from operations
    
    
    24,433
    
    
    
    51,960
    
    
    
    45,434Other income (expense):Interest expense
    
    
    (594
    )
    
    
    (622
    )
    
    
    (2,420
    )Interest income
    
    
    206
    
    
    
    2,490
    
    
    
    3,063Other income
    
    
    168
    
    
    
    199
    
    
    
    1,970Income
before taxes, equity in affiliates and minority interest
    
    
    24,213
    
    
    
    54,027
    
    
    
    48,047Income tax expenses
    
    
    (5,751
    )
    
    
    (10,277
    )
    
    
    (8,713
    )Income from investment in affiliates
    
    
    
    
    
    
    
    
    
    
    154Minority interests, net of tax
    
    
    (355
    )
    
    
    (2,024
    )
    
    
    88Net income
    
    
    18,107
    
    
    
    41,726
    
    
    
    39,576
 Segment Information
  Secondaryreal estate
    
    
    Real estatePrimary real
    
    
    brokerage
    
    
    consultingestate agency
    
    
    service
    
    
    and information2008
    
    service segment
    
    
    segment
    
    
    service segment
    
    
    Others
    
    
    Non-allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues from external customers
    
    
    90,492,009
    
    
    
    12,058,598
    
    
    
    49,815,916
    
    
    
    2,120,932
    
    
    
    
    
    
    
    154,487,455Cost of revenues
    
    
    (27,179,848
    )
    
    
    (1,725,941
    )
    
    
    (2,855,398
    )
    
    
    (94,661
    )
    
    
    
    
    
    
    (31,855,848
    )Selling, general and
administrative expenses
    
    
    (33,624,754
    )
    
    
    (20,209,062
    )
    
    
    (14,446,451
    )
    
    
    (2,109,633
    )
    
    
    (6,807,731
    )
    
    
    (77,197,631
    )Income/(loss) from operations
    
    
    29,687,407
    
    
    
    (9,876,405
    )
    
    
    32,514,067
    
    
    
    (83,362
    )
    
    
    (6,807,731
    )
    
    
    45,433,976Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,420,468
    )
    
    
    (2,420,468
    )Interest income
    
    
    551,545
    
    
    
    30,475
    
    
    
    416,769
    
    
    
    8,152
    
    
    
    2,055,572
    
    
    
    3,062,513Other income
    
    
    1,209,253
    
    
    
    22,483
    
    
    
    (1,110,367
    )
    
    
    
    
    
    
    1,849,112
    
    
    
    1,970,481Income before taxes, equity in
an associate and minority
interest
    
    
    31,448,205
    
    
    
    (9,823,447
    )
    
    
    31,820,469
    
    
    
    (75,210
    )
    
    
    (5,323,515
    )
    
    
    48,046,502Income tax expense
    
    
    (4,825,590
    )
    
    
    52,535
    
    
    
    (4,245,774
    )
    
    
    306,271
    
    
    
    
    
    
    
    (8,712,558
    )Income before equity in an
associate and minority interest
    
    
    26,622,615
    
    
    
    (9,770,912
    )
    
    
    27,574,695
    
    
    
    231,061
    
    
    
    (5,323,515
    )
    
    
    39,333,944Income from investment in
affiliated company
    
    
    
    
    
    
    
    
    
    
    153,700
    
    
    
    
    
    
    
    
    
    
    
    153,700Net income/(loss) after taxes
before minority interest
    
    
    26,622,615
    
    
    
    (9,770,912
    )
    
    
    27,728,395
    
    
    
    231,061
    
    
    
    (5,323,515
    )
    
    
    39,487,644
  41




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##### Table of Contents



Secondaryreal estate
    
    
    Real estatePrimary real
    
    
    brokerage
    
    
    consultingestate agency
    
    
    service
    
    
    and information2007
    
    service segment
    
    
    segment
    
    
    service segment
    
    
    Non-allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues from external customers
    
    
    100,541,226
    
    
    
    11,888,443
    
    
    
    8,586,931
    
    
    
    
    
    
    
    121,016,600Cost of revenues
    
    
    (22,859,701
    )
    
    
    
    
    
    
    (650,364
    )
    
    
    
    
    
    
    (23,510,065
    )Selling, general and
administrative expenses
    
    
    (23,777,560
    )
    
    
    (14,997,248
    )
    
    
    (4,402,954
    )
    
    
    (2,368,038
    )
    
    
    (45,545,800
    )Income/(loss) from operations
    
    
    53,903,965
    
    
    
    (3,108,805
    )
    
    
    3,533,613
    
    
    
    (2,368,038
    )
    
    
    51,960,735Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (621,903
    )
    
    
    (621,903
    )Interest income
    
    
    884,139
    
    
    
    36,274
    
    
    
    2,797
    
    
    
    1,566,458
    
    
    
    2,489,668Other income
    
    
    753,476
    
    
    
    96,372
    
    
    
    (503,849
    )
    
    
    (148,107
    )
    
    
    197,892Income before taxes and
minority interest
    
    
    55,541,580
    
    
    
    (2,976,159
    )
    
    
    3,032,561
    
    
    
    (1,571,590
    )
    
    
    54,026,392Income tax expense
    
    
    (10,312,711
    )
    
    
    (4,506
    )
    
    
    40,177
    
    
    
    
    
    
    
    (10,277,040
    )Net income/(loss) after taxes
before minority interest
    
    
    45,228,869
    
    
    
    (2,980,665
    )
    
    
    3,072,738
    
    
    
    (1,571,590
    )
    
    
    43,749,352
 Secondaryreal estate
    
    
    Real estatePrimary real
    
    
    brokerage
    
    
    consultingestate agency
    
    
    service
    
    
    and information2006
    
    service segment
    
    
    segment
    
    
    service segment
    
    
    Non-allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues from external customers
    
    
    45,708,032
    
    
    
    3,845,296
    
    
    
    6,445,196
    
    
    
    
    
    
    
    55,998,524Cost of revenues
    
    
    (10,062,254
    )
    
    
    
    
    
    
    (181,714
    )
    
    
    
    
    
    
    (10,243,968
    )Selling, general and
administrative
income/(expenses)
    
    
    (13,397,110
    )
    
    
    (5,285,358
    )
    
    
    (703,026
    )
    
    
    (1,936,232
    )
    
    
    (21,321,726
    )Income/(Loss) from operations
    
    
    22,248,668
    
    
    
    (1,440,062
    )
    
    
    5,560,456
    
    
    
    (1,936,232
    )
    
    
    24,432,830Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (594,488
    )
    
    
    (594,488
    )Interest income
    
    
    188,888
    
    
    
    6,115
    
    
    
    11,375
    
    
    
    
    
    
    
    206,378Income/(Loss) before taxes and
minority interest
    
    
    22,605,571
    
    
    
    (1,433,947
    )
    
    
    5,571,831
    
    
    
    (2,530,720
    )
    
    
    24,212,735Income tax expense
    
    
    (5,751,102
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,751,102
    )Net income/(loss) after taxes
before minority interest
    
    
    16,854,469
    
    
    
    (1,433,947
    )
    
    
    5,571,831
    
    
    
    (2,530,720
    )
    
    
    18,461,633
 Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
 Revenues.
 
    
    Primary Real Estate Agency Services. Revenues from our primary real estate agency
services decreased by 10.0% from $100.5 million in 2007 to $90.5 million in 2008. This
decrease was primarily due to a lower average commission rate of 2.0% in 2008, compared
to 2.6% in 2007. This was partially offset by increases in both the GFA and total
transaction value of new properties sold. The GFA of properties we sold increased from
approximately 4.0 million square meters in 2007 to approximately 4.1 million square
meters in 2008 and the total transaction value of the properties we sold increased from
$3.9 billion in 2007 to $4.5 billion in 2007.
 
    
    Secondary Real Estate Brokerage Services. Revenues from our secondary real estate
brokerage services increased by 1.4% from $11.9 million in 2007 to $12.1 million in
2008. Revenue growth was negatively affected by reduced secondary real estate
transaction volume in 2008 as a result of slower growth in Chinas economy and
deterioration of the demand for real estate purchases. As of December 31, 2008, we had
a total of 115 secondary real estate brokerage stores in five cities in China, compared
to 160 stores as of December 31, 2007, as a result of our decision to reduce the number
of stores in response to deteriorating market conditions and in an effort to decrease
operating expenses.
  42




---



##### Table of Contents




    
    Real Estate Consulting and Information Services. Revenues from our real estate
consulting and information services increased by 480.1% from $8.6 million in 2007 to
$49.8 million in 2008. This growth was primarily due to substantial consulting revenues
derived from strategic arrangements we entered into with major developers covering
multiple cities and projects and an increase in the number and size of consulting
projects completed for other developers. The increase also resulted from the completion
of a number of consulting projects associated with land transfer in 2008.
 Cost of Revenues.
 Selling, General and Administrative Expenses.
 
    
    Primary Real Estate Agency Segment. Selling, general and administrative expenses for
our primary real estate agency segment increased by 41.4% from $23.8 million in 2007 to
$33.6 million in 2008 primarily due to an increase in staff salaries for our management
employees by $2.7 million as a result of hiring additional staff and increases in
salaries, and an increase in marketing, consulting, rental and travel expenses by $5.8
million as a result of hiring new employees and expanding our operations.
 
    
    Secondary Real Estate Brokerage Service Segment. Selling, general and administrative
expenses for our secondary real estate brokerage service segment increased by 34.8%
from $15.0 million in 2007 to $20.2 million in 2008 primarily due to an increase in
staff salaries by $3.2 million as a result of a larger number of
staff, and an increase
in rental and administrative expenses for our brokerage storefronts by $3.7 million as
a result of operating a higher average number of stores in 2008 than
in 2007.
 
    
    Real Estate Consulting and Information Service Segment. Selling , general and
administrative expense for our real estate consulting and information service segment
increased by 228.1% from $4.4 million in 2007 to $14.4 million in 2008 primarily due to
an increase in staff salaries for our management employees by $5.5 million as a result
of hiring additional staff and increases in salaries, and an increase in marketing,
consulting, rental, travel and other administrative expenses by $5.4 million as a
result of hiring new employees and expanding our operations.
 Income Tax Expenses.
 Minority Interest.
 Net Income.
  43




---



##### Table of Contents



Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
 Revenues.
 
    
    Primary Real Estate Agency Services. Revenues from our primary real estate agency
services increased by 120.0% from $45.7 million in 2006 to $100.5 million in 2007. This
increase was primarily due to the further expansion of primary real estate agency
operations, which resulted in a significant increase in the GFA and total transaction
value of new properties sold. The GFA of properties we sold increased from
approximately 2.0 million square meters in 2006 to approximately 4.0 million square
meters in 2007 and the total transaction value of the properties we sold increased from
$2.0 billion in 2006 to $3.9 billion in 2007. The average commission rate was 2.6% in
2007, compared to 2.2% in 2006, mainly due to higher commission revenues earned upon
exceeding sales targets for a number of projects.
 
    
    Secondary Real Estate Brokerage Services. Revenues from our secondary real estate
brokerage services increased substantially by 209.2% from $3.8 million in 2006 to $11.9
million in 2007. This growth was primarily attributable to the continued expansion of
our secondary real estate brokerage services. As of December 31, 2007, we had a total
of 160 secondary real estate brokerage stores in five cities in China.
 
