##### 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, 2010.
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
 Date of event requiring this shell company report
 For the transition period from  to
 Commission file number: 001-33616
 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)
  þ o
 o þ
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
  US GAAP þ
    
    International Financial Reporting Standards as issued
by the International Accounting Standards Board o
    
    Other o
  o o
 o þ
  o o




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##### 



TABLE OF CONTENTS
 INTRODUCTION
    
    
    1PART I
    
    
    2ITEM 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
    
    
    23ITEM 4A. UNRESOLVED STAFF COMMENTS
    
    
    41ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
    
    
    41ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
    
    
    64ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
    
    
    75ITEM 8. FINANCIAL INFORMATION
    
    
    85ITEM 9. THE OFFER AND LISTING
    
    
    85ITEM 10. ADDITIONAL INFORMATION
    
    
    87ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    92ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
    
    
    93PART II
    
    
    95ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
    
    
    95ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
    
    
    95ITEM 15. CONTROLS AND PROCEDURES
    
    
    95ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
    
    
    95ITEM 16B. CODE OF ETHICS
    
    
    96ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    96ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
    
    
    96ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
    
    
    96ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
    
    
    97ITEM 16G. CORPORATE GOVERNANCE
    
    
    97PART III
    
    
    97ITEM 17. FINANCIAL STATEMENTS
    
    
    97ITEM 18. FINANCIAL STATEMENTS
    
    
    97ITEM 19. EXHIBITS
    
    
    97Exhibit 8.1Exhibit 12.1Exhibit 12.2Exhibit 13.1Exhibit 13.2Exhibit 15.1Exhibit 15.2
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INTRODUCTION
  
    
    China or PRC refers to the Peoples Republic of China, excluding, for the
purpose of this annual report only, Taiwan, Hong Kong and Macau;
 
    
    CRIC system refers to our proprietary real estate information database and
analysis system;
 
    
    shares or ordinary shares refers to our ordinary shares, par value $0.001 per
share;
 
    
    ADSs refers to our American depositary shares, each of which represents one
ordinary share;
 
    
    primary real estate market refers to the market for newly constructed 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 existing residential and commercial real properties, 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
   
    
    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;
  1




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
    
    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 Years Ended December 31,2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010(in thousands of $, except share, per share and per ADS data)Consolidated Statement of Operations Data:Total revenues
    
    
    55,999
    
    
    
    121,016
    
    
    
    154,487
    
    
    
    299,538
    
    
    
    356,525Cost of revenues
    
    
    (10,244
    )
    
    
    (23,510
    )
    
    
    (31,856
    )
    
    
    (70,343
    )
    
    
    (104,846
    )Selling, general and administrative expenses
    
    
    (21,322
    )
    
    
    (45,546
    )
    
    
    (77,197
    )
    
    
    (125,721
    )
    
    
    (198,425
    )Gain from settlement of pre-existing relationship
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,101
    
    
    
    Income from operations
    
    
    24,433
    
    
    
    51,960
    
    
    
    45,434
    
    
    
    105,575
    
    
    
    53,254Net income
    
    
    18,462
    
    
    
    43,750
    
    
    
    39,488
    
    
    
    117,382
    
    
    
    48,676Less: net
income (loss) attributable to non-controlling interest
    
    
    355
    
    
    
    2,024
    
    
    
    (88
    )
    
    
    17,104
    
    
    
    12,522Net income attributable to E-House shareholders
    
    
    18,107
    
    
    
    41,726
    
    
    
    39,576
    
    
    
    100,278
    
    
    
    36,154Earnings per ordinary share and ADS(1):Basic
    
    $
    0.27
    
    
    $
    0.62
    
    
    $
    0.48
    
    
    $
    1.26
    
    
    $
    0.45Diluted
    
    $
    0.27
    
    
    $
    0.56
    
    
    $
    0.48
    
    
    $
    1.25
    
    
    $
    0.44Dividends per ordinary share:Basic
    
    
    0.08
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.25Weighted average number of ordinary shares used in per
share calculations:Basic
    
    
    50,000,000
    
    
    
    60,386,083
    
    
    
    81,818,972
    
    
    
    79,643,079
    
    
    
    80,287,171Diluted
    
    
    67,372,353
    
    
    
    74,555,709
    
    
    
    82,110,430
    
    
    
    80,456,210
    
    
    
    81,302,622Consolidated Balance Sheet Data:Cash and cash equivalents
    
    
    24,306
    
    
    
    101,148
    
    
    
    225,663
    
    
    
    548,062
    
    
    
    543,818Total assets
    
    
    89,430
    
    
    
    329,553
    
    
    
    519,913
    
    
    
    1,472,125
    
    
    
    1,558,267Total current liabilities
    
    
    28,751
    
    
    
    54,510
    
    
    
    108,672
    
    
    
    115,147
    
    
    
    140,099Mezzanine equity
    
    
    24,828
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total E-House shareholders equity
    
    
    32,370
    
    
    
    271,173
    
    
    
    403,298
    
    
    
    857,766
    
    
    
    901,100
 
 Note:
    
    (1) Each ADS represents one ordinary share. Exchange Rate Information
   Exchange RatePeriod
    
    Period End
    
    
    Average(1)
    
    
    Low
    
    
    High2006
    
    
    7.8041
    
    
    
    7.9579
    
    
    
    8.0702
    
    
    
    7.80412007
    
    
    7.2946
    
    
    
    7.5806
    
    
    
    7.8127
    
    
    
    7.29462008
    
    
    6.8225
    
    
    
    6.9193
    
    
    
    7.2946
    
    
    
    6.78002009
    
    
    6.8259
    
    
    
    6.8295
    
    
    
    6.8470
    
    
    
    6.81762010
    
    
    6.6000
    
    
    
    6.7603
    
    
    
    6.8102
    
    
    
    6.6000October
    
    
    6.6705
    
    
    
    6.6675
    
    
    
    6.6912
    
    
    
    6.6397November
    
    
    6.6670
    
    
    
    6.6537
    
    
    
    6.6906
    
    
    
    6.6233December
    
    
    6.6000
    
    
    
    6.6497
    
    
    
    6.6745
    
    
    
    6.60002011January
    
    
    6.6017
    
    
    
    6.5964
    
    
    
    6.6364
    
    
    
    6.5809February
    
    
    6.5713
    
    
    
    6.5761
    
    
    
    6.5965
    
    
    
    6.5520March
    
    
    6.5483
    
    
    
    6.5645
    
    
    
    6.5743
    
    
    
    6.5483April (through April 15, 2011)
    
    
    6.5317
    
    
    
    6.5382
    
    
    
    6.5477
    
    
    
    6.5310
 Source:
    Federal Reserve Statistical Release(1)
    
    Annual averages are calculated from month-end rates. Monthly averages are calculated
using the average of the daily rates during the relevant period.  3




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Capitalization and Indebtedness
  Reasons for the Offer and Use of Proceeds
  Risk Factors
 Risks Related to Our Business
 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.
    Our business may be materially and adversely affected by government measures aimed at Chinas real
estate industry.
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
    
    The down payment for the first self-use housing unit purchased by a family with a gross
construction area of more than 90 square meters must be no less than 30% of the
purchase price;
 
    
    The minimum down payment for the second housing unit purchased by a family is
increased from 40% to 50% and the loan interest rate must be no less than 110% of
benchmark lending interest rate;
 
    
    The down payment for the third or more housing unit purchased by any family and the loan
interest rate must be further increased significantly based on the rate for the first
and second housing units, as determined by commercial banks based on their assessment
of the risks;
 
    
    In regions where housing unit prices are too high or have risen too fast or supply
of housing units is insufficient, commercial banks may suspend extending loans to
families for their purchases of the third or more housing unit, and may suspend
extending loans to individuals for their purchase of housing units outside the region
where they reside if they cannot furnish evidence of their payment of tax or social
insurance premium for at least one year locally in the region where the subject housing
units are located; and
 
    
    Local governments are allowed to limit the total number of housing units one can
purchase during a certain period in light of the local situation.
  
    
    The minimum down payment for the second housing unit purchased by a family is
increased from 50% to 60% and the loan interest rate must be no less than 110% of
benchmark lending interest rate;
 
    
    The business tax is imposed and calculated on the full sales revenues for the sale
of all housing units held for less than five years, and on the difference between the
sales revenue and the amount paid for the housing unit for the sale of non-ordinary
housing units which were purchased five or more years ago;
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
    
    All municipalities directly under the central government, all provincial capitals
and other cities where the local housing prices are deemed to be too high or to have
risen too fast are required to temporarily suspend the sale of housing units
to families with registered local permanent residences that already own two or more
housing units, families without registered local permanent residences that already own
one or more housing units, and families without registered local permanent
residences that cannot provide evidence of their local payment of taxes or social
insurance premiums for a required period;
 
    
    Real property tax pilot projects were launched in Shanghai and Chongqing. Local
regulations require a real property tax to be imposed on certain local housing units
purchased on or after January 28, 2011, at a current tax rate of 0.6% in Shanghai and
at a tax rate ranging from 0.5% to 1.2% in Chongqing. In Chongqing, the real property
tax is also imposed on local independent houses owned by individuals; and
 
    
    In the circular promulgated by the General Office of the State Council on January
26, 2011, each citys government is required to appropriately set up and make public
its target for controlling the price of local, newly built, residential housing units in
2011. Accordingly, many cities, including Shanghai, Beijing, Chongqing and Shenzhen,
have already announced their respective price control targets for 2011.
   Continued monetary tightening by the Chinese central bank could have an adverse impact on Chinas
real estate industry
  A severe or prolonged downturn in the global or Chinese economy could materially and adversely
affect our business and our financial condition.
   6




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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.
  Failure to maintain or enhance our brands or image could have a material adverse effect on our
business and results of operations.
  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.
   7




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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.
    We may lose our competitive advantage if we fail to obtain and maintain accurate, comprehensive and
reliable data in our CRIC system or prevent disruptions or failure in the performance of our CRIC
system.
    8




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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.
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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.
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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.
   11




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If we fail to obtain or keep licenses, permits or approvals applicable to the various real estate
services provided by us or our direct and indirect PRC subsidiaries, 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.
   12




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Any natural or other disaster, including outbreaks of health epidemics, and other extraordinary
events could severely disrupt our business operations.
   Risks Related to Our Corporate Structure
 If
the PRC government finds that the agreements that establish the
structure for operating our
advertising services business and real estate online business in China do not comply with PRC
governmental restrictions on foreign investment in the advertising industry or the Internet
information service industry, we could be subject to severe penalties.
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
    
    revoking the business and operating licenses of our PRC subsidiaries and affiliates;
 
    
    discontinuing or restricting our PRC subsidiaries and affiliates operations;
 
    
    imposing fines or confiscating the income of our PRC subsidiaries or affiliates;
 
    
    imposing conditions or requirements with which we or our PRC subsidiaries and
affiliates may not be able to comply;
 
    
    requiring us or our PRC subsidiaries and affiliates to restructure the relevant
ownership structure or operations; or
 
    
    taking other regulatory or enforcement actions that could be harmful to our
business.
     14




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We rely on contractual arrangements with Tian Zhuo, Beijing Leju and their shareholders for a
portion of our operations, which may not be as effective as direct ownership in providing
operational control.
   Contractual arrangements we have entered into with Tian Zhuo and Beijing Leju may be subject to
scrutiny by the PRC tax authorities and a finding that we, Tian Zhuo or Beijing Leju owe additional
taxes could reduce our net income and the value of your investment.
  Risks Related to Doing Business in China
 Changes in PRC government policies could have a material adverse effect on overall economic growth
in China, which could adversely affect our business.
   15




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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.
     16




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Fluctuation in the value of the RMB may have a material adverse effect on your investment.
   PRC regulations relating to the establishment of offshore special purpose companies by PRC
residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or
penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC
subsidiaries ability to increase their registered capital or distribute profits to us, or may
otherwise adversely affect us.
    Failure to comply with PRC regulations regarding the registration requirements for employee stock
ownership plans or share option plans may subject the PRC plan participants or us to fines and
other legal or administrative sanctions.
   17




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PRC regulations relating to acquisitions in China may subject us to requisite approval by the
Ministry of Commerce 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.
    Our holding company relies principally on dividends and other distributions on equity paid by our
PRC subsidiaries to fund any cash and financing requirements it may have, and any limitation on the
ability of our PRC subsidiaries to make payments to our holding company could have a material
adverse effect on its ability to fund our operations, make investments or acquisitions, or pay
dividends.
   18




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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.
   The discontinuation of any of the preferential tax treatments currently available to us in the PRC
or imposition if any additional PRC taxes on us could  adversely affect our financial  condition and results of operations.
   Our business benefits from tax-related government incentives
and discretionary policies. Expiration of, or changes to, these incentives or policies could have a material adverse effect on
 our operating results.
  Dividends payable to us by our PRC subsidiaries may be subject to PRC withholding taxes, 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 PRC Enterprise Income Tax Law.
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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.
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Risks Related to Our ADSs
 The market price for our ADSs has been and may continue to be volatile.
  
    
    actual or anticipated fluctuations in our quarterly operating results;
 
    
    changes in financial estimates by securities research analysts;
 
    
    conditions in the real estate 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;
 
    
    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.
  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.
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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 our holding company is incorporated under
Cayman Islands law, conduct substantially all of our operations in China and all of our officers
reside outside the United States.
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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
      23




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Business Overview
 Overview
     Our Services
  
    
    primary real estate agency services,
 
    
    secondary real estate brokerage services,
 
    
    real estate information and consulting services,
 
    
    real estate advertising services,
 
    
    real estate promotional event services,
 
    
    real estate online services, and
 
    
    real estate investment fund management.
  24




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Primary Real Estate Agency Services
  For the Year Ended December 31,2008
    
    
    2009
    
    
    2010Total GFA of new properties sold (thousands of square meters)
    
    
    4,115
    
    
    
    11,098
    
    
    
    11,935Total value
of new properties sold (millions of RMB)
    
    
    31,620
    
    
    
    86,975
    
    
    
    106,176
       25




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Secondary Real Estate Brokerage Services
     Real Estate Information and Consulting Services
  Real Estate Information Services
  26




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Real Estate Consulting Services
 Real Estate Advertising Services
  Real Estate Promotional Event Services
  Real Estate Online Services
    Real Estate Investment Fund Management
   27




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Marketing and Brand Promotion
  Advertisements
 Seminars and Workshops
 E-House Membership Club
 Seasonality
  Competition
   28




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sohu.com soufun.com anjuke.com
  Employees and Training
      29




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Facilities
  Legal Proceedings
  Regulation
  Regulation of Real Estate Services Industry
  Regulation on the Establishment and Operation of Real Estate Services Companies
   Foreign Investments in the Real Estate Consulting Business and Real Estate Brokerage Business
  Regulation of Real Estate Agency Companies and Agents
   30




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Regulation of Real Estate Intermediary Service Charges
    Regulations on Internet Information Services
      32




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Limitations on Foreign Ownership in Internet Information Services Industry
    
    
    CRIC is able to exert effective control over Beijing Leju;
 
    
    a substantial portion of the economic benefits of Beijing Leju are transferred to
CRIC; and
 
    
    CRIC has an exclusive option to purchase all of the equity interests in Beijing Leju
to the extent permitted by PRC law.
     33




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Information Security and Confidentiality of User Information
    Certain Licenses and Approvals Required for Internet-Based Businesses
  Internet Publishing
  Online News Publishing
  Online Transmission of Audio-Visual Programs
   34




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Online Cultural Activities
  Regulations on Advertising Services
 Limitations on Foreign Ownership in the Advertising Industry
   
    
    CRIC is 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 CRIC; and
 
    
    CRIC has an exclusive option to purchase all of the equity interests in Tian Zhuo to
the extent permitted by PRC law.
  35




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Advertising Services
  Advertising Content
   36




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Operational Matters of the Advertising Business
  Regulations on Software Development Activities
  Regulations on Intellectual Property Rights
 Trademarks
   37




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Copyrights
  Trade Secrets
  Regulations on Foreign Currency Exchange
    38




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##### Table of Contents



Regulations
on Foreign Exchange Registration of Offshore Investments by PRC
Residents
  Regulations on Loans to and Direct Investment in PRC Entities by Offshore Holding Companies
    Regulations on Employee Share Options
   39




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##### Table of Contents



Regulations on Dividend Distribution
   40




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##### Table of Contents



Organizational Structure
  
 (1)
    
    Tian Zhuo is a variable interest entity established in China in 2008
and is 90% owned by Mr. Xin Zhou, our executive chairman, and 10%
owned by Mr. Xudong Zhu. We effectively control Tian Zhuo through
contractual arrangements. See Item 7. Major Shareholders and Related
Party TransactionsB. Related Party TransactionsContractual
Agreements with Tian Zhuo.(2)
    
    Beijing Leju is a variable interest entity established in China in
2008 and is 80% owned by Mr. Xudong Zhu and 20% owned by Mr. Jun Luo.
We effectively control Beijing Leju through contractual arrangements.
See Item 7. Major Shareholders and Related Party TransactionsB.
Related Party TransactionsContractual Agreements with Beijing Leju. Property, Plants and Equipment
  
 ITEM 4A. UNRESOLVED STAFF COMMENTS
  
 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
   41




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Operating Results
 Overview
   Factors Affecting Our Results of Operations
  Revenues
  42




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##### Table of Contents



For The Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    %
    
    
    $
    
    
    %
    
    
    $
    
    
    %Revenues:Primary real estate agency services
    
    
    88,602
    
    
    
    57.4
    
    
    
    183,154
    
    
    
    61.2
    
    
    
    173,082
    
    
    
    48.5Secondary real estate brokerage services
    
    
    14,837
    
    
    
    9.6
    
    
    
    28,448
    
    
    
    9.5
    
    
    
    20,892
    
    
    
    5.9Real estate consulting and information services
    
    
    49,116
    
    
    
    31.8
    
    
    
    61,707
    
    
    
    20.6
    
    
    
    75,110
    
    
    
    21.1Real estate online services
    
    
    
    
    
    
    
    
    
    
    13,830
    
    
    
    4.6
    
    
    
    66,805
    
    
    
    18.7Other services
    
    
    1,932
    
    
    
    1.2
    
    
    
    12,400
    
    
    
    4.1
    
    
    
    20,636
    
    
    
    5.8Total revenues
    
    
    154,487
    
    
    
    100.0
    
    
    
    299,539
    
    
    
    100.0
    
    
    
    356,525
    
    
    
    100.0
 Primary Real Estate Agency Services.
    
    
    total GFA of the properties we sell;
 
    
    total transaction value of the properties we sell; and
 
    
    commission rates.
  43




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Secondary Real Estate Brokerage Services
  Real Estate Information and Consulting Services
    44




---



##### Table of Contents



Real Estate Online Services
 Real Estate Advertising Services
 Real Estate Promotional Event Services
 Real Estate Fund Management
 Cost of Revenues
  45




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##### Table of Contents



Selling, General and Administrative Expenses
 Share-based Compensation Expenses
  Options
 Number of OrdinaryShares Underlying
    
    
    ExerciseGrant Date
    
    Options Granted
    
    
    PriceMarch 9, 2007
    
    
    143,400
    
    
    $
    5.50July 17, 2007
    
    
    245,122
    
    
    $
    5.37
    (1)July 23, 2007
    
    
    66,666
    
    
    $
    5.37
    (1)January 7, 2008
    
    
    268,169
    
    
    $
    5.37
    (1)January 10, 2008
    
    
    7,502
    
    
    $
    5.37
    (1)April 15, 2008
    
    
    530,553
    
    
    $
    5.37
    (1)June 12, 2008
    
    
    3,334
    
    
    $
    5.37
    (1)August 3, 2008
    
    
    100,000
    
    
    $
    5.37
    (1)
 (1)
    
    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 incentive 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.  46




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##### Table of Contents



Restricted shares
 Number of Restricted
    
    
    GrantGrant Date
    
    Shares Granted
    
    
    PriceMay 16, 2007
    
    
    
    (1)
    
    $
    3.30December 21, 2009
    
    
    602,701
    
    
    $
    0November 24, 2010
    
    
    365,000
    
    
    $
    0December 1, 2010
    
    
    598,000
    
    
    $
    0March 18, 2011
    
    
    28,000
    
    
    $
    0
 (1)
    
    On May 16, 2007, options to purchase 436,364
ordinary shares granted earlier on November 28,
2006 were surrendered for cancellation in exchange
for the same number of restricted shares having the
same vesting schedule and a purchase price equal to
the original option exercise price.   
    
    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.
    
    
    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.
  47




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##### Table of Contents



Options
 Number of OrdinaryShares Underlying
    
    
    ExerciseGrant Date
    
    Options Granted
    
    
    PriceJanuary 1, 2009
    
    
    4,707,698
    (1)
    
    $
    3.00July 15, 2009
    
    
    900,290
    
    
    $
    6.00July 30, 2009
    
    
    300,000
    
    
    $
    6.00September 24, 2009
    
    
    1,269,501
    
    
    $
    8.00March 10, 2011
    
    
    2,782,000
    
    
    $
    7.02
 (1)
    
    Options to purchase 756,000 ordinary shares granted on
January 1, 2009 were later modified on July 15, 2009.
The number of these options was reduced to 251,500 and
the vesting schedule was shortened to one to two years
from two to four year. Restricted shares
 Number of Restricted
    
    
    GrantGrant Date
    
    Shares Granted
    
    
    PriceJuly 30, 2009
    
    
    125,000
    (1)
    
    $
    3.00July 30, 2009
    
    
    37,500
    (2)
    
    $
    6.00
 (1)
    
    On July 30, 2009, options to purchase 250,000
ordinary shares granted earlier on January 1, 2009
were surrendered for cancellation in exchange for
the same number of restricted shares having the
same vesting schedule and a purchase price equal to
the original option exercise price.(2)
    
    On July 30, 2009, options to purchase 50,000
ordinary shares granted earlier on July 15, 2009
were surrendered for cancellation in exchange for
the same number of restricted shares having the
same vesting schedule and a purchase price equal to
the original option exercise price.   48




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##### Table of Contents



Taxation
          49




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##### Table of Contents



Critical Accounting Policies
   Revenue Recognition
       50




---



##### Table of Contents



51




---



##### Table of Contents



Variable Interest Entities
   Share-Based Compensation
   Goodwill Valuation
      52




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##### Table of Contents



Income Taxes
  Results of Operations
  For the Years Ended December 31,2008
    
    
    2009
    
    
    2010Consolidated Statement of Operations Data:Revenues
    
    
    154,487
    
    
    
    299,538
    
    
    
    356,525Cost of revenues
    
    
    (31,856
    )
    
    
    (70,343
    )
    
    
    (104,846
    )Selling, general and administrative expenses
    
    
    (77,197
    )
    
    
    (125,721
    )
    
    
    (198,425
    )Gain from settlement of pre-existing relationship
    
    
    
    
    
    
    2,101
    
    
    
    Income from operations
    
    
    45,434
    
    
    
    105,575
    
    
    
    53,254Interest expense
    
    
    (2,420
    )
    
    
    (216
    )
    
    
    Interest income
    
    
    3,063
    
    
    
    1,039
    
    
    
    2,808Other income, net
    
    
    1,970
    
    
    
    8,780
    
    
    
    5,589Income before taxes, equity in affiliates and non-controlling interest
    
    
    48,047
    
    
    
    115,178
    
    
    
    61,651Income tax expenses
    
    
    (8,713
    )
    
    
    (19,924
    )
    
    
    (12,696
    )Income before equity in affiliates and non-controlling interest
    
    
    39,334
    
    
    
    95,254
    
    
    
    48,955Income from equity in affiliates
    
    
    154
    
    
    
    22,128
    
    
    
    (279
    )Net income
    
    
    39,488
    
    
    
    117,382
    
    
    
    48,676Less: Net income (loss) attributable to non-controlling interest
    
    
    (88
    )
    
    
    17,104
    
    
    
    12,522Net income attributable to E-House shareholders
    
    
    39,576
    
    
    
    100,278
    
    
    
    36,154
  53




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##### Table of Contents



Segment Information
    Real estateSecondary
    
    
    informationPrimary real
    
    
    real estate
    
    
    and
    
    
    Real estateestate agency
    
    
    brokerage
    
    
    consulting
    
    
    online
    
    
    Other
    
    
    Non-2010
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues
    
    
    173,081,747
    
    
    
    20,892,641
    
    
    
    75,110,282
    
    
    
    66,804,671
    
    
    
    20,635,786
    
    
    
    
    
    
    
    356,525,127Cost of revenues
    
    
    (62,946,388
    )
    
    
    (890,545
    )
    
    
    (3,016,516
    )
    
    
    (26,361,391
    )
    
    
    (11,631,655
    )
    
    
    
    
    
    
    (104,846,495
    )Selling general and
administrative
expenses
    
    
    (46,975,421
    )
    
    
    (29,429,044
    )
    
    
    (35,214,081
    )
    
    
    (54,741,152
    )
    
    
    (8,978,057
    )
    
    
    (23,087,167
    )
    
    
    (198,424,922
    )Income (loss) from operations
    
    
    63,159,938
    
    
    
    (9,426,948
    )
    
    
    36,879,685
    
    
    
    (14,297,872
    )
    
    
    26,074
    
    
    
    (23,087,167
    )
    
    
    53,253,710Interest income
    
    
    1,035,826
    
    
    
    35,213
    
    
    
    1,156,337
    
    
    
    286,154
    
    
    
    114,293
    
    
    
    180,008
    
    
    
    2,807,831Other income (expense), net
    
    
    1,845,960
    
    
    
    195,509
    
    
    
    2,360,398
    
    
    
    (22,831
    )
    
    
    726,952
    
    
    
    483,181
    
    
    
    5,589,169Income (loss) before taxes and
equity in affiliates
    
    
    66,041,724
    
    
    
    (9,196,226
    )
    
    
    40,396,420
    
    
    
    (14,034,549
    )
    
    
    867,319
    
    
    
    (22,423,978
    )
    
    
    61,650,710Income tax benefit (expense)
    
    
    (9,987,481
    )
    
    
    334,285
    
    
    
    (2,911,786
    )
    
    
    455,815
    
    
    
    (587,067
    )
    
    
    
    
    
    
    (12,696,234
    )Income (loss) before equity in
affiliates
    
    
    56,054,243
    
    
    
    (8,861,941
    )
    
    
    37,484,634
    
    
    
    (13,578,734
    )
    
    
    280,252
    
    
    
    (22,423,978
    )
    
    
    48,954,476Loss from equity in
affiliates
    
    
    (2,277
    )
    
    
    
    
    
    
    (271,300
    )
    
    
    (5,085
    )
    
    
    
    
    
    
    
    
    
    
    (278,662
    )Net income (loss)
    
    
    56,051,966
    
    
    
    (8,861,941
    )
    
    
    37,213,334
    
    
    
    (13,583,819
    )
    
    
    280,252
    
    
    
    (22,423,978
    )
    
    
    48,675,814
  54




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##### Table of Contents



Real estatePrimary
    
    
    Secondary
    
    
    informationreal estate
    
    
    real estate
    
    
    and
    
    
    Real estateagency
    
    
    brokerage
    
    
    consulting
    
    
    online
    
    
    Other
    
    
    Non-2009
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues
    
    
    183,154,000
    
    
    
    28,447,714
    
    
    
    61,707,295
    
    
    
    13,829,937
    
    
    
    12,399,710
    
    
    
    
    
    
    
    299,538,656Cost of revenues
    
    
    (55,655,737
    )
    
    
    (1,877,546
    )
    
    
    (1,865,697
    )
    
    
    (4,930,280
    )
    
    
    (6,014,185
    )
    
    
    
    
    
    
    (70,343,445
    )Selling general and administrative
expenses
    
    
    (47,241,533
    )
    
    
    (26,123,163
    )
    
    
    (22,723,019
    )
    
    
    (11,359,944
    )
    
    
    (6,338,251
    )
    
    
    (11,935,269
    )
    
    
    (125,721,179
    )Gain from settlement of
preexisting
relationship
    
    
    
    
    
    
    
    
    
    
    2,100,832
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,100,832Income (loss) from operations
    
    
    80,256,730
    
    
    
    447,005
    
    
    
    39,219,411
    
    
    
    (2,460,287
    )
    
    
    47,274
    
    
    
    (11,935,269
    )
    
    
    105,574,864Interest expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (215,854
    )
    
    
    (215,854
    )Interest income
    
    
    591,772
    
    
    