    
    Real Estate Consulting and Information Services. Revenues from our real estate
consulting and information services increased by 33.2% from $6.4 million in 2006 to
$8.6 million in 2007. This growth was primarily due to continued expansion of our real
estate consulting services and our strengthened efforts in commercializing the CRIC
system in 2007.
 Cost of Revenues.
 Selling, General and Administrative Expenses.
 
    
    Primary Real Estate Agency Segment. Selling, general and administrative expenses for
our primary real estate agency segment increased from $13.4 million in 2006 to $23.8
million in 2007 primarily due to an increase in staff costs for our management
employees by $4.6 million as a result of hiring additional staff, and an increase in
marketing, consulting, rental, travel, and other administrative expenses by $5.8
million as a result of expanding our operations and hiring new employees.
 
    
    Secondary Real Estate Brokerage Service Segment. Selling, general and administrative
expenses for our secondary real estate brokerage service segment increased from
$5.3 million in 2006 to $15.0 million in 2007 primarily due to the expansion of our
secondary real estate brokerage service, resulting in increases in staff costs by
$4.4 million due to the hiring of additional staff, and increase in marketing, rental
and administrative expenses for brokerage storefronts by $5.3 million.
 
    
    Real Estate Consulting and Information Service Segment.Selling, general and
administrative expenses for our real estate consulting and information service segment
changed from an income of $0.7 million in 2006 to an expense of $4.4 million in 2007
primarily due to an increase in staff costs for our management employees by
$2.6 million as a result of hiring additional staff, and an increase in marketing,
consulting, rental, travel, and other administrative expenses by $1.1 million as a
result of expanding our operations and hiring new employees.
 Income Tax Expenses.
 Minority Interest.
 Net Income.
  44




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Liquidity and Capital Resources
 
  For the Year Ended December 31,2006
    
    
    2007
    
    
    2008(in thousands of $)Net cash (used in) provided by operating activities
    
    
    (2,590
    )
    
    
    (81,273
    )
    
    
    77,973Net cash (used in) provided by investing activities
    
    
    (12,624
    )
    
    
    (5,500
    )
    
    
    (26,521
    )Net cash provided by (used in) financing activities
    
    
    26,413
    
    
    
    162,108
    
    
    
    70,103Net increase (decrease) in cash and cash equivalents
    
    
    11,594
    
    
    
    76,842
    
    
    
    124,515Cash and cash equivalents at beginning of the period
    
    
    12,712
    
    
    
    24,306
    
    
    
    101,148Cash and cash equivalents at end of the period
    
    
    24,306
    
    
    
    101,148
    
    
    
    225,663
 Operating Activities
     Investing Activities
    45




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##### Table of Contents



Financing Activities
      Type
    
    Amount
    
    
    Interest Rate
    
    
    Maturity DateBank loan
    
    RMB100,000,000 ($14,657,000)
    
    7.2270% fixed rate
    
    September 17, 2009Bank loan
    
    RMB50,000,000 ($7,329,000)
    
    6.1380% fixed rate
    
    March 30, 2009
    46




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##### Table of Contents



Research and Development, Patents and Licenses, etc.
 Research and Development
   Intellectual Property
  E-House.
  Trend Information
   47




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Tabular Disclosure of Contractual Obligations
  Payment Due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 year
    
    
    1-3 year
    
    
    3-5 year
    
    
    5 years(in thousands of $)Short-term debt
obligations (including
interest payment)
    
    
    21,947
    
    
    
    21,947
    
    
    
    
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    19,041
    
    
    
    9,491
    
    
    
    8,333
    
    
    
    1,213
    
    
    
    4Total
    
    
    40,988
    
    
    
    31,438
    
    
    
    8,333
    
    
    
    1,213
    
    
    
    4
  Safe Harbor
 Form 20-F
  48




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##### Table of Contents



ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 Directors and Senior Management
  Directors and Executive Officers
    
    Age
    
    Position/TitleXin Zhou
    
    
    41
    
    
    Chairman, Chief Executive OfficerNeil Nanpeng Shen
    
    
    41
    
    
    DirectorCharles Chao
    
    
    43
    
    
    DirectorBing Xiang
    
    
    46
    
    
    Independent DirectorHongchao Zhu
    
    
    49
    
    
    Independent DirectorMay Wu
    
    
    41
    
    
    Independent DirectorJeffrey Zhijie Zeng
    
    
    40
    
    
    Independent DirectorYunchang Gu
    
    
    65
    
    
    Independent DirectorCanhao Huang
    
    
    51
    
    
    Executive Director and Head of Operations ManagementLi-Lan Cheng
    
    
    44
    
    
    Chief Financial OfficerYongyue Zhang
    
    
    54
    
    
    Head of E-House Research InstituteJianjun Zang
    
    
    41
    
    
    Co-head of Primary Agency ServiceXudong Zhu
    
    
    41
    
    
    Co-head of Primary Agency ServiceZuyu Ding
    
    
    35
    
    
    Head of Consulting and Information ServiceBer Jen Ko
    
    
    45
    
    
    Head of Secondary Brokerage Service
 Mr. Xin Zhou
 Mr. Neil Nanpeng Shen
 Mr. Charles Chao
 Mr. Bing Xiang
  49




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##### Table of Contents



Mr. Hongchao Zhu
 Ms. May Wu
 Mr. Jeffrey Zhijie Zeng
 Mr. Yunchang Gu
 Mr. Canhao Huang
 Mr. Li-Lan Cheng
 Mr. Yongyue Zhang
 Mr. Jianjun Zang
  50




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##### Table of Contents



Mr. Xudong Zhu
 Mr. Zuyu Ding
 Mr. Ber Jen Ko
 Employment Agreements
   Compensation of Directors and Executive Officers
  E-House Share Incentive Plan
 E-House Share Incentive Plan.
  51




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##### Table of Contents



Ordinary Shares
    
    
    Exercise Price(2)Name
    
    Underlying Options
    
    
    ($/Share)
    
    Date of Grant
    
    Date of ExpirationNeil Nanpeng Shen
    
    
    40,000
    
    
    5.50
    
    March 9, 2007
    
    March 8, 201720,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Charles Chao
    
    
    60,000
    
    
    5.50
    
    March 9, 2007
    
    March 8, 201720,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Bing Xiang
    
    
    40,000
    
    
    5.50
    
    March 9, 2007
    
    March 8, 201720,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Hongchao Zhu
    
    
    40,000
    
    
    5.50
    
    March 9, 2007
    
    March 8, 201720,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018May Wu
    
    
    40,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 201820,000
    
    
    5.37
    
    August 3, 2008
    
    August 2, 2018Jeffrey Zhijie Zeng
    
    
    40,000
    
    
    5.37
    
    August 3, 2008
    
    August 2, 2018Yunchang Gu
    
    
    40,000
    
    
    5.37
    
    August 3, 2008
    
    August 2, 2018Yongyue Zhang
    
    
    40,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Li-Lan Cheng
    
    
    436,364
    (1)
    
    3.30
    
    November 28, 2006
    
    No expiration date40,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Jianjun Zang
    
    
    40,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Xudong Zhu
    
    
    40,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Canhao Huang
    
    
    40,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Zuyu Ding
    
    
    100,000
    
    
    5.37
    
    July 17, 2007
    
    July 16, 201740,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Ber Jen Ko
    
    
    80,000
    
    
    5.50
    
    March 9, 2007
    
    March 8, 201720,000
    
    
    5.37
    
    April 15, 2008
    
    April 14, 2018Other Individuals as a group
    
    
    1,434,499
    (2)(3)
    
    5.37 to 5.50
    
    March 9, 2007 to
    
    March 8, 2017 toJune 12, 2008
    
    June 11, 2018
 (1)
    
    These options were subsequently 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.(2)
    
    On November 7, 2008, our board of directors authorized the adjustment of the
exercise price of some previously granted options to $5.37 per ordinary share and authorized the
amendment of the terms of options granted pursuant to the E-House plan. Modifications subsequently made to selected
options pursuant to this authorization did not affect the manner in which we recognize share-based
compensation expense.(3)
    
    As of March 31, 2009, options representing 296,501 underlying ordinary shares
previously granted to various individuals have been cancelled.  E-House Plan Administration.
 Award Agreement.
  52




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##### Table of Contents



Eligibility.
 Acceleration of Awards upon Corporate Transactions.
 Term of the Awards.
 Vesting Schedule.
 Transfer Restrictions.
 Termination of the E-House Plan.
 CRIC Share Incentive Plan
 CRIC Share Incentive Plan.
  53




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Common Shares
    
    
    Exercise PriceName
    
    Underlying Options
    
    
    ($/Share)
    
    
    Date of Grant
    
    Date of ExpirationXin Zhou
    
    
    2,500,000
    
    
    
    1.50
    
    
    January 1, 2009
    
    December 31, 2018Yongyue Zhang
    
    
    1,500,000
    
    
    
    1.50
    
    
    January 1, 2009
    
    December 31, 2018Li-Lan Cheng
    
    
    500,000
    
    
    
    1.50
    
    
    January 1, 2009
    
    December 31, 2018Jianjun Zang
    
    
    50,000
    
    
    
    1.50
    
    
    January 1, 2009
    
    December 31, 2018Xudong Zhu
    
    
    50,000
    
    
    
    1.50
    
    
    January 1, 2009
    
    December 31, 2018Canhao Huang
    
    
    50,000
    
    
    
    1.50
    
    
    January 1, 2009
    
    December 31, 2018Zuyu Ding
    
    
    2,000,000
    
    
    
    1.50
    
    
    January 1, 2009
    
    December 31, 2018Ber Jen Ko
    
    
    20,000
    
    
    
    1.50
    
    
    January 1, 2009
    
    December 31, 2018Other Individuals as a group
    
    
    5,310,000
    
    
    
    1.50
    
    
    January 1, 2009
    
    December 31, 2018
  Board Practices
   Committees of the Board of Directors
  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 in
Item 404 of Regulation S-K under the Securities Act;
    
    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.
  54




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Compensation Committee.
 
    
    reviewing and evaluating at least annually and, if necessary, revising the
compensation policies adopted by our management;
    
    reviewing and evaluating at least annually the performance, and determining the
compensation, of our chief executive officer;
    
    reviewing and approving our chief executive officers employment agreement and
amendments thereto, and severance arrangement, if any;
    
    reviewing all annual bonus, long-term incentive compensation, share option, employee
pension and welfare benefit plans; and
    
    reviewing and approving director and executive officer indemnification and insurance
matters, and any employee loans in an amount equal to or greater than $60,000.
  Nominating and Corporate Governance Committee.
 
    
    recommending to our board of directors for nomination or appointment by the board
such candidates as the committee has found to be well qualified and willing and ready
to be elected or reelected to serve as our members of our board or its committees or to
fill any vacancies on our board or its committees, respectively;
    
    reviewing annually the composition of our board of directors and its committees in
light of the characteristics of independence, qualification, experience and
availability of the board members;
    
    developing and recommending to our board of directors a set of corporate governance
guidelines and principles applicable to the company; and
    
    monitoring of compliance with the companys code of business conduct and ethics,
including reviewing the adequacy and effectiveness of our internal rules and procedures
to ensure compliance with applicable laws and regulations.
   55