    29,130
    
    
    
    166,521
    
    
    
    23,722
    
    
    
    29,557
    
    
    
    198,087
    
    
    
    1,038,789Other income(expense), net
    
    
    1,842,672
    
    
    
    279,030
    
    
    
    2,481,451
    
    
    
    5,814
    
    
    
    (1,810
    )
    
    
    4,173,213
    
    
    
    8,780,370Income (loss) before taxes and
equity in affiliates
    
    
    82,691,174
    
    
    
    755,165
    
    
    
    41,867,383
    
    
    
    (2,430,751
    )
    
    
    75,021
    
    
    
    (7,779,823
    )
    
    
    115,178,169Income tax benefit (expense)
    
    
    (15,981,753
    )
    
    
    2,204,395
    
    
    
    (6,710,032
    )
    
    
    957,085
    
    
    
    (393,776
    )
    
    
    
    
    
    
    (19,924,081
    )Income (loss) before equity in
affiliates
    
    
    66,709,421
    
    
    
    2,959,560
    
    
    
    35,157,351
    
    
    
    (1,473,666
    )
    
    
    (318,755
    )
    
    
    (7,779,823
    )
    
    
    95,254,088Income from
equity in
affiliates
    
    
    112,628
    
    
    
    
    
    
    
    
    
    
    
    22,015,607
    
    
    
    
    
    
    
    
    
    
    
    22,128,235Net income (loss)
    
    
    66,822,049
    
    
    
    2,959,560
    
    
    
    35,157,351
    
    
    
    20,541,941
    
    
    
    (318,755
    )
    
    
    (7,779,823
    )
    
    
    117,382,323
 Real estateSecondary
    
    
    informationPrimary real
    
    
    real estate
    
    
    andestate agency
    
    
    brokerage
    
    
    consulting
    
    
    
    
    
    
    Non-2008
    
    services
    
    
    services
    
    
    services
    
    
    Other services
    
    
    allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues
    
    
    88,601,982
    
    
    
    14,836,943
    
    
    
    49,116,061
    
    
    
    1,932,469
    
    
    
    
    
    
    
    154,487,455Cost of revenues
    
    
    (27,232,660
    )
    
    
    (1,725,941
    )
    
    
    (2,855,398
    )
    
    
    (41,849
    )
    
    
    
    
    
    
    (31,855,848
    )Selling, general and administrative
expenses
    
    
    (34,075,314
    )
    
    
    (20,209,062
    )
    
    
    (13,776,504
    )
    
    
    (2,329,020
    )
    
    
    (6,807,731
    )
    
    
    (77,197,631
    )Income (loss) from operations
    
    
    27,294,008
    
    
    
    (7,098,060
    )
    
    
    32,484,159
    
    
    
    (438,400
    )
    
    
    (6,807,731
    )
    
    
    45,433,976Interest expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,420,468
    )
    
    
    (2,420,468
    )Interest income
    
    
    551,576
    
    
    
    30,475
    
    
    
    415,512
    
    
    
    8,152
    
    
    
    2,056,798
    
    
    
    3,062,513Other income (expense), net
    
    
    1,422,744
    
    
    
    22,483
    
    
    
    (1,323,858
    )
    
    
    
    
    
    
    1,849,112
    
    
    
    1,970,481Income (loss) before taxes and
equity in affiliates
    
    
    29,268,328
    
    
    
    (7,045,102
    )
    
    
    31,575,813
    
    
    
    (430,248
    )
    
    
    (5,322,289
    )
    
    
    48,046,502Income tax benefit (expense)
    
    
    (4,153,861
    )
    
    
    52,535
    
    
    
    (4,917,503
    )
    
    
    306,271
    
    
    
    
    
    
    
    (8,712,558
    )Income (loss) before equity in
affiliates
    
    
    25,114,467
    
    
    
    (6,992,567
    )
    
    
    26,658,310
    
    
    
    (123,977
    )
    
    
    (5,322,289
    )
    
    
    39,333,944Income from
equity in
affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    153,700
    
    
    
    153,700Net income (loss)
    
    
    25,114,467
    
    
    
    (6,992,567
    )
    
    
    26,658,310
    
    
    
    (123,977
    )
    
    
    (5,168,589
    )
    
    
    39,487,644
  55




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##### Table of Contents



Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
 Revenues
 
    
    Primary Real Estate Agency Services. Revenues from our primary real estate agency
services decreased by 5% from $183.2 million in 2009 to $173.1 million in 2010. This
decrease was primarily due to a decrease in the average commission rate from 1.4% in
2009 to 1.1% in 2010.
 
    
    Secondary Real Estate Brokerage Services. Revenues from our secondary real estate
brokerage services decreased by 27% from $28.4 million in 2009 to $20.9 million in
2010. This decrease was primarily due to lower secondary real estate transaction volume
as a result of government policies to discourage real estate transactions.
 
    
    Real Estate Information and Consulting Services. Revenues from real estate
information and consulting services increased by 22% from $61.7 million in 2009 to
$75.1 million in 2010. The increase was primarily due to an increased number of
subscribers to the CRIC database and more demand for the CRICs customized real estate
reports in 2010.
 
    
    Real Estate Online Services. Revenues from real estate online services increased by
383% from $13.8 million in 2009 to $66.8 million in 2010, mainly due to substantial
gains in market share in all major cities after CRIC acquired its online business in
October 2009.
 
    
    Other Services. Revenues from other services, including real estate advertising
services, promotional event services and real estate fund management, increased by 66%
from $12.4 million in 2009 to $20.6 million in 2010. The increase was attributable to
growth in real estate fund management as well as revenues contributed by Shanghai Dehu,
a real estate promotional event provider that we acquired in the second quarter of
2010.
 Cost of Revenues
 Selling, General and Administrative Expenses
 
    
    Primary Real Estate Agency Services. Selling, general and administrative expenses
for our primary real estate agency services decreased by 1% from $47.2 million in 2009
to $47.0 million in 2010
which is consistent with the decrease of the primary real estate
agency services revenue in 2010.
 
    
    Secondary Real Estate Brokerage Services. Selling, general and administrative
expenses for our secondary real estate brokerage services increased by 13% from $26.1
million in 2009 to $29.4 million in 2010. This increase was primarily due to an
increase in staff salaries as a result of our larger staff size and an increase in
rental expenses as a result of an increase in the number of our secondary real estate
brokerage stores during the year ended December 31, 2010.
  56




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##### Table of Contents




    
    Real Estate Information and Consulting Services. Selling, general and administrative
expense for our real estate information and consulting services increased by 55% from
$22.7 million in 2009 to $35.2 million in 2010, mainly due to salary, commission,
bonus, consultant and travel expenses associated with the expansion of our real estate
information and consulting services.
 
    
    Real Estate Online Services. CRIC acquired COHT, the entity which had operated
SINAs real estate online business, in October 2009. $11.4 million of our selling,
general and administrative expenses in 2009 was attributable to the acquired real
estate online business in the fourth quarter of 2009 as compared to $54.7 million in full year 2010.
 
    
    Other Services. Selling, general and administrative expense for our other services
increased from $6.3 million to $9.0 million, primarily due to selling, general and
administrative expenses associated with the real estate promotional event provider we
acquired in the second quarter of 2010.
 Income from Operations
 Net Income
 Net Income Attributable to Non-controlling Interest
 Net Income Attributable to E-House Shareholders
 Income Tax Expenses
 Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
 Revenues
 
    
    Primary Real Estate Agency Services. Revenues from our primary real estate agency
services increased by 107% from $88.6 million in 2008 to $183.2 million in 2009. This
increase was primarily due to increases in total GFA and transaction value of new
properties sold by 170% and 184%, respectively, for the full year of 2009 compared to
2008, partially offset by a lower average commission rate of 1.4% for 2009 compared to
2.0% for 2008. The lower average commission rate in 2009 resulted from there being a
smaller portion of our total GFA for which a bonus commission is included in the
commission structure.
 
    
    Secondary Real Estate Brokerage Services. Revenues from our secondary real estate
brokerage services increased by 92% from $14.8 million in 2008 to $28.4 million in
2009. This increase was primarily due to higher total secondary real estate transaction
volume under improved market conditions, despite a slight decrease in the total number
of our secondary real estate brokerage stores from 115 as of December 31, 2008 to 109
as of December 31, 2009. The increase was also contributed by our brokerage
storefronts support of our sales effort in the primary real estate agency services
market primarily by promoting and selling any remaining unsold units of primary real
estate projects.
  57




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##### Table of Contents




    
    Real Estate Information and Consulting Services. Revenues from real estate
information and consulting services increased by 26% from $49.1 million in 2008 to
$61.7 million in 2009. The increase was primarily due to further expansion of the
coverage and marketing of the CRIC database as well as higher consulting revenues
resulting from increased numbers of consulting clients and projects in 2009.
 
    
    Real Estate Online Services. Revenues from real estate online services were $13.8
million in 2009. CRIC completed its acquisition of COHT concurrently with its initial
public offering in October 2009 and started reporting COHTs business as a new line of
business in the fourth quarter of 2009. COHT generates revenues through operating a
real estate Internet business in China that provides region-specific real estate news
and information, property data and access to online communities via local websites.
 
    
    Other Services. Revenues from other services, including real estate advertising
services and real estate fund management increased substantially from $1.9 million in
2008 to $12.4 million in 2009. The increase in revenues was primarily attributable to
wider acceptance and brand recognition of CRICs advertising design services and our
launch of advertising resale services in 2009.
 Cost of Revenues
 Selling, General and Administrative Expenses
 
    
    Primary Real Estate Agency Services. Selling, general and administrative expenses
for our primary real estate agency services increased by 39% from $34.1 million in 2008
to $47.2 million in 2009. This increase was primarily due to an increase of $10.0
million in bonuses tied to our performance in 2009 and an increase of $6.6 million in
allowance for doubtful accounts in 2009, partially offset by a decrease of $2.3 million
in marketing expenses in 2009.
 
    
    Secondary Real Estate Brokerage Services. Selling, general and administrative
expenses for our secondary real estate brokerage services increased by 29% from $20.2
million in 2008 to $26.1 million in 2009. This increase was primarily due to an
increase in staff salaries and commissions by $4.7 million as a result of our larger
number of staff and higher transaction volume and an increase by $1.4 million in
bonuses tied to our companys performance in 2009.
 
    
    Real Estate Information and Consulting Services. Selling, general and administrative
expense for our real estate information and consulting services increased by 65% from
$13.8 million in 2008 to $22.7 million in 2009, mainly due to higher salaries and
rental and office expenses associated with an expansion of our operations.
 
    
    Real Estate Online Services. CRIC acquired COHT, the entity which had operated
SINAs real estate online business, in October 2009. $11.4 million of our selling,
general and administrative expenses in 2009 was attributable to the acquired real
estate online business.
 
    
    Other Services. Selling, general and administrative expenses for our other services
increased by 173% from $2.3 million in 2008 to $6.3 million in 2009, mainly due to
higher salaries and rental expenses associated with increased personnel and office
space associated with our real estate advertising services.
  58




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##### Table of Contents



Gain from Settlement of Pre-existing Relationship
 Income from Operations
 Income
from equity in Affiliates
 Net Income
 Net Income Attributable to Non-controlling Interests
 Net Income Attributable to E-House Shareholders
 Income Tax Expenses
 Inflation
  Impact of Foreign Currency Fluctuation
  Impact of Governmental Policies
   59




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##### Table of Contents



Liquidity and Capital Resources
   For the Years Ended December 31,2008
    
    
    2009
    
    
    2010(in thousands of $)Net cash provided by operating activities
    
    
    77,973
    
    
    
    129,101
    
    
    
    32,460Net cash (used in) provided by investing activities
    
    
    (26,455
    )
    
    
    1,913
    
    
    
    (18,886
    )Net cash provided by (used in) financing activities
    
    
    70,037
    
    
    
    191,229
    
    
    
    (25,847
    )Net increase (decrease) in cash and cash equivalents
    
    
    124,515
    
    
    
    322,399
    
    
    
    (4,244
    )Cash and cash equivalents at beginning of the period
    
    
    101,148
    
    
    
    225,663
    
    
    
    548,062Cash and cash equivalents at end of the period
    
    
    225,663
    
    
    
    548,062
    
    
    
    543,818
 Operating Activities
     60




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##### Table of Contents



Investing Activities
     Financing Activities
       61




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##### Table of Contents



Research and Development, Patents and Licenses, etc.
 Research and Development
  Intellectual Property
  www.ehousechina.com www.1fang.com www.cityrehouse.com.cn www.yiju.org
  62




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##### Table of Contents



www.cric2009.com www.dichan.com www.fangyou.com www.leju.com
 house.sina.com.cn jiaju.sina.com.cn house.baidu.com leju.baidu.com jiaju.baidu.com
  Trend Information
  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 $)Operating lease obligations
    
    
    38,547
    
    
    
    13,363
    
    
    
    15,693
    
    
    
    2,079
    
    
    
    7,412
     63




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##### Table of Contents



Safe Harbor
  
 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
 Directors and Senior Management
  Directors and Executive Officers
    
    Age
    
    Position/TitleXin Zhou
    
    
    43
    
    
    Executive ChairmanJianjun Zang
    
    
    43
    
    
    Director and Acting Chief Executive OfficerNeil Nanpeng Shen
    
    
    43
    
    
    DirectorCanhao Huang
    
    
    53
    
    
    DirectorBing Xiang
    
    
    48
    
    
    Independent DirectorHongchao Zhu
    
    
    51
    
    
    Independent DirectorMay Wu
    
    
    43
    
    
    Independent DirectorJeffrey Zhijie Zeng
    
    
    42
    
    
    Independent DirectorYunchang Gu
    
    
    67
    
    
    Independent DirectorLi-Lan Cheng
    
    
    46
    
    
    Chief Financial Officer
  64




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##### Table of Contents



Mr. Xin Zhou
 Mr. Jianjun Zang
 Mr. Neil Nanpeng Shen
 Mr. Canhao Huang
 Mr. Bing Xiang
 Mr. Hongchao Zhu
  65




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##### Table of Contents



Ms. May Wu
 Mr. Jeffrey Zhijie Zeng
 Mr. Yunchang Gu
 Mr. Li-Lan Cheng
 Employment Agreements
   66




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##### Table of Contents



Compensation of Directors and Executive Officers
  E-House Share Incentive Plan
   OrdinaryUnderlying
    
    
    ExerciseOptions/Restricted
    
    
    Price(2)
    
    
    Date of
    
    Date ofName
    
    Shares
    
    
    ($/Share)
    
    
    Grant
    
    ExpirationJianjun Zang
    
    
    40,000
    
    
    
    5.37
    
    
    April 15, 2008
    
    April 14, 201880,000
    
    
    
    N/A
    
    
    December 21, 2009
    
    N/A80,000
    
    
    
    N/A
    
    
    November 24, 2010
    
    N/ANeil Nanpeng Shen
    
    
    40,000
    
    
    
    5.50
    
    
    March 9, 2007
    
    March 8, 201720,000
    
    
    
    5.37
    
    
    April 15, 2008
    
    April 14, 201810,000
    
    
    
    N/A
    
    
    December 21, 2009
    
    N/A10,000
    
    
    
    N/A
    
    
    November 24, 2010
    
    N/ABing Xiang
    
    
    40,000
    
    
    
    5.50
    
    
    March 9, 2007
    
    March 8, 201720,000
    
    
    
    5.37
    
    
    April 15, 2008
    
    April 14, 201810,000
    
    
    
    N/A
    
    
    December 21, 2009
    
    N/A10,000
    
    
    
    N/A
    
    
    November 24, 2010
    
    N/A
  67




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##### Table of Contents



OrdinaryUnderlying
    
    
    ExerciseOptions/Restricted
    
    
    Price(2)
    
    
    Date of
    
    Date ofName
    
    Shares
    
    
    ($/Share)
    
    
    Grant
    
    Expiration(4)Hongchao Zhu
    
    
    40,000
    
    
    
    5.50
    
    
    March 9, 2007
    
    March 8, 201720,000
    
    
    
    5.37
    
    
    April 15, 2008
    
    April 14, 201810,000
    
    
    
    N/A
    
    
    December 21, 2009
    
    N/A10,000
    
    
    
    N/A
    
    
    November 24, 2010
    
    N/AMay Wu
    
    
    40,000
    
    
    
    5.37
    
    
    April 15, 2008
    
    April 14, 201820,000
    
    
    
    5.37
    
    
    August 3, 2008
    
    August 2, 201815,000
    
    
    
    N/A
    
    
    December 21, 2009
    
    N/A15,000
    
    
    
    N/A
    
    
    November 24, 2010
    
    N/AJeffrey Zhijie Zeng
    
    
    40,000
    
    
    
    5.37
    
    
    August 3, 2008
    
    August 2, 201810,000
    
    
    
    N/A
    
    
    December 21, 2009
    
    N/A10,000
    
    
    
    N/A
    
    
    November 24, 2010
    
    N/AYunchang Gu
    
    
    40,000
    
    
    
    5.37
    
    
    August 3, 2008
    
    August 2, 201810,000
    
    
    
    N/A
    
    
    December 21, 2009
    
    N/A10,000
    
    
    
    N/A
    
    
    November 24, 2010
    
    N/ACanhao Huang
    
    
    40,000
    
    
    
    5.37
    
    
    April 15, 2008
    
    April 14, 201850,000
    
    
    
    N/A
    
    
    December 21, 2009
    
    N/A60,000
    
    
    
    N/A
    
    
    November 24, 2010
    
    N/ALi-Lan Cheng
    
    
    436,364
    (1)
    
    
    3.30
    
    
    November 28, 2006
    
    N/A40,000
    
    
    
    5.37
    
    
    April 15, 2008
    
    April 14, 201880,000
    
    
    
    N/A
    
    
    December 21, 2009
    
    N/A60,000
    
    
    
    N/A
    
    
    November 24, 2010
    
    N/AOther Individuals
as a group
    
    
    3,162,827
    (2)(3)
    
    
    5.37 to 5.50
    
    
    March 9, 2007 to
    
    March 8, 2017 toMarch 18, 2011
    
    August 2, 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, 2011, options and restricted shares representing an aggregate of 359,173
ordinary shares previously granted to various individuals have been cancelled.(4)
    
    Options granted under E-House Plan have a ten-year term
from the date of grant, whereas restricted shares are not subject to such a term.  E-House Plan Administration
 Award Agreement
  68




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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
  69




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##### Table of Contents



OrdinaryUnderlyingOptions/Restricted
    
    
    Exercise Price
    
    
    Date of
    
    Date ofName
    
    Shares
    
    
    ($/Share)
    
    
    Grant
    
    ExpirationXin Zhou
    
    
    1,250,000
    
    
    
    3.00
    
    
    January 1, 2009
    
    December 31, 2018500,000
    
    
    
    0.65
    
    
    April 23, 2009
    
    April 22, 2015150,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021Jianjun Zang
    
    
    25,000
    
    
    
    3.00
    
    
    January 1, 2009
    
    December 31, 201850,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019Neil Nanpeng Shen
    
    
    40,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 201925,000
    
    
    
    7.02
    
    
    March 10, 2011
    
    March 9, 2021Bing Xiang
    
    
    20,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019Hongchao Zhu
    
    
    20,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019May Wu
    
    
    30,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019Jeffrey Zhijie Zeng
    
    
    20,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019Yunchang Gu
    
    
    20,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019Canhao Huang
    
    
    25,000
    
    
    
    3.00
    
    
    January 1, 2009
    
    December 31, 201850,000
    
    
    
    8.00
    
    
    September 24, 2009
    
    September 23, 2019Li-Lan Cheng
    
    
    250,000
    (1)
    
    
    3.00
    
    
    January 1, 2009
    
    N/A50,000
    (1)
    
    
    6.00
    
    
    July 15, 2009
    
    N/AOther Individuals as a group
    
    
    11,725,180
    
    
    
    0.64 to 8.00
    
    
    September 6, 2008
    
    September 5, 2014to March 10, 2011
    
    to March 9, 2021
 (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.  Board Practices
   Committees of the Board of Directors
   70




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##### Table of Contents



Audit Committee
 
    
    appointing the independent auditors and pre-approving all audit and non-audit
services permitted to be performed by the independent auditors;
 
    
    reviewing with the independent auditors any audit problems or difficulties and
managements response;
 
    
    reviewing and approving all proposed related party transactions, as defined 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.
  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.
   71




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##### Table of Contents



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 our company; and
 
    
    monitoring of compliance with our 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.
  Duties of Directors
  Terms of Directors and Officers
   72




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##### Table of Contents



Employees
  Number of
    
    
    Percentage ofEmployees
    
    
    EmployeesCorporate Offices
    
    
    2,052
    
    
    
    18
    %Research Department
    
    
    2,266
    
    
    
    20
    %Sales Staff
    
    
    7,033
    
    
    
    62
    %Total
    
    
    11,351
    
    
    
    100
    %
  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.
  Shares Beneficially OwnedImmediatelyNumber
    
    
    %Directors and Executive Officers:(1)Xin Zhou (2)()
    
    
    20,272,100
    
    
    
    25.1Jianjun Zang (3)()
    
    
    2,771,148
    
    
    
    3.4Neil Nanpeng Shen (4)
    
    
    5,613,756
    
    
    
    6.9Bing Xiang
    
    
    *
    
    
    
    *Hongchao Zhu
    
    
    *
    
    
    
    *May Wu
    
    
    *
    
    
    
    *Jeffrey Zhijie Zeng
    
    
    *
    
    
    
    *Yunchang Gu
    
    
    *
    
    
    
    *Canhao Huang ()
    
    
    *
    
    
    
    *Li-Lan Cheng
    
    
    *
    
    
    
    *All Directors and Executive Officers as a Group ()
    
    
    26,593,840
    
    
    
    32.8Principal Shareholders:Orbis Investment Management (B.V.I) Limited and affiliates (5)
    
    
    15,393,104
    
    
    
    19.0On Chance Inc. (6) ()
    
    
    10,294,800
    
    
    
    12.7Jun Heng Investment Limited (7) ()
    
    
    9,977,300
    
    
    
    12.3Government of Singapore Investment Corporation Pte Ltd (8)
    
    
    4,085,184
    
    
    
    5.1
 *
    
    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. is also a
shareholder of Jun Heng Investment Limited.  73




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##### Table of Contents



(1)
    
    Except where otherwise disclosed in the footnotes below, the business address of each of our
directors and executive officers is 17/F, Merchandise Harvest Building (East), No. 333 North
Chengdu Road, Shanghai, PRC 200041, Peoples Republic of China.(2)
    
    Includes 10,294,800 ordinary shares and 9,977,300 ordinary shares respectively held by On
Chance Inc. and Jun Heng Investment Limited, respectively. Each of On Chance Inc. and Jun Heng
Investment Limited 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 20,272,100 ordinary shares
of our company. Mr. Zhou disclaims beneficial ownership of these 20,272,100 ordinary shares
except to the extent of his pecuniary interest therein.(3)
    
    Represents 2,717,816 ordinary shares held by Jun Heng Investment Limited that is
approximately 27.24% owned by Mr. Zang, 26,666 ordinary shares held by Mr. Zang personally as
of March 31, 2011 and 26,666 ordinary shares issuable upon exercise of options held by Mr.
Zang within 60 days from March 31, 2010.(4)
    
    Includes 3,750,000 ordinary shares directly held by Smart Create Group Limited, a British
Virgin Islands company that is controlled by Mr. Shen, 1,800,423 ordinary shares directly held
by Smart Master International Limited, a British Virgin Islands company solely owned and
controlled by Mr. Shen, 3,333 ordinary shares that Mr. Shen personally held as of March 31,
2011, and 60,000 ordinary shares that Mr. Shen has the right to acquire upon exercise of
options within 60 days after March 31, 2011. Mr. Shen, a shareholder of Smart Create Group
Limited, has been granted a voting proxy by the other shareholders of Smart Create Group
Limited to vote on their behalf. Mr. Shen disclaims beneficial ownership of 3,750,000 ordinary
shares directly held by Smart Create Group Limited 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.(5)
    
    Based on Schedule 13G filed by Orbis Investment Management (B.V.I.) Limited, Orbis Investment
Management Limited and Orbis Asset Management Limited on February 14, 2011. Orbis Investment
Management (B.V.I.) Limited is a company organized under the laws of the British Virgin
Islands. Orbis Investment Management Limited and Orbis Asset Management Limited are companies
organized under the laws of Bermuda. The address of their principal business office is 25
Front Street Hamilton, Bermuda HM11.(6)
    
    On Chance Inc. is a company incorporated in British Virgin Islands and is 95% owned by Xin
Zhou. The registered address of On Chance Inc. is Sea Meadow House, Blackburne Highway, Road
Town, Tortola, British Virgin Islands.(7)
    
    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.(8)
    
    Based on Schedule 13G filed by Government of Singapore Investment Corporation Pte Ltd on
March 2, 2011. The Government of Singapore Investment Corporation Pte Ltd shares power to vote
and power to dispose of the 2,942,897 securities beneficially owned by it with the Government
of Singapore and shares power to vote and dispose of 1,142,287 securities beneficially owned
with it with the Monetary Authority of Singapore. The address of its principal business office
is 168 Robinson Road, #37-01 Capital Tower, Singapore 068912.    74




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##### Table of Contents



ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
 Major Shareholders
  Related Party Transactions
 Agreements with CRIC
   Master Transaction Agreement
   75




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##### Table of Contents



Offshore Transitional Services Agreement
  
    
    general finance and accounting support;
 
    
    human resources management support;
 
    
    administrative support;
  76




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##### Table of Contents




    
    internal control and internal audit support;
 
    
    operational management support;
 
    
    legal support; and
 
    
    information technology support.
      Onshore Transitional Services Agreement
    77




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##### Table of Contents



Non-competition Agreement
    Consulting and Services Agreement
     78




---



##### Table of Contents



Onshore Cooperation Agreement
   Agreements with CRIC and SINA
  Shareholders Agreement
 Voting requirements with respect to board composition
 Restrictions on transfer
  79




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##### Table of Contents



Registration Rights Agreement
 Demand registration rights
 Piggyback registration rights
 Loan Guarantee
  Transactions with Certain Related Customer, Shareholders, Directors and Affiliates
 Transactions with Related Customers
  Transactions with Management
   80




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##### Table of Contents



Transactions with Affiliates
         Real Estate Investment Fund Management
    81




---



##### Table of Contents



Contractual Agreements with Tian Zhuo
  Agreements that Provide Effective Control over Tian Zhuo
 Exclusive Call Option Agreement
 Loan Agreements
    82




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##### Table of Contents



Shareholder Voting Rights Proxy Agreement
 Equity Pledge Agreement
 Agreements that Transfer Economic Benefits of Tian Zhuo to CRIC
 Consultancy Service Agreement.
 Contractual Agreements with Beijing Leju
  Agreements that will Provide Effective Control over Beijing Leju
 Exclusive Call Option Agreement
  83




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##### Table of Contents



Loan Agreement
 Shareholder Voting Rights Proxy Agreement
 Equity Pledge Agreement
 Memorandum.
 Agreement that Transfers Economic Benefits of Beijing Leju to CRIC
 Exclusive Technical Support Agreement.
 Share Options
  Interests of Experts and Counsel
   84




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ITEM 8. FINANCIAL INFORMATION
 Consolidated Statements and Other Financial Information
  Legal Proceedings
  Dividend Policy
    Significant Changes
  
 ITEM 9. THE OFFER AND LISTING
 Offering and Listing Details
   85




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##### Table of Contents



Sales Price ($)High
    
    
    Low2007(from August 9)
    
    
    36.45
    
    
    
    12.262008
    
    
    28.09
    
    
    
    4.00First quarter
    
    
    28.09
    
    
    
    10.05Second quarter
    
    
    18.38
    
    
    
    10.32Third quarter
    
    
    11.75
    
    
    
    6.69Fourth quarter
    
    
    8.87
    
    
    
    4.002009
    
    
    24.39
    
    
    
    5.60First quarter
    
    
    8.80
    
    
    
    5.60Second quarter
    
    
    16.98
    
    
    
    7.65Third quarter
    
    
    24.39
    
    
    
    13.51Fourth quarter
    
    
    23.94
    
    
    
    16.702010
    
    
    21.09
    
    
    
    13.01First quarter
    
    
    21.09
    
    
    
    15.49Second quarter
    
    
    20.65
    
    
    