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##### Table of Contents



Duties of Directors
  Terms of Directors and Officers
  Employees
  Number of
    
    
    Percentage ofEmployees
    
    
    EmployeesCorporate Offices
    
    
    1,173
    
    
    
    18.3
    %Research Department
    
    
    1,626
    
    
    
    25.4
    %Sales Staff
    
    
    3,598
    
    
    
    56.3
    %Total
    
    
    6,397
    
    
    
    100.0
    %
  Share Ownership
  
    
    each of our directors and executive officers; and
    
    each person known to us to own beneficially more than 5.0% of our ordinary shares.
  56




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##### Table of Contents



Shares Beneficially OwnedImmediatelyNumber
    
    
    %Directors and Executive Officers:Xin Zhou(1)()
    
    
    24,884,500
    
    
    
    31.30Neil Nanpeng Shen(2)
    
    
    6,786,664
    
    
    
    8.53Charles Chao(3)
    
    
    51,666
    
    
    
    *Bing Xiang(4)
    
    
    36,664
    
    
    
    *Hongchao Zhu(5)
    
    
    36,664
    
    
    
    *May Wu(6)
    
    
    13,333
    
    
    
    *Yongyue Zhang(7)
    
    
    759,800
    
    
    
    *Li-Lan Cheng(8)
    
    
    292,364
    
    
    
    *Jianjun Zang(9)()
    
    
    3,245,646
    
    
    
    4.08Canhao Huang(10)()
    
    
    1,085,457
    
    
    
    1.37Zuyu Ding(11)()
    
    
    390,783
    
    
    
    *Ber Jen Ko(12)
    
    
    53,600
    
    
    
    *Xudong Zhu
    
    
    
    
    
    
    *Jeffrey Zhijie Zeng
    
    
    
    
    
    
    *Yunchang Gu
    
    
    
    
    
    
    *All Directors and Executive Officers as a Group()
    
    
    32,948,588
    
    
    
    41.31Principal Shareholders:On Chance Inc.(13)()
    
    
    12,969,500
    
    
    
    16.31CHF Investment Limited(14)
    
    
    9,307,874
    
    
    
    11.71Jun Heng Investment Limited(15)()
    
    
    11,915,000
    
    
    
    14.99Smart Create Group Limited(16)
    
    
    6,750,000
    
    
    
    8.49Orbis Investment Management (B.V.I) Limited and affiliates(17)
    
    
    5,697,510
    
    
    
    7.17
 *
    
    Less than 1% of our total outstanding shares.
    
    Each of these directors and executive officers is a beneficial owner of our
shares through On Chance Inc., Jun Heng Investment Limited or both, as the
case may be. On Chance Inc., or On Chance, is also a shareholder of Jun Heng
Investment Limited, or Jun Heng.(1)
    
    Includes 12,969,500 ordinary shares and 11,915,000 ordinary shares
respectively held by On Chance Inc., or On Chance, and Jun Heng Investment
Limited, or Jun Heng. Each of On Chance and Jun Heng is a company incorporated
in British Virgin Islands and controlled by Mr. Zhou. As a result, Mr. Zhou is
deemed to be the beneficial owner of 24,884,500 ordinary shares of our
company. Mr. Zhou disclaims beneficial ownership of these 24,884,500 shares
except to the extent of his pecuniary interest therein. The business address
of Mr. Zhou is 17/F, Merchandise Harvest Building (East), No. 333 North
Chengdu Road, Shanghai, PRC 200041, Peoples Republic of China.(2)
    
    Includes 6,750,000 ordinary shares held by Smart Create Group Limited, or
Smart Create, a British Virgin Islands company that is controlled by Mr. Shen.
Mr. Shen, a shareholder of Smart Create, has been granted a voting proxy by
the other shareholders of Smart Create to vote on their behalf. Mr. Shen
disclaims beneficial ownership of these 6,750,000 shares except to the extent
of his pecuniary interest therein. The business address of Mr. Shen is Suite
2215, 22/F, Two Pacific Place, 88 Queensway Road, Hong Kong.(3)
    
    Represents 51,666 shares issuable upon exercise of options held by Mr. Chao
within 60 days from March 31, 2009. The business address of Mr. Chao is 17/F,
Merchandise Harvest Building (East), No. 333 North Chengdu Road, Shanghai, PRC
200041, Peoples Republic of China.(4)
    
    Represents 36,664 shares issuable upon exercise of options held by Mr. Xiang
within 60 days from March 31, 2009. The business address of Mr. Xiang is 17/F,
Merchandise Harvest Building (East), No. 333 North Chengdu Road, Shanghai, PRC
200041, Peoples Republic of China.(5)
    
    Represents 36,664 shares issuable upon exercise of options held by Mr. Zhu
within 60 days from March 31, 2009. The business address of Mr. Zhu is 17/F,
Merchandise Harvest Building (East), No. 333 North Chengdu Road, Shanghai, PRC
200041, Peoples Republic of China.  57




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##### Table of Contents



(6)
    
    Represents 13,333 shares issuable upon exercise of options held by Ms. Wu
within 60 days from March 31, 2009. The business address of Ms. Wu is 17/F,
Merchandise Harvest Building (East), No. 333 North Chengdu Road, Shanghai, PRC
200041, Peoples Republic of China.(7)
    
    Represents 759,800 ordinary shares held by Mr. Zhang. The business address of
Mr. Zhang is 17/F, Merchandise Harvest Building (East), No. 333 North Chengdu
Road, Shanghai, PRC 200041, Peoples Republic of China.(8)
    
    Represents 292,364 restricted shares held by Mr. Cheng. The business address
of Mr. Cheng is 17/F, Merchandise Harvest Building (East), No. 333 North
Chengdu Road, Shanghai, PRC 200041, Peoples Republic of China.(9)
    
    Represents 3,245,646 ordinary shares held by Jun Heng that is approximately
27.24%-owned by Mr. Zang. The business address of Mr. Zang is 17/F,
Merchandise Harvest Building (East), No. 333 North Chengdu Road, Shanghai, PRC
200041, Peoples Republic of China.(10)
    
    Represents 1,085,457 ordinary shares held by Jun Heng that is approximately
9.11%-owned by Mr. Huang. The business address of Mr. Huang is 17/F,
Merchandise Harvest Building (East), No. 333 North Chengdu Road, Shanghai, PRC
200041, Peoples Republic of China.(11)
    
    Represents 357,450 ordinary shares held by Jun Heng that is approximately
3.00%-owned by Mr. Ding. The business address of Mr. Ding is 17/F, Merchandise
Harvest Building (East), No. 333 North Chengdu Road, Shanghai, PRC 200041,
Peoples Republic of China.(12)
    
    Represents 53.600 shares issuable upon exercise of options held by Mr. Ko
within 60 days from March 31, 2009. The business address of Mr. Ko is 17/F,
Merchandise Harvest Building (East), No. 333 North Chengdu Road, Shanghai, PRC
200041, Peoples Republic of China.(13)
    
    On Chance Inc. is a company incorporated in British Virgin Islands and
95%-owned by Xin Zhou. The registered address of On Chance Inc. is Sea Meadow
House, Blackburne Highway, Road Town, Tortola, British Virgin Islands.(14)
    
    Represents 9,307,874 ordinary shares held by CHF Investment Limited, a British
Virgin Islands company, with the registered address at P.O. Box 173, Kingston
Chambers, Road Town, Tortola, British Virgin Islands. Voting and investment
power of shares beneficially held by CHF Investment Limited is exercised by a
committee which consists of Mark Qiu, Hung Shih, Li Zhenzhi, Charles Pieper
and Nicole Arnaboldi. The address for these committee members is c/o China
Renaissance Capital Investment, L.P., M&C Corporate Services Limited, P.O. Box
309GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman
Islands. In addition, 720,000 ordinary shares are held by China Century
Investment Fund Limited, a Cayman Islands company, with registered address at
M&C Corporate Services Limited, P.O. Box 309GT, Ugland House, South Church
Street, George Town, Grand Cayman, Cayman Islands. Voting and investment power
of shares beneficially held by China Century Investment Fund Limited is
exercised by the same committee of five persons. Such persons disclaim
beneficial ownership of these 10,027,874 shares except to the extent of their
pecuniary interest therein.(15)
    
    Jun Heng Investment Limited is a company incorporated in British Virgin
Islands and controlled by Xin Zhou. The registered address of Jun Heng
Investment Limited is Beaufort House, P.O. Box 438, Road Town, Tortola,
British Virgin Islands.(16)
    
    Smart Create Group Limited is a company incorporated in British Virgin Islands
and controlled by Neil Nanpeng Shen. The registered address of Smart Create
Group Limited is P.O. Box 957, Offshore Incorporations Centre, Road Town,
Tortola, British Virgin Islands.(17)
    
    Based on Schedule 13G filed by Orbis Investment Management (B.V.I) Limited,
Orbis Investment Management Limited and Orbis Asset Management Limited on
February 17, 2009.      58




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##### Table of Contents



ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 Major Shareholders
  Related Party Transactions
 Private Placement
   Loan Guarantee
  Transactions with Certain Related Customer, Shareholders, Directors and Affiliates
 Transactions with Related Customer
  Transactions with Management
  Transactions with Affiliates
     59




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##### Table of Contents



Real Estate Investment Fund Management
  Contractual Agreements with Shanghai Tian Zhuo Advertising Co. Ltd.
  Agreements that Provide Effective Control over Our Affiliated Entities
 Equity Pledge Agreements.
 Exclusive Equity Transfer Call Agreement.
 Loan Agreements.
   60




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##### Table of Contents



Shareholder Voting Rights Proxy Agreement.
 Agreements that Transfer Economic Benefits to Us
 Consultancy Service Agreement.
 Shareholders Agreement
  Share Options
  Interests of Experts and Counsel
  
 ITEM 8. FINANCIAL INFORMATION
 Consolidated Statements and Other Financial Information
  Legal Proceedings
 
 Dividend Policy
   61




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##### Table of Contents



Significant Changes
  
 ITEM 9. THE OFFER AND LISTING
 Offering and Listing Details
    Sales Price ($)High
    
    
    Low2007 (from August 9)
    
    
    36.45
    
    
    
    12.26Fourth quarter
    
    
    36.45
    
    
    
    18.002008
    
    
    28.09
    
    
    
    4.00First quarter
    
    
    28.09
    
    
    
    10.05Second quarter
    
    
    18.38
    
    
    
    10.32Third quarter
    
    
    11.75
    
    
    
    6.69Fourth quarter
    
    
    8.87
    
    
    
    4.00October
    
    
    7.35
    
    
    
    4.51November
    
    
    6.94
    
    
    
    4.00December
    
    
    8.87
    
    
    
    5.182009First quarter
    
    
    8.80
    
    
    
    5.60January
    
    
    8.80
    
    
    
    5.60February
    
    
    7.88
    
    
    
    5.88March
    
    
    8.78
    
    
    
    6.02April
    
    
    13.09
    
    
    
    7.65May (through
May 1)
    
    
    12.80
    
    
    
    12.01
  62




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##### Table of Contents



Plan of Distribution
  Markets
 
 Selling Shareholders
  Dilution
  Expenses of the Issue
  
 ITEM 10. ADDITIONAL INFORMATION
 Share Capital
  Memorandum and Articles of Association
  Material Contracts
  Exchange Controls
  Taxation
  Cayman Islands Taxation
   63