    13.01Third quarter
    
    
    20.14
    
    
    
    13.94Fourth quarter
    
    
    19.28
    
    
    
    13.15October
    
    
    19.28
    
    
    
    16.50November
    
    
    17.90
    
    
    
    13.15December
    
    
    15.38
    
    
    
    13.452011First quarter
    
    
    16.25
    
    
    
    10.96January
    
    
    16.25
    
    
    
    14.03February
    
    
    15.05
    
    
    
    11.61March
    
    
    12.70
    
    
    
    10.96April (through April 15)
    
    
    13.26
    
    
    
    11.85
 Plan of Distribution
  Markets
  Selling Shareholders
  Dilution
  Expenses of the Issue
   86




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##### Table of Contents



ITEM 10. ADDITIONAL INFORMATION
 Share Capital
  Memorandum and Articles of Association
  Material Contracts
  Exchange Controls
  Taxation
  Cayman Islands Taxation
  Peoples Republic of China Taxation
   87




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##### Table of Contents



United States Federal Income Taxation
  HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX
RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF ADSs OR ORDINARY SHARES.
  
    
    an individual who is a citizen or resident of the United States;
 
    
    a corporation (or other entity taxable as a corporation) organized under the laws of
the United States, any State thereof or the District of Columbia;
 
    
    an estate, the income of which is subject to U.S. federal income taxation regardless
of its source; or
 
    
    a trust that (1) is subject to the primary supervision of a court within the United
States and the control of one or more U.S. persons for all substantial decisions or (2)
has a valid election in effect under applicable U.S. Treasury regulations to be treated
as a U.S. person.
     88




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##### Table of Contents



Passive Foreign Investment Company Considerations
    Dividends
    89




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##### Table of Contents



Disposition of the ADSs or Ordinary Shares
  Passive Foreign Investment Company
  
    
    the excess distribution or gain will be allocated ratably over the U.S. Holders
holding period for the ADSs or ordinary shares;
 
    
    the amount allocated to the current taxable year, and any taxable years in your
holding period prior to the first taxable year in which we were a PFIC, or pre-PFIC
year, will be taxable as ordinary income;
 
    
    the amount allocated to each prior taxable year, other than the current taxable year
or a pre-PFIC year, will be subject to tax at the highest tax rate in effect for
individuals or corporations, as applicable, for each such year; and
 
    
    an interest charge generally applicable to underpayments of tax will be imposed on
the tax attributable to each prior taxable year, other than the current taxable year or
a pre-PFIC year.
  90




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Information Reporting and Backup Withholding
   91




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##### Table of Contents



Dividends and Paying Agents
  Statement by Experts
  Documents on Display
 www.sec.gov
 www.ehousechina.com
    Subsidiary Information
  
 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
   92




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##### Table of Contents



Foreign Exchange Risk
    
 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
 Debt Securities
  Warrants and Rights
  Other Securities
  American Depositary Shares
 Fees and Charges Our ADS Holders May Have to Pay
   93




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##### Table of Contents




    
    a fee of $1.50 per ADS or ADSs for transfers of certificated or direct registration
ADSs;
 
    
    a fee of up to $0.05 per ADS (or portion thereof) for any cash distribution made
pursuant to the deposit agreement;
 
    
    an aggregate fee of up to $0.05 per ADS (or portion thereof) per calendar year for
services performed by the depositary in administering the ADSs (which fee may be
charged on a periodic basis during each calendar year and shall be assessed against
holders of our ADSs as of the record date or record dates set by the depositary during
each calendar year and shall be payable at the sole discretion of the depositary by
billing these holders or by deducting the charges from one or more cash dividends or
other cash distributions);
 
    
    any other charge payable by the depositary or any of the depositarys agents,
including, without limitation, the custodian, or the agents of the depositarys agents
in connection with the servicing of our ordinary shares or other deposited securities
(which charge shall be assessed against registered holders of our ADSs as of the record
date or dates set by the depositary and shall be payable at the sole discretion of the
depositary by billing such registered holders or by deducting such charge from one or
more cash dividends or other cash distributions);
 
    
    a fee for the distribution of securities (or the sale of securities in connection
with a distribution), such fee being in an amount equal to the fee for the execution
and delivery of ADSs which would have been charged as a result of the deposit of such
securities (treating all such securities as if they were shares) but which securities
or the net cash proceeds from the sale thereof are instead distributed by the
depositary to those holders entitled thereto;
 
    
    stock transfer or other taxes and other governmental charges;
 
    
    cable, telex and facsimile transmission and delivery charges incurred at your
request;
 
    
    transfer or registration fees for the registration of transfer of deposited
securities on any applicable register in connection with the deposit or withdrawal of
deposited securities;
 
    
    expenses of the depositary in connection with the conversion of foreign currency
into U.S. dollars; and
 
    
    such fees and expenses as are incurred by the depositary (including without
limitation expenses incurred in connection with compliance with foreign exchange
control regulations or any law or regulation relating to foreign investment) in
delivery of deposited securities or otherwise in connection with the depositarys or
its custodians compliance with applicable laws, rules or regulations.
  Fees and Other Payments Made by the Depositary to Us
   94




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PART II
 
 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
  
 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
  
 ITEM 15. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Managements Annual Report on Internal Control over Financial Reporting
  Internal ControlIntegrated
Framework
  Changes in Internal Control over Financial Reporting
  
 ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
   95




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ITEM 16B. CODE OF ETHICS
 ir.ehousechina.com
 
 ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  For the Years Ended December 31,2008
    
    
    2009
    
    
    2010Audit fees(1)
    
    
    1,020,648
    
    
    
    1,024,737
    
    
    
    1,563,163Audit-related fees(2)
    
    
    374,073
    
    
    
    969,927
    
    
    
    Tax fees(3)
    
    
    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. The audit-related fees in 2008
were billed for professional services rendered for 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
offering in January 2008. The audit-related fees in 2009 were billed for the professional
services rendered for the issuance of the audit and review of financial statements and other
assurance services rendered in connection with CRICs initial public offering in 2009.(3)
    
    Tax fees represents aggregate fees billed for professional services rendered by our
principal auditors for tax compliance, tax advice and tax planning.  
 ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  
 ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
   96




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##### Table of Contents



ITEM 16F. CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
  
 ITEM 16G. CORPORATE GOVERNANCE
  
 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, 2008 (incorporated by
reference to Exhibit 4.2 from our annual report on Form 20-F (File No.
001-33616), filed with the Commission on May 4, 2009).4.3
    
    
    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
    
    
    English translation of Equity Pledge Agreement, dated July 20, 2009,
between Shanghai CRIC Information Technology Co., Ltd., Shanghai Tian Zhuo
Advertising Co., Ltd., Xin Zhou and Xudong Zhu (incorporated by reference
to Exhibit 4.5 from our annual report on Form 20-F (File No. 001-33616),
filed with the Commission on April 23, 2010).4.6
    
    
    English translation of Exclusive Call Option Agreement dated July 20, 2009
between Shanghai CRIC Information Technology Co., Ltd., Shanghai Tian Zhuo
Advertising Co., Ltd., Xin Zhou and Xudong Zhu (incorporated by reference
to Exhibit 4.6 from our annual report on Form 20-F (File No. 001-33616),
filed with the Commission on April 23, 2010).
  97




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Exhibit Number
    
    Description of Document4.7
    
    
    English translation of Loan Agreement, dated April 1, 2008, between
Shanghai CRIC Information Technology Co., Ltd. and Xin Zhou (incorporated
by reference to Exhibit 4.8 from our annual report on Form 20-F (File No.
001-33616), filed with the Commission on May 4, 2009).4.8
    
    
    English translation of Loan Agreement, dated September 8, 2008, between
Shanghai CRIC Information Technology Co., Ltd. and Xin Zhou (incorporated
by reference to Exhibit 4.10 from our annual report on Form 20-F (File No.
001-33616), filed with the Commission on May 4, 2009).4.9
    
    
    English translation of Loan Agreement, dated July 20, 2009, between
Shanghai CRIC Information Technology Co., Ltd. and Xin Zhou (incorporated
by reference to Exhibit 4.9 from our annual report on Form 20-F (File No.
001-33616), filed with the Commission on April 23, 2010).4.10
    
    
    English translation of Loan Agreement, dated July 20, 2009, between
Shanghai CRIC Information Technology Co., Ltd., Xin Zhou and Xudong Zhu
(incorporated by reference to Exhibit 4.10 from our annual report on Form
20-F (File No. 001-33616), filed with the Commission on April 23, 2010).4.11
    
    
    English translation of Loan Agreement, dated April 1, 2008, between
Shanghai Tian Zhuo Advertising Co., Ltd. and Xin Zhou (incorporated by
reference to Exhibit 4.9 from our annual report on Form 20-F (File No.
001-33616), filed with the Commission on May 4, 2009).4.12
    
    
    English translation of Loan Agreement, dated September 8, 2008, between
Shanghai Tian Zhuo Advertising Co., Ltd. and Xin Zhou (incorporated by
reference to Exhibit 4.11 from our annual report on Form 20-F (File No.
001-33616), filed with the Commission on May 4, 2009).4.13
    
    
    English translation of Shareholder Voting Rights Proxy Agreement, dated
July 20, 2009, between Shanghai CRIC Information Technology Co., Ltd.,
Shanghai Tian Zhuo Advertising Co., Ltd., Xin Zhou and Xudong Zhu
(incorporated by reference to Exhibit 4.13 from our annual report on Form
20-F (File No. 001-33616), filed with the Commission on April 23, 2010).4.14
    
    
    English translation of Consultancy Service Agreement, dated April 1, 2008,
between Shanghai CRIC Information Technology Co., Ltd. and Shanghai Tian
Zhuo Advertising Co., Ltd. (incorporated by reference to Exhibit 4.13 from
our annual report on Form 20-F (File No. 001-33616), filed with the
Commission on May 4, 2009)4.15
    
    
    English translation of Exclusive Call Option Agreement dated September 29,
2009 between Shanghai SINA Leju Information Technology Co., Ltd., Beijing
Visheng Leju Information Services Co., Ltd., Xudong Zhu and Jun Luo
(incorporated by reference to Exhibit 4.15 from our annual report on Form
20-F (File No. 001-33616), filed with the Commission on April 23, 2010).4.16
    
    
    English translation of Loan Agreement dated September 29, 2009 between
Shanghai SINA Leju Information Technology Co., Ltd., Xudong Zhu and Jun
Luo (incorporated by reference to Exhibit 4.16 from our annual report on
Form 20-F (File No. 001-33616), filed with the Commission on April 23,
2010).
  98




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Exhibit Number
    
    Description of Document4.17
    
    
    English translation of Shareholder Voting Rights Proxy Agreement dated
September 29, 2009 between Shanghai SINA Leju Information Technology Co.,
Ltd., Beijing Visheng Leju Information Services Co., Ltd., Xudong Zhu and
Jun Luo (incorporated by reference to Exhibit 4.17 from our annual report
on Form 20-F (File No. 001-33616), filed with the Commission on April 23,
2010).4.18
    
    
    English translation of Equity Pledge Agreement dated September 29, 2009
between Shanghai SINA Leju Information Technology Co., Ltd., Beijing
Visheng Leju Information Services Co., Ltd., Xudong Zhu and Jun Luo
(incorporated by reference to Exhibit 4.18 from our annual report on Form
20-F (File No. 001-33616), filed with the Commission on April 23, 2010).4.19
    
    
    English translation of Exclusive Technical Support Agreement dated May 8,
2008 between Shanghai SINA Leju Information Technology Co., Ltd. and
Beijing Visheng Leju Information Services Co., Ltd. (incorporated by
reference to Exhibit 4.19 from our annual report on Form 20-F (File No.
001-33616), filed with the Commission on April 23, 2010).4.20
    
    
    Share Purchase Agreement, dated as of July 23, 2009, and Amendment
Agreement to the Share Purchase Agreement, dated September 29, 2009,
between the Registrant and SINA Corporation (incorporated by reference to
Exhibit 4.20 from our annual report on Form 20-F (File No. 001-33616),
filed with the Commission on April 23, 2010).4.21
    
    
    Shareholders Agreement, dated as of October 21, 2009, by and among the
Registrant, E-House (China) Holdings Limited and SINA Corporation
(incorporated by reference to Exhibit 4.21 from our annual report on Form
20-F (File No. 001-33616), filed with the Commission on April 23, 2010).4.22
    
    
    Registration Rights Agreement, dated as of October 21, 2009, by and among
the Registrant, E-House (China) Holdings Limited and SINA Corporation
(incorporated by reference to Exhibit 4.22 from our annual report on Form
20-F (File No. 001-33616), filed with the Commission on April 23, 2010).4.23
    
    
    Master Transaction Agreement, dated as of July 27, 2009, between the
Registrant and E-House (China) Holdings Limited (incorporated by reference
to Exhibit 4.23 from our annual report on Form 20-F (File No. 001-33616),
filed with the Commission on April 23, 2010).4.24
    
    
    Offshore Transitional Services Agreement, dated as of July 27, 2009,
between the Registrant and E-House (China) Holdings Limited (incorporated
by reference to Exhibit 4.24 from our annual report on Form 20-F (File No.
001-33616), filed with the Commission on April 23, 2010).4.25
    
    
    English translation of Onshore Transitional Services Agreement, dated as
of July 27, 2009, between Shanghai CRIC Information Technology Co., Ltd.
and Shanghai Real Estate Sales (Group) Co., Ltd. (incorporated by
reference to Exhibit 4.25 from our annual report on Form 20-F (File No.
001-33616), filed with the Commission on April 23, 2010).4.26
    
    
    Non-Competition Agreement, dated as of July 27, 2009, between the
Registrant and E-House (China) Holdings Limited (incorporated by reference
to Exhibit 4.26 from our annual report on Form 20-F (File No. 001-33616),
filed with the Commission on April 23, 2010).
  99




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##### Table of Contents



Exhibit Number
    
    Description of Document4.27
    
    
    English translation of Consulting and Services Agreement, dated as of June
30, 2009, between Shanghai CRIC Information Technology Co., Ltd. and
Shanghai Real Estate Sales (Group) Co., Ltd. (incorporated by reference to
Exhibit 4.27 from our annual report on Form 20-F (File No. 001-33616),
filed with the Commission on April 23, 2010).4.28
    