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Peoples Republic of China Taxation
  United States Federal Income Taxation
   
    
    banks;
    
    insurance companies;
    
    regulated investment companies;
    
    real estate investment trusts;
    
    broker-dealers;
    
    traders that elect to mark-to-market;
    
    U.S. expatriates;
    
    tax-exempt entities;
    
    persons liable for alternative minimum tax;
    
    persons holding an ADS or ordinary share as part of a straddle, hedging, conversion
or integrated transaction;
    
    persons that actually or constructively own 10% or more of the total combined voting
power of all classes of our voting stock;
    
    persons who acquired ADSs or ordinary shares pursuant to the exercise of any
employee share option or otherwise as compensation; or
    
    persons holding ADSs or ordinary shares through partnerships or other pass-through
entities.
 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.
  64




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##### Table of Contents




    
    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.
    Taxation of Dividends and Other Distributions on the ADSs or Ordinary Shares
    65




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Taxation of Disposition of the ADSs or Ordinary Shares
  Passive Foreign Investment Company
  
    
    at least 75% of its gross income for such year is passive income, or
    
    at least 50% of the value of its assets (based on an average of the quarterly values
of the assets) during such year is attributable to assets that produce passive income
or are held for the production of passive income (the asset test).
    66




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##### Table of Contents




    
    the excess distribution or gain will be allocated ratably over your 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, will be treated
as ordinary income, and
    
    the amount allocated to each other year will be subject to the highest tax rate in
effect for individuals or corporations, as applicable, for each such year and the
interest charge generally applicable to underpayments of tax will be imposed on the
resulting tax attributable to each such year.
       67




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##### Table of Contents



Information Reporting and Backup Withholding
   Dividends and Paying Agents
  Statement by Experts
  Documents on Display
  www.ehousechina.com
     68




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##### Table of Contents



Subsidiary Information
  
 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
  Foreign Exchange Risk
   Inflation
  
 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
   69




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##### Table of Contents



PART II
 
 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
   
    
    the registration statement on Form F-1 (File number: 333-144451), or the IPO
Registration Statement for our initial public offering of 13,167,500 ADSs, representing
13,167,500 ordinary shares, which IPO Registration Statement was declared effective by
the SEC on August 8, 2007; and
    
    the registration statement on Form F-1 (File number: 333-148729), or the Follow-on
Registration Statement for our follow-on public offering of 6,000,000 ADSs,
representing 6,000,000 ordinary shares, which Follow-on Registration Statement was
declared effective by the SEC on January 31, 2008.
   
    
    approximately $3.0 million to fund capital expenditure;
 
    
    approximately $1.0 million to invest in our information and operational systems;
 
    
    approximately $130.0 million to expand our sales and marketing efforts; and
 
    
    approximately $15.9 million for general corporate purposes.
    
    
    approximately $5.8 million to fund capital expenditure;
 
    
    approximately $14.5 million to purchase properties held for sale;
 
    
    approximately $2.8 million to invest in our information and operational systems;
and
 
    
    approximately $76.6 million to expand our sales and marketing efforts.
  70




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ITEM 15. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Managements Annual Report on Internal Control over Financial Reporting
    Changes in Internal Control over Financial Reporting
  
 ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
 
 
 ITEM 16B. CODE OF ETHICS
   71




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##### Table of Contents



ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  For the Year Ended December 31,2007
    
    
    2008Audit fees(1)
    
    
    668,515
    
    
    
    1,020,648Audit-related fees(2)
    
    
    1,113,385
    
    
    
    374,073Tax fees(3)
    
    
    98,137
    
    
    
    22,219
 (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, which mainly included the
issuance of the audit and review of financial statements and other assurance services rendered
in connection with our initial public offering in 2007 and expenses incurred during 2007 for
our subsequent follow-on in January 2008.(3)
    
    Tax fees represents aggregate fees billed for professional services rendered by our
principal auditors for tax compliance, tax advice and tax planning. de minimis
 
 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  
 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.
  ApproximateTotal Number of
    
    
    Dollar Value ofShares Purchased
    
    
    Shares that MayTotal Number of
    
    
    Average Price Paid
    
    
    as Part of Publicly
    
    
    Yet Be PurchasedPeriod
    
    Shares Purchased
    
    
    Per Share(1)
    
    
    Announced Plans(2)
    
    
    Under the Plans(1)November 24-28
    
    
    524,575
    
    
    $
    5.52
    
    
    
    524,575
    
    
    $
    37,106,000December 1-31
    
    
    2,442,603
    
    
    $
    7.00
    
    
    
    2,442,603
    
    
    $
    20,000,000Total
    
    
    2,967,178
    
    
    $
    6.74
    
    
    
    2,967,178
    
    
    $
    20,000,000
 (1)
    
    Each of our ADSs represents one ordinary share.(2)
    
    We publicly announced two share repurchase plans in 2008. We announced the first plan on August 22, 2008, which plan
provided for the repurchase of up to $20.0 million of our ordinary shares and was completed on December 31, 2008. We
announced the second plan on December 29, 2008, which plan provides for the repurchase of up to an additional
$20.0 million of our ordinary shares and expires on December 29, 2009. 
 ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
  
 ITEM 16G. CORPORATE GOVERNANCE
   72




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PART III
 
 ITEM 17. FINANCIAL STATEMENTS
  
 ITEM 18. FINANCIAL STATEMENTS
  
 ITEM 19. EXHIBITS
 Exhibit Number
    
    Description of Document1.1
    
    
    Amended and Restated Memorandum and Articles of Association (incorporated by
reference to Exhibit 3.2 from our F-1 registration statement (File No. 333-148729),
as amended, initially filed with the Commission on January 17, 2008)4.1
    
    
    E-House Share Incentive Plan, as amended and restated on October 16, 2008
(incorporated by reference to Exhibit 10.1 from our S-8 registration statement (File
No. 333-148058), filed with the Commission on December 23, 2008)4.2
    *
    
    CRIC Share Incentive Plan adopted as of September 9, 20084.3
    
    
    Form of Indemnification Agreement with the Registrants directors (incorporated by
reference to Exhibit 10.2 from our F-1 registration statement (File No. 333-148729),
as amended, initially filed with the Commission on January 17, 2008)4.4
    
    
    Form of Employment Agreement with the Registrants senior executives (incorporated
by reference to Exhibit 10.3 from our F-1 registration statement (File No.
333-148729), as amended, initially filed with the Commission on January 17, 2008)4.5
    *
    
    Equity Pledge Agreement dated April 1, 2008 between Shanghai CRIC and Xin Zhou4.6
    *
    
    Exclusive Equity Transfer Call Agreement dated April 1, 2008 between Shanghai CRIC,
Tian Zhuo and Xin Zhou4.7
    *
    
    Loan Agreement dated March 10, 2008, between Shanghai CRIC and Xin Zhou4.8
    *
    
    Loan Agreement dated April 1, 2008 between Shanghai CRIC and Xin Zhou4.9
    *
    
    Loan Agreement dated April 1, 2008 between Tian Zhuo and Xin Zhou4.10
    *
    
    Loan Agreement dated September 8, 2008 between Shanghai CRIC and Xin Zhou4.11
    *
    
    Loan Agreement dated September 8, 2008 between Tian Zhuo and Xin Zhou4.12
    *
    
    Shareholder Voting Rights Proxy Agreement dated April 1, 2008 between Shanghai CRIC,
Tian Zhuo and Xin Zhou4.13
    *
    
    Consultancy Service Agreement dated April 1, 2008 between Shanghai CRIC and Tian Zhuo8.1
    *
    
    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. 333-144451), as amended,
initially filed with the Commission on July 10, 2007)12.1
    *
    
    CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
    *
    
    CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1
    *
    
    CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2
    *
    
    CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200223.1
    *
    
    Consent of Deloitte Touche Tohmatsu CPA Ltd.23.2
    *
    
    Consent of Jin Mao PRC Lawyers23.3
    *
    
    Consent of Fangda Partners
 
 *
    
    Filed with this Annual
Report on Form 20-F.  73




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##### Table of Contents



SIGNATURES
  E-HOUSE (CHINA) HOLDINGS LIMITEDBy:
    /s/ Xin ZhouName:
    Xin ZhouTitle:
    Chairman and Chief Executive Officer   74




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##### Table of Contents



E-HOUSE (CHINA) HOLDINGS LIMITED
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
 Reports of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2007 and 2008
    
    
    F-4Consolidated Statements of Operations for the Years Ended December 31, 2006, 2007 and 2008
    
    
    F-5Consolidated Statements of Shareholders Equity and Comprehensive Income for the Years Ended
December 31, 2006, 2007, and 2008
    
    
    F-6Consolidated Statements of Cash Flows for the Years Ended December 31, 2006, 2007 and 2008
    
    
    F-7Notes to Consolidated Financial Statements for the Years Ended December 31, 2006, 2007 and 2008
    
    
    F-9




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
  F-2




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
        
  F-3




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##### Table of Contents



E-HOUSE (CHINA) HOLDINGS LIMITED
 
 CONSOLIDATED BALANCE SHEETS
(In U.S. dollar except for share data)
 December 31,2007
    
    
    2008$
    
    
    $ASSETSCurrent assets:Cash and cash equivalents
    
    
    101,147,547
    
    
    
    225,663,324Restricted cash
    
    
    3,091,293
    
    
    
    23,930,951Marketable securities
    
    
    
    
    
    
    8,096,038Customer deposits, net of allowance for doubtful
accounts of nil and $438,942 at December 31, 2007
and 2008, respectively
    
    
    123,338,996
    
    
    
    71,855,522Unbilled accounts receivable, net of allowance for
doubtful accounts of nil and $1,628,326 at December
31, 2007 and 2008, respectively
    
    
    55,845,944
    
    
    
    83,617,483Accounts receivable, net of allowance for doubtful
accounts of $2,441,796 and $1,330,631 at December
31, 2007 and 2008, respectively
    
    
    11,166,552
    
    
    
    36,667,535Properties held for sale
    
    
    872,408
    
    
    
    1,064,789Deferred tax assets
    
    
    2,684,060
    
    
    
    3,815,688Prepaid expenses and other current assets
    
    
    7,066,549
    
    
    
    25,470,452Amounts due from related parties
    
    
    2,773,988
    
    
    
    749,074Total current assets
    
    
    307,987,337
    
    
    
    480,930,856Property and equipment, net
    
    
    6,502,380
    
    
    
    9,622,486Intangible assets, net
    
    
    3,098,525
    
    
    
    3,433,205Goodwill
    
    
    2,549,398
    
    
    
    7,457,763Investment in affiliates
    
    
    
    
    
    
    5,062,394Customer deposits, non-current portion
    
    
    7,886,672
    
    
    
    1,285,954Deferred tax assets, non-current portion
    
    
    447,254
    
    
    
    1,435,262Other non-current assets
    
    
    1,081,508
    
    
    
    10,685,625TOTAL ASSETS
    
    
    329,553,074
    
    
    
    519,913,545LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS EQUITYCurrent liabilities:Short-term borrowings
    
    
    6,845,000
    
    
    
    21,947,100Accounts payable
    
    
    1,556,785
    
    
    
    1,492,242Accrued payroll and welfare expenses
    
    
    12,631,639
    
    
    
    11,628,750Income tax payable
    
    
    17,880,163
    
    
    
    17,560,407Other tax payable
    
    
    5,567,513
    
    
    
    6,638,047Deposits payable
    
    
    
    
    
    
    39,212,152Amounts due to related parties
    
    
    2,572,399
    
    
    
    621,518Other current liabilities
    
    
    7,456,455
    
    
    
    9,572,417Total current liabilities
    
    
    54,509,954
    
    
    
    108,672,633Other non-current liabilities
    
    
    951,500
    
    
    
    4,250,907Total liabilities
    
    
    55,461,454
    
    
    
    112,923,540Commitments and contingencies (Note 22 )Minority interest
    
    
    2,918,600
    
    
    
    3,691,533Shareholders equity:Ordinary share ($0.001 par value): 1,000,000,000 and
1,000,000,000 shares authorized, 76,473,759 and
79,769,481 shares issued and outstanding, as of
December 31, 2007 and 2008, respectively
    
    
    76,474
    
    
    
    79,770Additional paid-in capital
    
    
    209,906,488
    
    
    
    301,812,186Retained earnings
    
    
    54,504,945
    
    
    
    85,296,056Accumulated other comprehensive income
    
    
    6,685,113
    
    
    
    16,110,460Total shareholders equity
    
    
    271,173,020
    
    
    
    403,298,472TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    
    329,553,074
    
    
    
    519,913,545
   F-4




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##### Table of Contents



E-HOUSE (CHINA) HOLDINGS LIMITED
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(In U.S. dollar except for share data)
 Years Ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Total revenues
    
    
    55,998,524
    
    
    
    121,016,600
    
    
    
    154,487,455Cost of revenues
    
    
    (10,243,968
    )
    
    
    (23,510,065
    )
    
    
    (31,855,848
    )Selling, general and administrative expenses
    
    
    (21,321,726
    )
    
    
    (45,545,800
    )
    
    
    (77,197,631
    )Income from operations
    
    
    24,432,830
    
    
    
    51,960,735
    
    
    
    45,433,976Other income (expense):Interest expense
    
    
    (594,488
    )
    
    
    (621,903
    )
    
    
    (2,420,468
    )Interest income
    
    
    206,378
    
    
    
    2,489,668
    
    
    
    3,062,513Other income, net
    
    
    168,015
    
    
    
    197,892
    
    
    
    1,970,481Income before taxes, equity in affiliates and minority interest
    
    
    24,212,735
    
    
    
    54,026,392
    
    
    
    48,046,502Income tax expense
    
    
    (5,751,102
    )
    
    
    (10,277,040
    )
    
    
    (8,712,558
    )Income before equity in affiliates and minority interest
    
    
    18,461,633
    
    
    
    43,749,352
    
    
    
    39,333,944Income from investment in affiliates
    
    
    
    
    
    
    
    
    
    
    153,700Minority interest
    
    
    (354,668
    )
    
    
    (2,023,537
    )
    
    
    88,380Net income
    
    
    18,106,965
    
    
    
    41,725,815
    
    
    
    39,576,024Earnings per share:Basic
    
    $
    0.27
    
    
    $
    0.62
    
    
    $
    0.48Diluted
    
    $
    0.27
    
    
    $
    0.56
    
    
    $
    0.48Shares used in computation:Basic
    
    
    50,000,000
    
    
    
    60,386,083
    
    
    
    81,818,972Diluted
    
    
    67,372,353
    
    
    
    74,555,709
    
    
    
    82,110,430
   F-5




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##### Table of Contents



E-HOUSE (CHINA) HOLDINGS LIMITED
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
AND COMPREHENSIVE INCOME
(In U.S. dollar)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    Total
    
    
    TotalPaid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Subscription
    
    
    Shareholders
    
    
    ComprehensiveOrdinary Shares
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Receivable
    
    
    Equity
    
    
    IncomeNumber
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance at January 1, 2006
    
    
    50,000,000
    
    
    
    50,000
    
    
    
    6,041,200
    
    
    
    (1,102,670
    )
    
    
    303,118
    
    
    
    (50,000
    )
    
    
    5,241,648
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,106,965
    
    
    
    
    
    
    
    
    
    
    
    18,106,965
    
    
    
    18,106,965Dividend declared ($0.08 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,025,165
    )
    
    
    
    
    
    
    
    
    
    
    (4,025,165
    )
    
    
    Dividend declared upon reorganization returned as
contributed capital
    
    
    
    
    
    
    
    
    
    
    12,341,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,341,300
    
    
    
    Collection of subscription receivable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    50,000
    
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    16,806
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,806
    
    
    
    Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    638,637
    
    
    
    
    
    
    
    638,637
    
    
    
    638,637Balance at December 31, 2006
    
    
    50,000,000
    
    
    
    50,000
    
    
    
    18,399,306
    
    
    
    12,979,130
    
    
    
    941,755
    
    
    
    
    
    
    
    32,370,191
    
    
    
    18,745,602Series A redeemable convertible preferred shares
converted into ordinary shares
    
    
    13,157,895
    
    
    
    13,158
    
    
    
    24,815,254
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,828,412
    
    
    
    Issuance of ordinary shares, net of issuance costs
    
    
    13,167,500
    
    
    
    13,168
    
    
    
    165,249,586
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    165,262,754
    
    
    
    Vesting of restricted shares
    
    
    148,364
    
    
    
    148
    
    
    
    489,453
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    489,601
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,725,815
    
    
    
    
    
    
    
    
    
    
    
    41,725,815
    
    
    
    41,725,815Adoption of FIN 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (200,000
    )
    
    
    
    
    
    
    
    
    
    
    (200,000
    )
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    952,889
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    952,889
    
    
    
    Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,743,358
    
    
    
    
    
    
    
    5,743,358
    
    
    
    5,743,358Balance at December 31, 2007
    
    
    76,473,759
    
    
    
    76,474
    
    
    
    209,906,488
    
    
    
    54,504,945
    
    
    
    6,685,113
    
    
    
    
    
    
    
    271,173,020
    
    
    
    47,469,173Issuance of ordinary shares, net of issuance costs
    
    
    6,000,000
    
    
    
    6,000
    
    
    
    97,392,482
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    97,398,482
    
    
    
    Repurchase of shares
    
    
    (2,848,278
    )
    
    
    (2,848
    )
    
    
    (10,563,338
    )
    
    
    (8,784,913
    )
    
    
    
    
    
    
    
    
    
    
    (19,351,099
    )
    
    
    Vesting of restricted shares
    
    
    144,000
    
    
    
    144
    
    
    
    475,056
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    475,200
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,576,024
    
    
    
    
    
    
    
    
    
    
    
    39,576,024
    
    
    
    39,576,024Share-based compensation
    
    
    
    
    
    
    
    
    
    
    4,601,498
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,601,498
    
    
    
    Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,425,347
    
    
    
    
    
    
    
    9,425,347
    
    
    
    9,425,347Balance at December 31, 2008
    
    
    79,769,481
    
    
    
    79,770
    
    
    
    301,812,186
    
    
    
    85,296,056
    
    
    
    16,110,460
    
    
    
    
    
    
    
    403,298,472
    
    
    
    49,001,371
   F-6




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##### Table of Contents



E-HOUSE (CHINA) HOLDINGS LIMITED
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollar)
 Years Ended December 31,2006
    
    
    2007
    
    
    2008$

    
    
    $

    
    
    $Operating activities:Net income
    
    
    18,106,965
    
    
    
    41,725,815
    
    
    
    39,576,024Adjustments to reconcile net income to net cash provided (used in) operating activities:Depreciation and amortization
    
    
    1,103,446
    
    
    
    2,328,527
    
    
    
    4,114,761Minority interest
    
    
    354,668
    
    
    
    2,023,537
    
    
    
    (88,380
    )Allowance for doubtful accounts
    
    
    29,795
    
    
    
    2,359,752
    
    
    
    2,583,853Share-based compensation
    
    
    16,806
    
    
    
    952,889
    
    
    
    4,601,498Others
    
    
    (311,250
    )
    
    
    196,084
    
    
    
    84,195Changes in operating assets and liabilities:Restricted cash
    
    
    
    
    
    
    (829,127
    )
    
    
    1,887,622Customer deposits
    
    
    (3,568,674
    )
    
    
    (121,452,918
    )
    
    
    56,359,296Accounts receivable
    
    
    (26,247,109
    )
    
    
    (31,388,959
    )
    
    
    (57,191,210
    )Marketable securities
    
    
    
    
    
    
    
    
    
    
    (8,096,038
    )Amounts due from related parties
    
    
    (170,623
    )
    
    
    (1,900,060
    )
    
    
    2,024,914Deferred taxes
    
    
    (299,468
    )
    
    
    (2,529,949
    )
    
    
    (1,131,628
    )Prepaid expenses and other current assets
    
    
    2,139,226
    
    
    
    2,190,645
    
    
    
    (5,610,975
    )Deferred taxes, non-current portion
    
    
    
    
    
    
    (411,861
    )
    
    
    (988,010
    )Other non-current assets
    
    
    
    
    
    
    (1,026,750
    )
    
    
    2,308,366Accounts payable
    
    
    (275,573
    )
    
    
    277,021
    
    
    
    (155,316
    )Accrued payroll and welfare expenses
    
    
    1,351,020
    
    
    
    8,532,783
    
    
    
    (1,108,809
    )Income tax payable
    
    
    4,003,333
    
    
    
    10,834,505
    
    
    
    (325,654
    )Other tax payable
    
    
    940,950
    
    
    
    2,951,409
    
    
    
    1,076,658Amounts due to related parties
    
    
    (445,375
    )
    
    
    1,621,999
    
    
    
    (1,475,685
    )Deposits payable
    
    
    
    
    
    
    
    
    
    
    39,212,152Other current liabilities
    
    
    682,020
    
    
    
    2,271,595
    
    
    
    315,506Net cash provided (used in) operating activities
    
    
    (2,589,843
    )
    
    
    (81,273,063
    )
    
    
    77,973,140Investing activities:Purchases of property and equipment
    
    
    (1,464,976
    )
    
    
    (4,287,825
    )
    
    
    (20,756,767
    )Purchase of subsidiaries, net of cash acquired
    
    
    (1,478,431
    )
    
    
    (568,640
    )
    
    
    (2,399,326
    )Prepayment for acquisition
    
    
    
    
    
    
    
    
    
    
    (1,594,823
    )Investment in affiliates
    
    
    
    
    
    
    
    
    
    
    (2,500,000
    )Purchase of minority interests of subsidiaries
    
    
    (72,995
    )
    
    
    (1,331,400
    )
    
    
    (65,999
    )Purchase of subsidiary upon reorganization
    
    
    (12,391,300
    )
    
    
    
    
    
    
    Proceeds from sale of property held for sale
    
    
    2,000,443
    
    
    
    627,027
    
    
    
    749,999Proceeds from disposal of property and equipment
    
    
    61,712
    
    
    
    16,597
    
    
    
    46,193Loans to related parties
    
    
    (2,370,948
    )
    
    
    
    
    