    
    English translation of Onshore Cooperation Agreement, dated as of August
31, 2009, among Shanghai Real Estate Sales (Group) Co., Ltd., Shanghai
CRIC Information Technology Co., Ltd. and Shanghai Tian Zhuo Advertising
Co., Ltd. (incorporated by reference to Exhibit 4.28 from our annual
report on Form 20-F (File No. 001-33616), filed with the Commission on
April 23, 2010).8.1
    *
    
    Subsidiaries of the Registrant11.1
    
    
    Code of Business Conduct and Ethics of the Registrant (incorporated by
reference to Exhibit 99.1 from our F-1 registration statement (File No.
333-144451), 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 200215.1
    *
    
    Consent of Deloitte Touche Tohmatsu CPA Ltd.15.2
    *
    
    Consent of Fangda Partners
 *
    
    Filed with this Annual Report on Form 20-F.  100




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SIGNATURES
  E-HOUSE (CHINA) HOLDINGS LIMITEDBy:
    /s/ Xin ZhouName:
    Xin ZhouTitle:
    Executive Chairman of the Board of Directors   101




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E-HOUSE (CHINA) HOLDINGS LIMITED
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
 Reports of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2009 and 2010
    
    
    F-4Consolidated Statements of Operations for the Years Ended December 31, 2008, 2009 and 2010
    
    
    F-5Consolidated Statements of Changes in Equity and Comprehensive Income for the Years Ended
December 31, 2008, 2009, and 2010
    
    
    F-6Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2009 and 2010
    
    
    F-7Notes to Consolidated Financial Statements for the Years Ended December 31, 2008, 2009 and 2010
    
    
    F-8
  F-1




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




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  Internal Control  Integrated Framework
    Internal Control
 Integrated Framework
   
  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 31,2009
    
    
    2010$
    
    
    $ASSETSCurrent assets:Cash and cash equivalents
    
    
    548,061,884
    
    
    
    543,817,633Restricted cash
    
    
    8,056,527
    
    
    
    6,985,409Marketable securities
    
    
    
    
    
    
    16,564,054Customer deposits, net of allowance for
doubtful accounts of $523,196 and
$539,433 at December 31, 2009 and 2010,
respectively
    
    
    38,958,140
    
    
    
    90,616,995Unbilled accounts receivable, net of
allowance for doubtful accounts of
$12,113,824 and $18,198,012 at December
31, 2009 and 2010, respectively
    
    
    120,020,485
    
    
    
    138,013,483Accounts receivable, net of allowance for
doubtful accounts of $1,162,900 and
$98,830 at December 31, 2009 and 2010,
respectively
    
    
    33,452,323
    
    
    
    36,101,078Properties held for sale
    
    
    3,064,810
    
    
    
    4,457,709Advance payment for properties, current
    
    
    8,108,299
    
    
    
    Deferred tax assets
    
    
    13,337,020
    
    
    
    17,284,547Prepaid expenses and other current assets
    
    
    18,697,780
    
    
    
    22,052,561Amounts due from related parties
    
    
    1,042,303
    
    
    
    19,447Total current assets
    
    
    792,799,571
    
    
    
    875,912,916Property and equipment, net
    
    
    16,218,641
    
    
    
    21,302,787Intangible assets, net
    
    
    202,694,693
    
    
    
    183,911,765Investment in affiliates
    
    
    398,396
    
    
    
    10,161,275Goodwill
    
    
    452,659,692
    
    
    
    453,139,720Other non-current assets
    
    
    7,353,787
    
    
    
    13,838,062TOTAL ASSETS
    
    
    1,472,124,780
    
    
    
    1,558,266,525LIABILITIES AND EQUITYCurrent liabilities:Accounts payable (including accounts
payable of the consolidated VIEs without
recourse to E-House of $8,108,598 and
$2,777,692 as of December 31, 2009 and
2010, respectively)
    
    
    9,864,773
    
    
    
    8,148,688Accrued payroll and welfare expenses
(including accrued payroll and welfare
expenses of the consolidated VIEs without
recourse to E-House of $1,535,879 and
$5,998,335 as of December 31, 2009 and
2010, respectively)
    
    
    31,418,709
    
    
    
    37,853,279Income tax payable (including income tax
payable of the consolidated VIEs without
recourse to E-House of $1,658,316 and
$3,824,260 as of December 31, 2009 and
2010, respectively)
    
    
    38,225,826
    
    
    
    42,276,115Other tax payable (including other tax
payable of the consolidated VIEs without
recourse to E-House of $1,549,522 and
$2,965,717 as of December 31, 2009 and
2010, respectively)
    
    
    12,072,447
    
    
    
    14,765,431Amounts due to related parties
    
    
    1,050,000
    
    
    
    5,154,657Advance from property buyers
    
    
    6,587,093
    
    
    
    7,618,667Deferred revenue
    
    
    3,803,279
    
    
    
    7,973,091Other current liabilities (including
other current liabilities of the
consolidated VIEs without recourse to
E-House of $4,630,860 and $6,728,488 as
of December 31, 2009 and 2010,
respectively)
    
    
    12,125,102
    
    
    
    16,309,101Total current liabilities
    
    
    115,147,229
    
    
    
    140,099,029Deferred tax liabilities (including deferred
tax liabilities, non-current of the
consolidated VIEs without recourse to E-House
of $270,607 and $424,931 as of December 31,
2009 and 2010, respectively)
    
    
    42,326,523
    
    
    
    40,152,455Other non-current liabilities
    
    
    1,331,323
    
    
    
    1,375,469Total liabilities
    
    
    158,805,075
    
    
    
    181,626,953Commitments and contingencies (Note 19)Equity:Ordinary shares ($0.001 par value): 1,000,000,000 shares authorized,
80,145,869 and 80,752,526 shares issued
and outstanding, as of December 31, 2009
and 2010, respectively
    
    
    80,146
    
    
    
    80,752Additional paid-in capital
    
    
    656,592,898
    
    
    
    672,621,384Retained earnings
    
    
    184,749,251
    
    
    
    200,822,587Accumulated other comprehensive income
    
    
    16,344,294
    
    
    
    27,640,541Subscription receivables
    
    
    
    
    
    
    (65,417
    )Total E-House equity
    
    
    857,766,589
    
    
    
    901,099,847Non-controlling interest
    
    
    455,553,116
    
    
    
    475,539,725Total equity
    
    
    1,313,319,705
    
    
    
    1,376,639,572TOTAL LIABILITIES AND EQUITY
    
    
    1,472,124,780
    
    
    
    1,558,266,525
   F-4




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E-HOUSE (CHINA) HOLDINGS LIMITED
 
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 (In U.S. dollar except for share data)
 Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Total revenues
    
    
    154,487,455
    
    
    
    299,538,656
    
    
    
    356,525,127Cost of revenues
    
    
    (31,855,848
    )
    
    
    (70,343,445
    )
    
    
    (104,846,495
    )Selling, general and administrative expenses
    
    
    (77,197,631
    )
    
    
    (125,721,179
    )
    
    
    (198,424,922
    )Gain from settlement of pre-existing relationship
    
    
    
    
    
    
    2,100,832
    
    
    
    Income from operations
    
    
    45,433,976
    
    
    
    105,574,864
    
    
    
    53,253,710Interest expense
    
    
    (2,420,468
    )
    
    
    (215,854
    )
    
    
    Interest income
    
    
    3,062,513
    
    
    
    1,038,789
    
    
    
    2,807,831Other income, net
    
    
    1,970,481
    
    
    
    8,780,370
    
    
    
    5,589,169Income before taxes and equity in affiliates
    
    
    48,046,502
    
    
    
    115,178,169
    
    
    
    61,650,710Income tax expense
    
    
    (8,712,558
    )
    
    
    (19,924,081
    )
    
    
    (12,696,234
    )Income before equity in affiliates
    
    
    39,333,944
    
    
    
    95,254,088
    
    
    
    48,954,476Income (loss) from equity in affiliates
    
    
    153,700
    
    
    
    22,128,235
    
    
    
    (278,662
    )Net income
    
    
    39,487,644
    
    
    
    117,382,323
    
    
    
    48,675,814Less: Net income (loss) attributable to non-controlling interest
    
    
    (88,380
    )
    
    
    17,104,023
    
    
    
    12,521,421Net income attributable to E-House shareholders
    
    
    39,576,024
    
    
    
    100,278,300
    
    
    
    36,154,393Earnings per share:Basic
    
    $
    0.48
    
    
    $
    1.26
    
    
    $
    0.45Diluted
    
    $
    0.48
    
    
    $
    1.25
    
    
    $
    0.44Shares used in computation:Basic
    
    
    81,818,972
    
    
    
    79,643,079
    
    
    
    80,287,171Diluted
    
    
    82,110,430
    
    
    
    80,456,210
    
    
    
    81,302,622
   F-5




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##### Table of Contents



E-HOUSE (CHINA) HOLDINGS LIMITED
 
 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
AND COMPREHENSIVE INCOME
 (In U.S. dollar)
 AccumulatedOther
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalOrdinary
    
    
    Additional
    
    
    Retained
    
    
    Comprehensive
    
    
    Subscription
    
    
    Non-controlling
    
    
    Total
    
    
    ComprehensiveShares
    
    
    Paid-in Capital
    
    
    Earnings
    
    
    Income
    
    
    Receivables
    
    
    Interest
    
    
    Equity
    
    
    IncomeNumber
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance at January 1, 2008
    
    
    76,473,759
    
    
    
    76,474
    
    
    
    209,906,488
    
    
    
    54,504,945
    
    
    
    6,685,113
    
    
    
    
    
    
    
    2,918,600
    
    
    
    274,091,620Issuance 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
    
    
    
    
    
    
    
    
    
    
    
    (88,380
    )
    
    
    39,487,644
    
    
    
    39,487,644Dividends to non-controlling
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (346,939
    )
    
    
    (346,939
    )
    
    
    Non-controlling interest
recognized in connection with
business acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,173,582
    
    
    
    1,173,582
    
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    4,601,498
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,601,498
    
    
    
    Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,425,347
    
    
    
    
    
    
    
    34,670
    
    
    
    9,460,017
    
    
    
    9,460,017Balance at December 31, 2008
    
    
    79,769,481
    
    
    
    79,770
    
    
    
    301,812,186
    
    
    
    85,296,056
    
    
    
    16,110,460
    
    
    
    
    
    
    
    3,691,533
    
    
    
    406,990,005
    
    
    
    48,947,661Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,278,300
    
    
    
    
    
    
    
    
    
    
    
    17,104,023
    
    
    
    117,382,323
    
    
    
    117,382,323Repurchase of shares
    
    
    (277,174
    )
    
    
    (277
    )
    
    
    (1,048,703
    )
    
    
    (825,105
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,874,085
    )
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    10,185,511
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,735,043
    
    
    
    11,920,554
    
    
    
    Exercise of share options
    
    
    509,562
    
    
    
    509
    
    
    
    2,753,597
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,754,106
    
    
    
    Vesting of restricted shares
    
    
    144,000
    
    
    
    144
    
    
    
    434,586
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    434,730
    
    
    
    Replacement of COHT share
options
    
    
    
    
    
    
    
    
    
    
    7,486,795
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,474,001
    
    
    
    14,960,796
    
    
    
    Capital injection and
non-controlling interest
recognized in connection with
business acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,260,780
    
    
    
    1,260,780
    
    
    
    Acquisition of non-controlling
interest
    
    
    
    
    
    
    
    
    
    
    (17,446,572
    )
    
    
    
    
    
    
    77,597
    
    
    
    
    
    
    
    (19,880,354
    )
    
    
    (37,249,329
    )
    
    
    Recognition of change in
E-Houses economic interests in
CRIC
    
    
    
    
    
    
    
    
    
    
    352,415,498
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    444,287,620
    
    
    
    796,703,118
    
    
    
    Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    156,237
    
    
    
    
    
    
    
    (119,530
    )
    
    
    36,707
    
    
    
    36,707Balance at December 31, 2009
    
    
    80,145,869
    
    
    
    80,146
    
    
    
    656,592,898
    
    
    
    184,749,251
    
    
    
    16,344,294
    
    
    
    
    
    
    
    455,553,116
    
    
    
    1,313,319,705
    
    
    
    117,419,030Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,154,393
    
    
    
    
    
    
    
    
    
    
    
    12,521,421
    
    
    
    48,675,814
    
    
    
    48,675,814Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,081,057
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,081,057
    )
    
    
    Dividends to non-controlling
interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,231,562
    )
    
    
    (1,231,562
    )
    
    
    Share-based compensation
    
    
    
    
    
    
    
    
    
    
    19,987,214
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,018,559
    
    
    
    27,005,773
    
    
    
    Exercise of share options
    
    
    301,192
    
    
    
    301
    
    
    
    1,623,076
    
    
    
    
    
    
    
    
    
    
    
    (65,417
    )
    
    
    
    
    
    
    1,557,960
    
    
    
    Vesting of the restricted shares
    
    
    305,465
    
    
    
    305
    
    
    
    (305
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Capital injection and
non-controlling interest
recognized in connection with
business acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,763,694
    
    
    
    5,763,694
    
    
    
    Exercise of CRIC share options
    
    
    
    
    
    
    
    
    
    
    (1,873,657
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,329,296
    
    
    
    1,455,639
    
    
    
    Vesting of CRIC restricted
shares
    
    
    
    
    
    
    
    
    
    
    (121,968
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    384,468
    
    
    
    262,500
    
    
    
    Acquisition of non-controlling
interest
    
    
    
    
    
    
    
    
    
    
    (3,614,582
    )
    
    
    
    
    
    
    58,475
    
    
    
    
    
    
    
    (9,312,263
    )
    
    
    (12,868,370
    )
    
    
    Foreign currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,237,772
    
    
    
    
    
    
    
    1,541,704
    
    
    
    12,779,476
    
    
    
    12,779,476Distribution to E-house
    
    
    
    
    
    
    
    
    
    
    28,708
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,708
    )
    
    
    
    
    
    
    Balance at December 31, 2010
    
    
    80,752,526
    
    
    
    80,752
    
    
    
    672,621,384
    
    
    
    200,822,587
    
    
    
    27,640,541
    
    
    
    (65,417
    )
    
    
    475,539,725
    
    
    
    1,376,639,572
    
    
    
    61,455,290
  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 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Operating activities:Net income
    
    
    39,487,644
    
    
    