    
    Collection of loans to related parties
    
    
    3,092,911
    
    
    
    43,885
    
    
    
    Net cash provided (used in) investing activities
    
    
    (12,623,584
    )
    
    
    (5,500,356
    )
    
    
    (26,520,723
    )
  F-7




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##### Table of Contents



E-HOUSE (CHINA) HOLDINGS LIMITED
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollar)
 Years Ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Financing activities:Net proceeds from short-term borrowings
    
    
    
    
    
    
    
    
    
    
    42,482,100Repayment of short-term borrowings
    
    
    (381,700
    )
    
    
    (4,233,916
    )
    
    
    (27,380,000
    )Restricted cash-pledged accounts
    
    
    
    
    
    
    
    
    
    
    (22,727,280
    )Dividend paid
    
    
    (4,213,465
    )
    
    
    
    
    
    
    Advance from a related party
    
    
    
    
    
    
    1,440,001
    
    
    
    Contribution from minority shareholders
    
    
    37,353
    
    
    
    
    
    
    
    Dividend declared upon reorganization returned as contributed capital
    
    
    12,341,300
    
    
    
    
    
    
    
    Proceeds from issuance of preferred shares (net of issuance costs of $171,588)
    
    
    24,828,412
    
    
    
    
    
    
    
    Proceeds from collection of subscription receivable
    
    
    50,000
    
    
    
    
    
    
    
    Proceeds from issuance of ordinary shares, net of issuance costs of
$16,106,695 and $4,488,986, respectively
    
    
    
    
    
    
    165,612,754
    
    
    
    97,505,014Payment of initial public offering costs
    
    
    
    
    
    
    
    
    
    
    (220,804
    )Repurchase of shares
    
    
    
    
    
    
    
    
    
    
    (19,208,685
    )Dividends to minority interests
    
    
    
    
    
    
    (644,194
    )
    
    
    (346,937
    )Loans from related parties
    
    
    2,091,559
    
    
    
    1,264,698
    
    
    
    Repayment of loans from related parties
    
    
    (8,340,065
    )
    
    
    (1,331,797
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    26,413,394
    
    
    
    162,107,546
    
    
    
    70,103,408Effect of exchange rate changes
    
    
    393,545
    
    
    
    1,507,415
    
    
    
    2,959,952Net increase in cash and cash equivalents
    
    
    11,593,512
    
    
    
    76,841,542
    
    
    
    124,515,777Cash and cash equivalents at the beginning of the year
    
    
    12,712,493
    
    
    
    24,306,005
    
    
    
    101,147,547Cash and cash equivalents at the end of the year
    
    
    24,306,005
    
    
    
    101,147,547
    
    
    
    225,663,324Supplemental disclosure of cash flow information:Interest paid
    
    
    594,488
    
    
    
    621,903
    
    
    
    2,396,514Income taxes paid
    
    
    1,857,044
    
    
    
    3,559,865
    
    
    
    12,466,793Non-cash investing and financing activities:Acquisition of property held for sale  Accounts receivable
    
    
    
    
    
    
    859,850
    
    
    
    Advance payment for property held for sale  Accounts receivable
    
    
    
    
    
    
    
    
    
    
    1,098,721Acquisition of minority interest  Accounts payable
    
    
    114,928
    
    
    
    
    
    
    
    Capitalization of offering costs  other current liabilities
    
    
    
    
    
    
    350,000
    
    
    
    235,728Capitalization of costs for repurchase of shares  other current liabilities
    
    
    
    
    
    
    
    
    
    
    142,414Provision for FIN 48 uncertain tax positions
    
    
    
    
    
    
    200,000
    
    
    
    
   F-8




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##### Table of Contents



E-HOUSE (CHINA) HOLDINGS LIMITED
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2007 AND 2008
(In U.S. dollar)
 1. Organization and Principal Activities
     Date of
    
    
    Place of
    
    Percentage ofincorporation
    
    
    incorporation
    
    ownershipShanghai
Real Estate Consultant & Sales (Group) Co., Ltd.
    
    August 15, 2000
     
    
    PRC
    
    
    100
    %Shanghai City Rehouse Agent Consultants Co., Ltd.
    
    May 17, 2002
    
    
    PRC
    
    
    85
    %E-house Real Estate Asset Management Co.,Ltd.
    
    August 22, 2006
    
    
    Cayman
    
    
    51
    %CRIC (Shanghai) Information Technology Co., Ltd.
    
    July 3, 2006
    
    
    PRC
    
    
    100
    %Shanghai Tian Zhuo Advertising Co., Ltd.
    
    April 1, 2008
    
    
    PRC
    
    VIE
   2. Summary of Principal Accounting Policies
 (a) Basis of presentation
  (b) Basis of consolidation
   F-9




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##### Table of Contents



As of December 31, 2008Total assets
    
    
    14,738,217Total liabilities
    
    
    15,509,814
 (c) Use of estimates
  (d) Fair value of financial instruments
    F-10




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##### Table of Contents



(e) Business combinations
  (f) Cash and cash equivalents
  (g) Restricted Cash
  (h) Marketable securities
   F-11




---



##### Table of Contents



(i) Customer deposits
    (j) Unbilled accounts receivable
  (k) Properties held for sale
  (l) Investment in affiliates
  (m) Property and equipment, net
  Leasehold improvements
    
    Over the shorter of the lease term or their estimated useful livesBuildings
    
    30 yearsFurniture, fixtures and equipment
    
    5 yearsMotor vehicles
    
    5 years
  (n) Intangible assets, net
   F-12




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##### Table of Contents



(o) Impairment of long-lived assets
  (p) Impairment of goodwill and indefinite lived intangible assets
    (q) Income taxes
   (r) Share-based compensation
   F-13




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##### Table of Contents



(s) Revenue recognition
        (t) Cost of revenue
  (u) Advertising expenses
  (v) Foreign currency translation
   F-14




---



##### Table of Contents



(w) Government subsidies
  (x) Concentration of credit risk
    2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Balance as of January 1,
    
    
    35,892
    
    
    
    52,551
    
    
    
    2,441,796Provisions for doubtful accounts
    
    
    29,795
    
    
    
    2,359,752
    
    
    
    2,583,853Write offs
    
    
    (19,680
    )
    
    
    
    
    
    
    (1,691,021
    )Changes due to foreign exchange
    
    
    6,544
    
    
    
    29,493
    
    
    
    63,271Balance as of December 31,
    
    
    52,551
    
    
    
    2,441,796
    
    
    
    3,397,899
 (y) Earnings per Share
     F-15




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##### Table of Contents



Years Ended December 31,2006
    
    
    2007
    
    
    2008Net income attributable to ordinary shareholders  basic
    
    $
    13,437,979
    
    
    $
    37,263,701
    
    
    $
    39,576,024Amount allocated to Series A Shares for participating rights to dividends
    
    $
    4,668,986
    
    
    $
    4,462,114
    
    
    
    Net income attributable to ordinary shareholders  diluted
    
    $
    18,106,965
    
    
    $
    41,725,815
    
    
    $
    39,576,024Weighted average ordinary shares outstanding
    
    
    50,000,000
    
    
    
    60,386,083
    
    
    
    81,818,972Stock options
    
    
    
    
    
    
    397,393
    
    
    
    291,458Series A preferred shares
    
    
    17,372,353
    
    
    
    13,772,233
    
    
    
    Weighted average number of ordinary shares outstanding  diluted
    
    
    67,372,353
    
    
    
    74,555,709
    
    
    
    82,110,430Basic earnings per share
    
    $
    0.27
    
    
    $
    0.62
    
    
    $
    0.48Diluted earnings per share
    
    $
    0.27
    
    
    $
    0.56
    
    
    $
    0.48
 (z) Recently issued accounting pronouncements
      F-16




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##### Table of Contents



3. Properties Held for Sale
      F-17




---



##### Table of Contents



4. Prepaid expenses and other current assets
  As of December 312007
    
    
    2008$
    
    
    $Advance payment for advertising placement
    
    
    
    
    
    
    7,654,577Advance payment for properties
    
    
    
    
    
    
    7,829,165Prepaid expenses
    
    
    1,590,885
    
    
    
    1,987,959Others
    
    
    5,475,664
    
    
    
    8,109,747Allowance
    
    
    
    
    
    
    (110,996
    )Total
    
    
    7,066,549
    
    
    
    25,470,452
    5. Investments in Affiliated Companies
   6. Acquisitions of Subsidiaries and Minority Interest
    F-18




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##### Table of Contents



7. Property and Equipment, Net
  As of December 312007
    
    
    2008$
    
    
    $Leasehold improvements
    
    
    3,346,027
    
    
    
    4,815,820Buildings
    
    
    1,052,480
    
    
    
    1,124,993Furniture, fixtures and equipment
    
    
    3,839,130
    
    
    
    6,493,426Motor vehicles
    
    
    2,664,113
    
    
    
    4,130,132Total
    
    
    10,901,750
    
    
    
    16,564,371Less: Accumulated depreciation
    
    
    (4,399,370
    )
    
    
    (6,941,885
    )Property and equipment, net
    
    
    6,502,380
    
    
    
    9,622,486
  8. Intangible Assets, Net
 As of December 31,2007
    
    
    2008$
    
    
    $Intangible assets not subject to amortization
are comprised of the following:Trademark
    
    
    692,480
    
    
    
    698,133Intangible assets subject to amortization are comprised of the following:Customer contracts
    
    
    4,853,501
    
    
    
    5,192,903Non-compete agreements
    
    
    
    
    
    
    998,912Computer software licenses
    
    
    401,195
    
    
    
    850,9765,254,696
    
    
    
    7,042,791Less: Accumulated amortizationCustomer contracts
    
    
    (2,572,930
    )
    
    
    (3,951,845
    )Non-compete agreements
    
    
    
    
    
    
    Computer software licenses
    
    
    (275,721
    )
    
    
    (355,874
    )Intangible assets subject to amortization, net
    
    
    2,406,045
    
    
    
    2,735,072Total intangible assets, net
    
    
    3,098,525
    
    
    
    3,433,205
   F-19




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##### Table of Contents



9. Goodwill
  Secondary
    
    
    Real estateReal estate
    
    
    Consulting andPrimary real
    
    
    brokerage
    
    
    informationestate agency
    
    
    service
    
    
    serviceservice segment
    
    
    segment
    
    
    segment
    
    
    Others
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance as of January 1, 2007
    
    
    2,227,293
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,227,293Goodwill recognized upon acquisition
    
    
    100,067
    
    
    
    67,447
    
    
    
    
    
    
    
    
    
    
    
    167,514Exchange rate translation
    
    
    153,713
    
    
    
    878
    
    
    
    
    
    
    
    
    
    
    
    154,591Balance as of December 31, 2007
    
    
    2,481,073
    
    
    
    68,325
    
    
    
    
    
    
    
    
    
    
    
    2,549,398Goodwill recognized upon acquisition
    
    
    
    
    
    
    
    
    
    
    4,028,514
    
    
    
    674,847
    
    
    
    4,703,361Exchange rate translation
    
    
    200,305
    
    
    
    4,699
    
    
    
    
    
    
    
    
    
    
    
    205,004Balance as of December 31, 2008
    
    
    2,681,378
    
    
    
    73,024
    
    
    
    4,028,514
    
    
    
    674,847
    
    
    
    7,457,763
 10. Other non-current assets
  As of December 312007
    
    
    2008$
    
    
    $Advance payment for advertising placement, non-current portion (note 4)
    
    
    1,081,508
    
    
    
    2,889,702Advance payment for properties, non-current portion
    
    
    
    
    
    
    7,791,586Other non-current assets
    
    
    
    
    
    
    4,337Total
    
    
    1,081,508
    
    
    
    10,685,625
  11. Short-Term Borrowing
     F-20




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##### Table of Contents



12. Redeemable Convertible Preferred Shares
   Dividends
  Redemption
  Conversion
  Voting rights
  Liquidation preference
  13. Shares Split
   F-21




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##### Table of Contents



14. Repurchase of Shares
  15. Other Income
 Years Ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Gain from sale of investment
    
    
    142,058
    
    
    
    525,220
    
    
    
    Gain from sale of marketable securities
    
    
    25,957
    
    
    
    
    
    
    
    405,781Fund management fee
    
    
    
    
    
    
    339,181
    
    
    
    Financial subsidy
    
    
    
    
    
    
    
    
    
    
    1,247,468Reimbursement income from depository agent
    
    
    
    
    
    
    
    
    
    
    778,196Foreign exchange gain (loss)
    
    
    
    
    
    
    (666,509
    )
    
    
    (460,964
    )Total other income
    
    
    168,015
    
    
    
    197,892
    
    
    
    1,970,481
  16. Income Tax
  Years Ended December 312006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Current TaxPRC
    
    
    6,050,570
    
    
    
    13,127,387
    
    
    
    9,328,732Other
    
    
    
    
    
    
    
    
    
    
    1,549,5256,050,570
    
    
    
    13,127,387
    
    
    
    10,878,257Deferred TaxPRC
    
    
    (299,468
    )
    
    
    (2,850,347
    )
    
    
    (2,165,699
    )Other
    
    
    
    
    
    
    
    
    
    
    (299,468
    )
    
    
    (2,850,347
    )
    
    
    (2,165,699
    )Income tax expense
    
    
    5,751,102
    
    
    
    10,277,040
    
    
    
    8,712,558
     F-22




---



##### Table of Contents



F-23




---



##### Table of Contents



Unrecognized Tax Benefit  January 1, 2007
    
    $
    200,000Gross increases  tax positions in prior period
    
    
    Gross decreases  tax positions in prior period
    
    
    Gross increases  tax positions in current period
    
    
    Settlements
    
    
    Lapse of statute of limitations
    
    
    Unrecognized Tax Benefit  December 31, 2007
    
    $
    200,000Gross increases  tax positions in prior period
    
    
    Gross decreases  tax positions in prior period
    
    
    Gross increases  tax positions in current period
    
    
    Settlements
    
    
    Lapse of statute of limitations
    
    
    Unrecognized Tax Benefit  December 31, 2008
    
    $
    200,000
   As of December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Deferred tax assets:Accrued salary expenses
    
    
    348,505
    
    
    
    2,501,150
    
    
    
    1,682,580Bad debt provision
    
    
    58,575
    
    
    
    596,560
    
    
    
    740,439Start-up costs
    
    
    100,575
    
    
    
    63,554
    
    
    
    Decoration amortization
    
    
    33,576
    
    
    
    170,112
    
    
    
    154,013Advertising expenses
    
    
    
    
    
    
    14,625
    
    
    
    285,686Fair value assets step-up
    
    
    45,649
    
    
    
    43,110
    
    
    
    11,090Impairment for property held for sales
    
    
    
    
    
    
    10,663
    
    
    
    47,042Net operating loss carryforwards
    
    
    994,564
    
    
    
    1,746,906
    
    
    
    5,537,472Gross deferred tax assets
    
    
    1,581,444
    
    
    
    5,146,680
    
    
    
    8,458,322Valuation allowance
    
    
    (994,564
    )
    
    
    (2,015,366
    )
    
    
    (3,207,372
    )Total deferred tax assets
    
    
    586,880
    
    
    
    3,131,314
    
    
    
    5,250,950Analysis as:Current
    
    
    151,070
    
    
    
    2,684,060
    
    
    
    3,815,688Non-current
    
    
    435,810
    
    
    
    447,254
    
    
    
    1,435,262Deferred tax liabilities:Amortization of intangible and other assets
    
    
    1,151,919
    
    
    
    751,500
    
    
    
    705,980Total deferred tax liabilities
    
    
    1,151,919
    
    
    
    751,500
    
    
    
    705,980Analysis as:Current
    
    
    
    
    
    
    
    
    
    
    Non-current
    
    
    1,151,919
    
    
    
    751,500
    
    
    
    705,980
  F-24




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##### Table of Contents



2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Balance as of January 1,
    
    
    248,775
    
    
    
    994,564
    
    
    
    2,015,366Additions
    
    
    779,554
    
    
    
    1,005,463
    
    
    
    1,847,356Releases
    
    
    (42,097
    )
    
    
    (91,077
    )
    
    
    (827,828
    )Changes due to foreign exchange
    
    
    8,332
    
    
    
    106,416
    
    
    
    172,478Balance as of December 31,
    
    
    994,564
    
    
    
    2,015,366
    
    
    
    3,207,372
  Year Ended December 31,2006
    
    
    2007
    
    
    2008PRC income tax rate
    
    
    33.00
    %
    
    
    33.00
    %
    
    
    25.00
    %Expenses not deductible for tax purposes
    
    
    2.13
    %
    
    
    1.08
    %
    
    
    0.48
    %Investment income under equity method
    
    
    (1.09
    %)
    
    
    
    
    
    
    (0.14
    %)Tax exemption granted to group
    
    
    
    
    
    
    (1.66
    %)
    
    
    Effect of lower rates in certain domestic locations
    
    
    (12.11
    %)
    
    
    (14.35
    %)
    
    
    (9.13
    %)Effect of different tax rate of subsidiary operation in other jurisdiction
    
    
    (1.26
    %)
    
    
    (0.46
    %)
    
    
    (0.37
    %)Effect of new income tax law
    
    
    
    
    
    
    (0.70
    %)
    
    
    Valuation allowance movement
    
    
    3.08
    %
    
    
    2.11
    %
    
    
    2.23
    %23.75
    %
    
    
    19.02
    %
    
    
    18.07
    %
  Year Ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $The aggregate dollar
effect
    
    
    
    
    
    
    633,549
    
    
    
    Per share effect
basic
    
    
    
    
    
    
    0.01
    
    
    
    Per share
effectdiluted
    
    
    
    
    
    
    0.01
    
    
    
    
   17. Share-Based Compensation
    F-25




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##### Table of Contents



2006
    
    
    2007
    
    
    2008Average risk-free rate of return
    
    
    4.50
    %
    
    
    4.76
    %
    
    
    3.98
    %Weighted average expected option life
    
    10 years
    
    
    10 years
    
    
    10 yearsAverage estimated volatility rate
    
    
    49.0
    %
    
    
    62.7
    %
    
    
    59.3
    %Average dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %
      WeightedWeighted
    
    
    averageaverage
    
    
    remaining
    
    
    AggregateNumber of
    
    
    exercise
    
    
    contractual
    
    
    intrinsicoptions
    
    
    price
    
    
    term
    
    
    value of options$
    
    
    
    
    
    $Outstanding, as of January 1, 2008
    
    
    1,215,000
    
    
    
    5.40Granted
    
    
    1,356,000
    
    
    
    5.37Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (256,834
    )
    
    
    5.37Cancelled
    
    
    
    
    
    
    Outstanding, as of December 31, 2008.
    
    
    2,314,166
    
    
    
    5.39
    
    
    8.9 years
    
    
    6,278,673Vested and expected to vest as of December 31,
2008
    
    
    2,126,589
    
    
    
    5.39
    
    
    8.9 years
    
    
    5,766,588Exercisable as of December 31, 2008
    
    
    387,484
    
    
    
    5.40
    
    
    8.5 years
    
    
    1,044,831
  F-26




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##### Table of Contents



No. of
    
    
    Weighted averagerestricted shares
    
    
    grant-date fair value$Unvested as of January 1, 2008
    
    
    288,000
    
    
    
    1.39Granted
    
    
    
    
    
    
    Vested
    
    
    (144,000
    )
    
    
    1.39Forfeited
    
    
    
    
    
    
    Unvested as of December 31, 2008
    
    
    144,000
    
    
    
    1.39
     18. Employee Benefit Plans
  19. Distribution of Profits
    F-27




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##### Table of Contents



20. Segment Information
      Secondaryreal estate
    
    
    Real estatePrimary real
    
    
    brokerage
    
    
    consultingestate agency
    
    
    service
    
    
    and information2008
    
    service segment
    
    
    segment
    
    
    service segment
    
    
    Others
    
    
    Non-allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues from external customers
    
    
    90,492,009
    
    
    
    12,058,598
    
    
    
    49,815,916
    
    
    
    2,120,932
    
    
    
    
    
    
    
    154,487,455Cost of revenues
    
    
    (27,179,848
    )
    
    
    (1,725,941
    )
    
    
    (2,855,398
    )
    
    
    (94,661
    )
    
    
    
    
    
    
    (31,855,848
    )Selling, general and
administrative expenses
    
    
    (33,624,754
    )
    
    
    (20,209,062
    )
    
    
    (14,446,451
    )
    
    
    (2,109,633
    )
    
    
    (6,807,731
    )
    
    
    (77,197,631
    )Income/(loss) from operations
    
    
    29,687,407
    
    
    
    (9,876,405
    )
    
    
    32,514,067
    
    
    
    (83,362
    )
    
    
    (6,807,731
    )
    
    
    45,433,976Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,420,468
    )
    
    
    (2,420,468
    )Interest income
    
    
    551,545
    
    
    
    30,475
    
    
    
    416,769
    
    
    
    8,152
    
    
    
    2,055,572
    
    
    
    3,062,513Other income
    
    
    1,209,253
    
    
    
    22,483
    
    
    
    (1,110,367
    )
    
    
    
    
    
    
    1,849,112
    
    
    
    1,970,481Income before taxes, equity in
an associate and minority
interest
    
    
    31,448,205
    
    
    
    (9,823,447
    )
    
    
    31,820,469
    
    
    
    (75,210
    )
    
    
    (5,323,515
    )
    
    
    48,046,502Income tax expense
    
    
    (4,825,590
    )
    
    
    52,535
    
    
    
    (4,245,774
    )
    
    
    306,271
    
    
    
    
    
    
    
    (8,712,558
    )Income before equity in an
associate and minority interest
    
    
    26,622,615
    
    
    
    (9,770,912
    )
    
    
    27,574,695
    
    
    
    231,061
    
    
    
    (5,323,515
    )
    
    
    39,333,944Income from investment in
affiliated company
    
    
    
    
    
    
    
    
    
    
    153,700
    
    
    
    
    
    
    
    
    
    
    
    153,700Net income/(loss) after taxes
before minority interest
    
    
    26,622,615
    
    
    
    (9,770,912
    )
    
    
    27,728,395
    
    
    
    231,061
    
    
    
    (5,323,515
    )
    