    117,382,323
    
    
    
    48,675,814Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    4,114,761
    
    
    
    10,162,437
    
    
    
    26,388,643Gain from settlement of pre-existing relationship
    
    
    
    
    
    
    (2,100,832
    )
    
    
    Income from equity in affiliates
    
    
    (153,700
    )
    
    
    (22,128,235
    )
    
    
    (278,662
    )Allowance for doubtful accounts
    
    
    2,583,853
    
    
    
    13,937,173
    
    
    
    5,739,736Share-based compensation
    
    
    4,601,498
    
    
    
    11,920,554
    
    
    
    27,005,773Others
    
    
    237,895
    
    
    
    1,030,759
    
    
    
    (2,192,308
    )Changes in operating assets and liabilities:Restricted cash
    
    
    1,887,622
    
    
    
    (6,852,856
    )
    
    
    1,071,118Customer deposits
    
    
    56,359,296
    
    
    
    32,813,578
    
    
    
    (50,618,840
    )Accounts receivable
    
    
    (57,191,210
    )
    
    
    (37,823,690
    )
    
    
    (26,971,714
    )Marketable securities
    
    
    (8,096,038
    )
    
    
    8,096,038
    
    
    
    (15,884,428
    )Amounts due from related parties
    
    
    2,024,914
    
    
    
    731,809
    
    
    
    1,022,856Prepaid expenses and other current assets
    
    
    (5,610,975
    )
    
    
    5,752,434
    
    
    
    1,968,890Other non-current assets
    
    
    2,308,366
    
    
    
    3,180,863
    
    
    
    (1,591,264
    )Accounts payable
    
    
    (155,316
    )
    
    
    (4,188,599
    )
    
    
    (1,906,219
    )Accrued payroll and welfare expenses
    
    
    (1,108,809
    )
    
    
    19,538,868
    
    
    
    6,580,711Income tax payable
    
    
    (325,654
    )
    
    
    20,534,956
    
    
    
    3,974,621Other tax payable
    
    
    1,076,658
    
    
    
    5,434,026
    
    
    
    2,790,434Amounts due to related parties
    
    
    (1,475,685
    )
    
    
    (146,075
    )
    
    
    4,367,157Deposits payable
    
    
    39,212,152
    
    
    
    (39,212,152
    )
    
    
    Other current liabilities
    
    
    315,506
    
    
    
    1,473,279
    
    
    
    10,792,123Other non-current liabilities
    
    
    
    
    
    
    (502,102
    )
    
    
    44,146Deferred taxes
    
    
    (2,119,638
    )
    
    
    (9,933,315
    )
    
    
    (8,518,614
    )Net cash provided by operating activities
    
    
    77,973,140
    
    
    
    129,101,241
    
    
    
    32,459,973Investing activities:Deposit for and purchase of property and equipment and intangible assets
    
    
    (5,136,016
    )
    
    
    (6,315,343
    )
    
    
    (10,551,323
    )Advance payment for properties
    
    
    (15,620,751
    )
    
    
    
    
    
    
    (1,642,576
    )Purchase of subsidiaries, net of cash acquired
    
    
    (2,399,326
    )
    
    
    3,243,113
    
    
    
    563,211Deposit for acquisition
    
    
    (1,594,823
    )
    
    
    
    
    
    
    (4,529,880
    )Investment in affiliates
    
    
    (2,500,000
    )
    
    
    (329,468
    )
    
    
    (9,878,053
    )Proceeds from sale of properties held for sale
    
    
    749,999
    
    
    
    5,080,606
    
    
    
    7,051,619Proceeds from disposal of property and equipment
    
    
    46,193
    
    
    
    233,968
    
    
    
    100,775Net cash provided by (used in) investing activities
    
    
    (26,454,724
    )
    
    
    1,912,876
    
    
    
    (18,886,227
    )Financing activities:Net proceeds from short-term borrowings
    
    
    42,482,100
    
    
    
    
    
    
    
    Acquisition of non-controlling interest
    
    
    (65,999
    )
    
    
    (37,290,289
    )
    
    
    (12,868,370
    )Repayment of short-term borrowings
    
    
    (27,380,000
    )
    
    
    (21,947,100
    )
    
    
    Restricted cash-pledged accounts
    
    
    (22,727,280
    )
    
    
    22,727,280
    
    
    
    Advance from a related party
    
    
    
    
    
    
    1,050,000
    
    
    
    Contribution from non-controlling interest
    
    
    
    
    
    
    1,175,244
    
    
    
    4,115,358Proceeds from exercise of options
    
    
    
    
    
    
    2,754,106
    
    
    
    3,013,599Proceeds from issuance of ordinary shares, net of paid issuance costs
for 2008 of $4,488,986
    
    
    97,505,014
    
    
    
    
    
    
    
    Proceeds from issuance of ordinary shares of CRIC upon initial public
offering, net of paid issuance costs of $23,548,949
    
    
    
    
    
    
    224,851,051
    
    
    
    Payment of E-Houses offering costs
    
    
    (220,804
    )
    
    
    (74,629
    )
    
    
    Repurchase of shares
    
    
    (19,208,685
    )
    
    
    (2,016,499
    )
    
    
    Dividends
    
    
    
    
    
    
    
    
    
    
    (20,081,057
    )Dividends to non-controlling interest
    
    
    (346,937
    )
    
    
    
    
    
    
    (1,231,562
    )Loans from non-controlling interest
    
    
    
    
    
    
    
    
    
    
    1,205,000Net cash provided by (used in) financing activities
    
    
    70,037,409
    
    
    
    191,229,164
    
    
    
    (25,847,032
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    2,959,952
    
    
    
    155,279
    
    
    
    8,029,035Net increase (decrease) in cash and cash equivalents
    
    
    124,515,777
    
    
    
    322,398,560
    
    
    
    (4,244,251
    )Cash and cash equivalents at the beginning of the year
    
    
    101,147,547
    
    
    
    225,663,324
    
    
    
    548,061,884Cash and cash equivalents at the end of the year
    
    
    225,663,324
    
    
    
    548,061,884
    
    
    
    543,817,633Supplemental disclosure of cash flow information:Interest paid
    
    
    2,396,514
    
    
    
    252,481
    
    
    
    Income taxes paid
    
    
    12,466,793
    
    
    
    9,398,214
    
    
    
    22,467,285Non-cash investing and financing activities:Properties held for sale obtained in settlement of accounts receivable
    
    
    183,839
    
    
    
    3,471,273
    
    
    
    2,091,056Advance payment for properties held for sale in connection with settlement
of accounts receivable
    
    
    1,098,721
    
    
    
    
    
    
    
    Issuance of ordinary shares in connection with business acquisition
    
    
    
    
    
    
    572,000,004
    
    
    
    Offering cost to be paid
    
    
    235,728
    
    
    
    146,451
    
    
    
    Replacement of share option due to acquisition
    
    
    
    
    
    
    14,960,796
    
    
    
    Capitalization of costs for repurchase of shares  other current liabilities
    
    
    142,414
    
    
    
    
    
    
    
    Non-controlling interest recognized in connection with business acquisition
    
    
    
    
    
    
    85,536
    
    
    
    1,648,336
   F-7




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##### Table of Contents



E-HOUSE (CHINA) HOLDINGS LIMITED
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE YEARS ENDED DECEMBER 31, 2008, 2009 AND 2010
 (In U.S. dollar)
 1. Organization and Principal Activities
     Date of
    
    Place of
    
    Percentage ofincorporation
    
    incorporation
    
    OwnershipShanghai Real Estate Sales (Group) Co., Ltd.
    
    15-Aug-00
    
    PRC
    
    
    100
    %Shanghai City Rehouse Agent Consultants Co., Ltd.
    
    17-May-02
    
    PRC
    
    
    85
    %E-House Real Estate Asset Management Co., Ltd.
    
    22-Aug-06
    
    Cayman
    
    
    51
    %China Real Estate Information Corporation
    
    21-Aug-08
    
    Cayman
    
    
    53
    %Shanghai Dehu Public Relationship Consulting Co., Ltd.
    
    09-Feb-07
    
    PRC
    
    
    55
    %Shanghai Tian Zhuo Advertising Co., Ltd.
    
    27-Feb-08
    
    PRC
    
    
    VIEBeijing Yisheng Leju Information Services Co., Ltd.
    
    13-Feb-08
    
    PRC
    
    
    VIE
 2. Summary of Principal Accounting Policies
 (a) Basis of presentation
  (b) Basis of consolidation
     F-8




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##### Table of Contents



As of December 31,2009
    
    
    2010$
    
    
    $Cash and cash equivalents
    
    
    9,631,554
    
    
    
    12,133,157Unbilled accounts receivable, net of allowance for doubtful accounts
    
    
    3,803,925
    
    
    
    2,864,778Accounts receivable, net of allowance for doubtful accounts
    
    
    2,105,244
    
    
    
    784,813Prepaid expenses and other current assets
    
    
    2,675,884
    
    
    
    1,511,617Total current assets
    
    
    18,216,607
    
    
    
    17,294,365Total noncurrent assets
    
    
    6,450,738
    
    
    
    6,562,186Total assets
    
    
    24,667,345
    
    
    
    23,856,551Accounts payable
    
    
    1,887,725
    
    
    
    319,812Accrued payroll and welfare expenses
    
    
    640,283
    
    
    
    611,029Income tax payable
    
    
    836,915
    
    
    
    1,156,467Other tax payable
    
    
    576,058
    
    
    
    412,247Other current liabilities
    
    
    736,553
    
    
    
    960,528Total current liabilities
    
    
    4,677,534
    
    
    
    3,460,083Deferred tax liabilities, non-current
    
    
    270,607
    
    
    
    202,955Total liabilities
    
    
    4,948,141
    
    
    
    3,663,038
 Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Total revenues
    
    
    1,659,801
    
    
    
    12,049,761
    
    
    
    8,990,427Net loss
    
    
    890,998
    
    
    
    1,758,565
    
    
    
    1,367,126
   F-9




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##### Table of Contents



As of December 31,2009
    
    
    2010$
    
    
    $Cash and cash equivalents
    
    
    2,128,200
    
    
    
    41,914,203Unbilled accounts receivable, net of allowance for doubtful accounts
    
    
    13,814,540
    
    
    
    35,028,633Prepaid expenses and other current assets
    
    
    2,661,465
    
    
    
    10,192,141Total current assets
    
    
    18,604,205
    
    
    
    87,134,977Total noncurrent assets
    
    
    1,273,393
    
    
    
    5,402,561Total assets
    
    
    19,877,598
    
    
    
    92,537,538Accounts payable
    
    
    6,220,873
    
    
    
    2,457,880Accrued payroll and welfare expenses
    
    
    895,596
    
    
    
    5,387,306Income tax payable
    
    
    821,401
    
    
    
    2,667,793Other tax payable
    
    
    973,464
    
    
    
    2,553,470Other current liabilities
    
    
    3,894,307
    
    
    
    5,767,960Total current liabilities
    
    
    12,805,641
    
    
    
    18,834,409Deferred tax liabilities, non-current
    
    
    
    
    
    
    221,976Total liabilities
    
    
    12,805,641
    
    
    
    19,056,385
 Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Total revenues
    
    
    
    
    
    
    13,813,076
    
    
    
    66,876,338Net income
    
    
    
    
    
    
    147,922
    
    
    
    975,076
  (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
  (i) Customer deposits
   (j) Unbilled accounts receivable
  (k) Properties held for sale
  (l) Investment in affiliates
   F-11




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##### Table of Contents



(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
  (o) Impairment of long-lived assets
  (p) Impairment of goodwill and indefinite lived intangible assets
    (q) Income taxes
    F-12




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##### Table of Contents



(r) Share-based compensation
  (s) Revenue recognition
            F-13




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##### Table of Contents



(t) Cost of revenue
  (u) Advertising expenses
  (v) Foreign currency translation
    (w) Government subsidies
  (x) Concentration of credit risk
    F-14




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##### Table of Contents



2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Balance as of January 1
    
    
    2,441,796
    
    
    
    3,397,899
    
    
    
    13,799,920Provisions for doubtful accounts
    
    
    2,583,853
    
    
    
    13,739,796
    
    
    
    5,623,888Business acquisition
    
    
    
    
    
    
    2,440,358
    
    
    
    Write offs
    
    
    (1,691,021
    )
    
    
    (5,787,424
    )
    
    
    (1,084,209
    )Changes due to foreign exchange
    
    
    63,271
    
    
    
    9,291
    
    
    
    496,676Balance as of December 31
    
    
    3,397,899
    
    
    
    13,799,920
    
    
    
    18,836,275
  (y) Earnings per share
    Years Ended December 31,2008
    
    
    2009
    
    
    2010Net income attributable to E-House ordinary shareholders  basic
    
    $
    39,576,024
    
    
    $
    100,278,300
    
    
    $
    36,154,393Increase (decrease) of income from CRIC*
    
    
    
    
    
    $
    750,308
    
    
    $
    (278,491
    )Net income attributable to E-House ordinary shareholders  diluted
    
    $
    39,576,024
    
    
    $
    101,028,608
    
    
    $
    35,875,902Weighted average ordinary shares outstanding
    
    
    81,818,972
    
    
    
    79,643,079
    
    
    
    80,287,171Share options
    
    
    291,458
    
    
    
    813,131
    
    
    
    1,015,451Weighted average number of ordinary shares outstanding  diluted
    
    
    82,110,430
    
    
    
    80,456,210
    
    
    
    81,302,622Basic earnings per share
    
    $
    0.48
    
    
    $
    1.26
    
    
    $
    0.45Diluted earnings per share
    
    $
    0.48
    
    
    $
    1.25
    
    
    $
    0.44
 *
    
    In calculating diluted earnings per share, the amount of CRICs net income included in net
income attributable to E-Houses ordinary shareholders is calculated by multiplying CRICs diluted
EPS by the weighted average number of CRIC shares held by E-Houses during the period, which may
result in net income attributable to E-House ordinary shareholders, for purposes of computing
diluted earnings per share, being different from that actually recorded in the consolidated
statements of operations. This difference is presented as increase (decrease) of income from CRIC.
 (z) Non-controlling interest
   F-15




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##### Table of Contents



2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Net income attributable to E-House
    
    
    39,576,024
    
    
    
    100,278,300
    
    
    