    
    39,487,644
  F-28




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##### Table of Contents



Secondaryreal estate
    
    
    Real estatePrimary real
    
    
    brokerage
    
    
    consultingestate agency
    
    
    service
    
    
    and information2007
    
    service segment
    
    
    segment
    
    
    service segment
    
    
    Non-allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues from external customers
    
    
    100,541,226
    
    
    
    11,888,443
    
    
    
    8,586,931
    
    
    
    
    
    
    
    121,016,600Cost of revenues
    
    
    (22,859,701
    )
    
    
    
    
    
    
    (650,364
    )
    
    
    
    
    
    
    (23,510,065
    )Selling, general and
administrative expenses
    
    
    (23,777,560
    )
    
    
    (14,997,248
    )
    
    
    (4,402,954
    )
    
    
    (2,368,038
    )
    
    
    (45,545,800
    )Income/(loss) from operations
    
    
    53,903,965
    
    
    
    (3,108,805
    )
    
    
    3,533,613
    
    
    
    (2,368,038
    )
    
    
    51,960,735Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (621,903
    )
    
    
    (621,903
    )Interest income
    
    
    884,139
    
    
    
    36,274
    
    
    
    2,797
    
    
    
    1,566,458
    
    
    
    2,489,668Other income, net
    
    
    753,476
    
    
    
    96,372
    
    
    
    (503,849
    )
    
    
    (148,107
    )
    
    
    197,892Income before taxes and
minority interest
    
    
    55,541,580
    
    
    
    (2,976,159
    )
    
    
    3,032,561
    
    
    
    (1,571,590
    )
    
    
    54,026,392Income tax expense
    
    
    (10,312,711
    )
    
    
    (4,506
    )
    
    
    40,177
    
    
    
    
    
    
    
    (10,277,040
    )Net income/(loss) after taxes
before minority interest
    
    
    45,228,869
    
    
    
    (2,980,665
    )
    
    
    3,072,738
    
    
    
    (1,571,590
    )
    
    
    43,749,352
 Secondaryreal estate
    
    
    Real estatePrimary real
    
    
    brokerage
    
    
    consultingestate agency
    
    
    service
    
    
    and information2006
    
    service segment
    
    
    segment
    
    
    service segment
    
    
    Non-allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues from external customers
    
    
    45,708,032
    
    
    
    3,845,296
    
    
    
    6,445,196
    
    
    
    
    
    
    
    55,998,524Cost of revenues
    
    
    (10,062,254
    )
    
    
    
    
    
    
    (181,714
    )
    
    
    
    
    
    
    (10,243,968
    )Selling, general and
administrative expenses
    
    
    (13,397,110
    )
    
    
    (5,285,358
    )
    
    
    (703,026
    )
    
    
    (1,936,232
    )
    
    
    (21,321,726
    )Income/(Loss) from operations
    
    
    22,248,668
    
    
    
    (1,440,062
    )
    
    
    5,560,456
    
    
    
    (1,936,232
    )
    
    
    24,432,830Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (594,488
    )
    
    
    (594,488
    )Interest income
    
    
    188,888
    
    
    
    6,115
    
    
    
    11,375
    
    
    
    
    
    
    
    206,378Income/(Loss) before taxes and
minority interest
    
    
    22,605,571
    
    
    
    (1,433,947
    )
    
    
    5,571,831
    
    
    
    (2,530,720
    )
    
    
    24,212,735Income tax expense
    
    
    (5,751,102
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,751,102
    )Net income/(loss) after taxes
before minority interest
    
    
    16,854,469
    
    
    
    (1,433,947
    )
    
    
    5,571,831
    
    
    
    (2,530,720
    )
    
    
    18,461,633
 Geographic
  Major customers
  Years Ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Customer A
    
    
    *
    
    
    
    *
    
    
    
    32,498,047Customer B
    
    
    *
    
    
    
    25,478,208
    
    
    
    *Customer C
    
    
    *
    
    
    
    17,710,007
    
    
    
    *
 *
    
    indicates the revenue from these customers was less than 10% in the stated periods.  Years Ended December 31,2007
    
    
    2008$
    
    
    $Customer B
    
    
    *
    
    
    
    20,533,748Customer C
    
    
    16,240,944
    
    
    
    *
 *
    
    indicates the accounts receivables from the customer was less than 10% as at the stated year end.  F-29




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##### Table of Contents



Years Ended December 31,2007
    
    
    2008$
    
    
    $Customer A
    
    
    102,554,401
    
    
    
    29,262,800Customer C
    
    
    12,527,661
    
    
    
    Customer D
    
    
    
    
    
    
    14,631,400Customer E
    
    
    
    
    
    
    9,949,352
 21. Related Party Balances and Transactions
  As of December 31,2007
    
    
    2008$
    
    
    $Customer and supplier
    
    
    1,730,656
    
    
    
    386,857Other
    
    
    1,043,332
    
    
    
    362,217Total amounts due from related parties
    
    
    2,773,988
    
    
    
    749,074
  As of December 31,2007
    
    
    2008$
    
    
    $Management
    
    
    (950,401
    )
    
    
    (475,204
    )Other
    
    
    (1,621,998
    )
    
    
    (146,314
    )Total amounts due to related parties
    
    
    (2,572,399
    )
    
    
    (621,518
    )
 (a) Customer and supplier
  Years Ended December 31,2006
    
    
    2007
    
    
    2008$
    
    
    $
    
    
    $Revenue  Shanghai Yueshun Real Estate Development Co., Ltd.
    
    
    167,858
    
    
    
    2,801,505
    
    
    
    321Cost of revenues  Shanghai Xuyang Media Co., Ltd.
    
    
    (257,971
    )
    
    
    
    
    
    
    Selling and marketing expenses  Shanghai Xuyang Media Co., Ltd.
    
    
    (105,322
    )
    
    
    
    
    
    
    
 As of December 31,2007
    
    
    2008$
    
    
    $Accounts receivable  Shanghai Yueshun Real
Estate Development Co., Ltd.
    
    
    1,730,656
    
    
    
    386,857
  (b) Management
   F-30




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##### Table of Contents



(c) Affiliates
 As of December 312007
    
    
    2008$
    
    
    $Turbo Chance Co., Ltd. (1)
    
    
    704,421
    
    
    
    E-House Property Investment 1 (China) Limited (2)
    
    
    338,911
    
    
    
    362,217Total amounts due from other related parties
    
    
    1,043,332
    
    
    
    362,217E-House Property Investment 1 (China) Limited (2)
    
    
    (1,621,998
    )
    
    
    Shanghai Jin Yue Real Estate Development Co., Ltd. (3)
    
    
    
    
    
    
    (146,314
    )Total amounts payable to other related parties
    
    
    (1,621,998
    )
    
    
    (146,314
    )
  (1)
    
    Entity is controlled by Xin Zhou. The balance as of December 31, 2007 represents a prepaid
acquisition cost in connection with an acquisition with a third party of a secondary real
estate brokerage company in Hangzhou, for which the entity is acting as an intermediary. The
amount was intended to beapplied towards the acquisition of Hangzhou Cityrehouse Real Estate Broker Co., Ltd. (Hangzhou
Chenxin), which occurred in December 2007. Due to the foreign currency administration
restriction imposed by the PRC government, the amount due from Turbo Chance Co., Inc. of
HK$5,495,000 ($704,421) was not able to be applied to the acquisition of Hangzhou Chenxin. As
such, on January 12, 2008, Turbo Chance Co., Inc. repaid the amount due to the Group. The amount
is unsecured, interest free and has no fixed repayment term.(2)
    
    Entity is partially owned by Xin Zhou and Nanpeng Shen, directors of the Company. In
connection with a primary real estate project, the entity contributed 50% of the customer
deposit paid to the developer client and is entitled to 50% of the projects profits. For the
years ended December 31, 2007, E-House Property Investment 1 (China) Limited had earned
$1,621,998 from the project, all of which was recorded as cost of sales and was payable as of
December 31, 2007. The Company was entitled to $339,181 in fund management fees from the
project, all of which was recorded as other income and as a receivable as of December 31,
2007.(3)
    
    Xin Zhou is a director of the entity. The amount payable represents a loan to the Company.
The amount is unsecured, interest free and has no fixed repayment term. (d) Real Estate Investment Fund Management
  .
 (e) Other related party transactions
     F-31




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##### Table of Contents



22. COMMITMENTS AND CONTINGENCIES
 (a) Operating lease commitments
   Year ending December 31
    
    $2009
    
    
    9,491,0962010
    
    
    5,824,6952011
    
    
    2,508,6222012
    
    
    969,9122013
    
    
    243,265Total
    
    
    19,037,590
 (b) Contingencies
   23. Subsequent Events
     F-32




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##### Table of Contents



EXHIBIT INDEX
 Exhibit Number
    
    Description of Document1.1
    
    
    Amended and Restated Memorandum and Articles of Association (incorporated
by reference to Exhibit 3.2 from our F-1 registration statement (File No.
333-148729), as amended, initially filed with the Commission on January
17, 2008)4.1
    
    
    E-House Share Incentive Plan, as amended and restated on October 16, 2008
(incorporated by reference to Exhibit 10.1 from our S-8 registration
statement (File No. 333-148058), filed with the Commission on December 23,
2008)4.2
    *
    
    CRIC Share Incentive Plan adopted as of September 9, 20084.3
    
    
    Form of Indemnification Agreement with the Registrants directors
(incorporated by reference to Exhibit 10.2 from our F-1 registration
statement (File No. 333-148729), as amended, initially filed with the
Commission on January 17, 2008)4.4
    
    
    Form of Employment Agreement with the Registrants senior executives
(incorporated by reference to Exhibit 10.3 from our F-1 registration
statement (File No. 333-148729), as amended, initially filed with the
Commission on January 17, 2008)4.5
    *
    
    Equity Pledge Agreement dated April 1, 2008 between Shanghai CRIC and Xin
Zhou4.6
    *
    
    Exclusive Equity Transfer Call Agreement dated April 1, 2008 between
Shanghai CRIC, Tian Zhuo and Xin Zhou4.7
    *
    
    Loan Agreement dated March 10, 2008, between Shanghai CRIC and Xin Zhou4.8
    *
    
    Loan Agreement dated April 1, 2008 between Shanghai CRIC and Xin Zhou4.9
    *
    
    Loan Agreement dated April 1, 2008 between Tian Zhuo and Xin Zhou4.10
    *
    
    Loan Agreement dated September 8, 2008 between Shanghai CRIC and Xin Zhou4.11
    *
    
    Loan Agreement dated September 8, 2008 between Tian Zhuo and Xin Zhou4.12
    *
    
    Shareholder Voting Rights Proxy Agreement dated April 1, 2008 between
Shanghai CRIC, Tian Zhuo and Xin Zhou4.13
    *
    
    Consultancy Service Agreement dated April 1, 2008 between Shanghai CRIC
and Tian Zhuo8.1
    *
    
    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.
333-144451), as amended, initially filed with the Commission on July 10,
2007)12.1
    *
    
    CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
    *
    
    CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1
    *
    
    CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2
    *
    
    CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200223.1
    *
    
    Consent of Deloitte Touche Tohmatsu CPA Ltd.23.2
    *
    
    Consent of Jin Mao PRC Lawyers23.3
    *
    
    Consent of Fangda Partners
 
 *
    
    Filed with this Annual
Report on Form 20-F.  33