    36,154,393Transfers (to) from the non-controlling interest:Increase in E-Houses additional paid-in capital for
sale of 71,400,000 CRIC common shares
    
    
    
    
    
    
    352,415,498
    
    
    
    Decrease in E-Houses additional paid-in capital for
purchase of 3,033,333 and 1,384,420 CRIC common shares
for the years ended December 31, 2009 and 2010,
respectively
    
    
    
    
    
    
    (17,446,572
    )
    
    
    (3,614,582
    )Decrease in E-Houses additional paid-in capital for the
exercise of CRICs options and the vesting of CRICs
restricted shares
    
    
    
    
    
    
    
    
    
    
    (1,995,625
    )Net transfers (to) from non-controlling interest
    
    
    
    
    
    
    334,968,926
    
    
    
    (5,610,207
    )Change from net income attributable to E-House and
transfers (to) from non-controlling interest
    
    
    39,576,024
    
    
    
    435,247,226
    
    
    
    30,544,186
 (aa) Comprehensive income
  (ab) Recently issued accounting pronouncements
    3. Properties Held for Sale
    F-16




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##### Table of Contents



4. Investment in Affiliates
   Allocated
    
    
    AmortizationValue
    
    
    Period$Cash acquired
    
    
    1,700,000Intangible assets:Advertising rights
    
    
    2,162,972
    
    
    10 yearsCustomer contract backlog
    
    
    252,607
    
    
    6 monthsLicense to CRIC database
    
    
    793,115
    
    
    10 yearsTotal
    
    
    4,908,694
      F-17




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##### Table of Contents



5. Acquisitions of Subsidiaries and Non-controlling Interest
   Amount$Fair value of CRICs shares issued*
    
    
    572,000,004Replacement of COHT share options
    
    
    14,960,796Consideration
    
    
    586,960,800Fair value of the Groups investment in COHT held before the business combination**
    
    
    27,078,000Total value to be allocated in purchase accounting
    
    
    614,038,800
 *
    
    The fair value of the 47,666,667 ordinary shares issued by the CRIC was based on the IPO
offering price of CRICs ADS.**
    
    As a result of the Group obtaining control over COHT, the Groups previously held equity
interest was remeasured to fair value of $27,078,000, with the excess of fair value over the
carrying amount recognized as a gain of $21,453,221.
  AmortizationAllocated Value
    
    
    Period$Total tangible assets acquired
    
    
    26,703,269Liabilities assumed
    
    
    (17,432,772
    )Intangible assets acquired: License agreements with SINA
    
    
    80,660,000
    
    
    10 years Real estate advertising agency agreement with SINA
    
    
    106,790,000
    
    
    10 years CRIC database license agreement
    
    
    8,300,000
    
    
    9 years Customer relationship
    
    
    5,580,000
    
    
    10 years Contract backlog
    
    
    110,000
    
    
    1 yearGoodwill
    
    
    444,885,665Deferred tax liabilities
    
    
    (41,557,362
    )Total
    
    
    614,038,800
     F-18




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##### Table of Contents



AmortizationAllocated Value
    
    
    Period$Cash
    
    
    1,265,772Other current assets
    
    
    1,463,529Liabilities assumed
    
    
    (4,390,507
    )Leasehold improvement
    
    
    2,077,479
    
    
    5-20 yearsPrepaid rent
    
    
    4,348,647
    
    
    20 yearsFavorable lease term
    
    
    2,428,110
    
    
    20 yearsTotal
    
    
    7,193,030
   AmortizationAllocated Value
    
    
    Period$Cash acquired
    
    
    1,759,968Intangible assetsCustomer advertising designing contracts
    
    
    130,924
    
    
    3 monthsNon-compete agreement
    
    
    145,720
    
    
    5 yearsGoodwill
    
    
    674,847Deferred tax liabilities
    
    
    (32,731
    )Total
    
    
    2,678,728
   AmortizationAllocated Value
    
    
    Period$Tangible assets acquired
    
    
    1,217,304Liabilities assumed
    
    
    (1,434,594
    )Intangible assetsNon-compete agreement
    
    
    853,192
    
    
    5 yearsGoodwill
    
    
    4,028,514Deferred tax liabilities
    
    
    (213,298
    )Total
    
    
    4,451,118
   F-19




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##### Table of Contents



6. Property and Equipment, Net
  As of December 31,2009
    
    
    2010$
    
    
    $Leasehold improvements
    
    
    9,215,325
    
    
    
    12,164,368Buildings
    
    
    3,755,633
    
    
    
    3,868,203Furniture, fixtures and equipment
    
    
    9,374,457
    
    
    
    15,226,064Motor vehicles
    
    
    4,068,224
    
    
    
    5,162,421Total
    
    
    26,413,639
    
    
    
    36,421,056Less: Accumulated depreciation
    
    
    (10,194,998
    )
    
    
    (15,118,269
    )Property and equipment, net
    
    
    16,218,641
    
    
    
    21,302,787
  7. Intangible Assets, Net
 As of December 31,2009
    
    
    2010$
    
    
    $Intangible assets not subject to amortization are comprised of the following:Trademark
    
    
    698,787
    
    
    
    720,473Intangible assets subject to amortization are comprised of the following:Customer contracts
    
    
    3,353,240
    
    
    
    3,343,892Non-compete agreements
    
    
    1,612,112
    
    
    
    2,074,417Computer software licenses
    
    
    2,027,248
    
    
    
    2,422,026License agreements with SINA
    
    
    80,660,000
    
    
    
    80,660,000Advertising agency agreement
    
    
    106,790,000
    
    
    
    106,790,000Database license
    
    
    8,300,000
    
    
    
    8,300,000Customer relationship
    
    
    5,788,603
    
    
    
    7,443,088Favorable lease term
    
    
    2,428,110
    
    
    
    2,428,110210,959,313
    
    
    
    213,461,533Less: Accumulated amortizationCustomer contracts
    
    
    (2,903,452
    )
    
    
    (3,343,892
    )Non-compete agreements
    
    
    (388,634
    )
    
    
    (768,887
    )Computer software licenses
    
    
    (661,625
    )
    
    
    (1,013,890
    )License agreements with SINA
    
    
    (2,016,500
    )
    
    
    (10,082,500
    )Advertising agency agreement
    
    
    (2,617,402
    )
    
    
    (13,087,010
    )Database license
    
    
    (244,118
    )
    
    
    (1,220,589
    )Customer relationship
    
    
    (40,622
    )
    
    
    (541,014
    )Favorable lease term
    
    
    (91,054
    )
    
    
    (212,459
    )Intangible assets subject to amortization, net
    
    
    201,995,906
    
    
    
    183,191,292Total intangible assets, net
    
    
    202,694,693
    
    
    
    183,911,765
   F-20




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##### Table of Contents



8. Goodwill
  Primary
    
    
    Secondary
    
    
    Real estatereal estate
    
    
    real estate
    
    
    information
    
    
    Real estateagency
    
    
    brokerage
    
    
    and consulting
    
    
    online
    
    
    Otherservices
    
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Balance as of January 1,
2009
    
    
    2,681,378
    
    
    
    73,024
    
    
    
    4,028,514
    
    
    
    
    
    
    
    674,847
    
    
    
    7,457,763Goodwill recognized upon
acquisition
    
    
    
    
    
    
    
    
    
    
    322,275
    
    
    
    444,885,665
    
    
    
    
    
    
    
    445,207,940Exchange rate translation
    
    
    2,511
    
    
    
    68
    
    
    
    
    
    
    
    
    
    
    
    (8,590
    )
    
    
    (6,011
    )Balance as of
December 31, 2009
    
    
    2,683,889
    
    
    
    73,092
    
    
    
    4,350,789
    
    
    
    444,885,665
    
    
    
    666,257
    
    
    
    452,659,692Goodwill recognized upon
acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    396,736
    
    
    
    
    
    
    
    396,736Exchange rate translation
    
    
    81,084
    
    
    
    2,208
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    83,292Balance as of
December 31, 2010
    
    
    2,764,973
    
    
    
    75,300
    
    
    
    4,350,789
    
    
    
    445,282,401
    
    
    
    666,257
    
    
    
    453,139,720
 9. Short-term Borrowing
  10. Repurchase of Shares
  11. Dividends
  12. Other Income
 Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Gain from sales of marketable securities
    
    
    405,781
    
    
    
    3,436,713
    
    
    
    Unrealized gains on marketable securities
    
    
    
    
    
    
    
    
    
    
    679,626Government subsidies (Note 2 (w))
    
    
    1,247,468
    
    
    
    4,759,411
    
    
    
    4,080,900Reimbursement income from depository agent
    
    
    778,196
    
    
    
    626,888
    
    
    
    542,056Gain (loss) from sales of properties held for sale (Note 3)
    
    
    
    
    
    
    (121,639
    )
    
    
    1,348,003Gain from bargain purchase
    
    
    
    
    
    
    
    
    
    
    392,524Foreign exchange gain (loss) (Note 2 (v))
    
    
    (460,964
    )
    
    
    78,997
    
    
    
    (1,453,940
    )Total other income
    
    
    1,970,481
    
    
    
    8,780,370
    
    
    
    5,589,169
  F-21




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##### Table of Contents



13. Income Tax
  Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Current TaxPRC
    
    
    9,328,732
    
    
    
    29,967,894
    
    
    
    18,153,060Other
    
    
    1,549,525
    
    
    
    48,961
    
    
    
    2,513,07410,878,257
    
    
    
    30,016,855
    
    
    
    20,666,134Deferred TaxPRC
    
    
    (2,165,699
    )
    
    
    (10,092,774
    )
    
    
    (7,969,900
    )Other
    
    
    
    
    
    
    
    
    
    
    (2,165,699
    )
    
    
    (10,092,774
    )
    
    
    (7,969,900
    )Income tax expense
    
    
    8,712,558
    
    
    
    19,924,081
    
    
    
    12,696,234
           F-22




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##### Table of Contents



As of December 31,2009
    
    
    2010$
    
    
    $Deferred tax assets:Accrued salary expenses
    
    
    7,099,622
    
    
    
    8,796,784Bad debt provision
    
    
    4,374,469
    
    
    
    4,566,526Net operating loss carry forwards
    
    
    3,553,681
    
    
    
    6,950,541Other
    
    
    313,578
    
    
    
    869,155Gross deferred tax assets
    
    
    15,341,350
    
    
    
    21,183,006Valuation allowance
    
    
    (157,085
    )
    
    
    (183,392
    )Total deferred tax assets
    
    
    15,184,265
    
    
    
    20,999,614Analysis as:Current
    
    
    13,337,020
    
    
    
    17,284,547Non-current
    
    
    1,847,245
    
    
    
    3,715,067Deferred tax liabilities:Amortization of intangible and other assets
    
    
    42,326,523
    
    
    
    40,152,455Analysis as:Current
    
    
    
    
    
    
    Non-current
    
    
    42,326,523
    
    
    
    40,152,455
  2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Balance as of January 1,
    
    
    2,015,366
    
    
    
    3,207,372
    
    
    
    157,085Additions
    
    
    1,847,356
    
    
    
    28,273
    
    
    
    21,110Business acquisition
    
    
    
    
    
    
    292,638
    
    
    
    Releases
    
    
    (827,828
    )
    
    
    (3,372,782
    )
    
    
    Changes due to foreign exchange
    
    
    172,478
    
    
    
    1,584
    
    
    
    5,197Balance as of December 31,
    
    
    3,207,372
    
    
    
    157,085
    
    
    
    183,392
   F-23




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##### Table of Contents



Years Ended December 31,2008
    
    
    2009
    
    
    2010PRC income tax rate
    
    
    25.00
    %
    
    
    25.00
    %
    
    
    25.00
    %Expenses not deductible for tax purposes
    
    
    0.48
    %
    
    
    2.90
    %
    
    
    12.10
    %Effect of tax preference
    
    
    (9.13
    %)
    
    
    (6.79
    %)
    
    
    (9.25
    %)Effect of different tax rate of subsidiary operation in other jurisdiction
    
    
    (0.37
    %)
    
    
    (0.91
    %)
    
    
    (0.34
    %)Tax refund
    
    
    
    
    
    
    
    
    
    
    (6.95
    %)Other
    
    
    2.23
    %
    
    
    (2.90
    %)
    
    
    0.03
    %18.21
    %
    
    
    17.30
    %
    
    
    20.59
    %
  Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $The aggregate dollar effect
    
    
    
    
    
    
    1,433,584
    
    
    
    9,530,020Per share effect  basic
    
    
    
    
    
    
    0.02
    
    
    
    0.12Per share effect  diluted
    
    
    
    
    
    
    0.02
    
    
    
    0.12
   14. Share-Based Compensation
 E-Houses Share Incentive Plan (the E-House Plan)
  Share Options:
   2008Average risk-free rate of return
    
    
    3.98
    %Contractual life of option
    
    
    10 yearsAverage estimated volatility rate
    
    
    59.3
    %Average dividend yield
    
    
    0.00
    %
   F-24




---



##### Table of Contents



WeightedWeighted
    
    
    average
    
    
    AggregateAverage
    
    
    remaining
    
    
    IntrinsicNumber of
    
    
    exercise
    
    
    contractual
    
    
    value ofoptions
    
    
    Price
    
    
    term
    
    
    options$
    
    
    
    
    
    $Outstanding, as of January 1, 2010
    
    
    1,759,437
    
    
    
    5.38GrantedExercised
    
    
    (301,192
    )
    
    
    5.39Forfeited
    
    
    (16,170
    )
    
    
    5.37CancelledOutstanding, as of December 31, 2010
    
    
    1,442,075
    
    
    
    5.38
    
    
    7.0 years
    
    
    13,810,857Vested and expected to vest as of December 31, 2010
    
    
    1,435,486
    
    
    
    5.38
    
    
    7.0 years
    
    
    13,747,673Exercisable as of December 31, 2010
    
    
    1,029,660
    
    
    
    5.39
    
    
    6.9 years
    
    
    9,855,797
  Restricted Shares:
  WeightedaverageNumber of
    
    
    grant-date fairrestricted shares
    
    
    value$Unvested as of January 1, 2010
    
    
    931,000
    
    
    
    18.93Granted
    
    
    972,000
    
    
    
    14.00Vested
    
    
    (305,465
    )
    
    
    18.93Forfeited
    
    
    (14,500
    )
    
    
    18.93Unvested as of December 31, 2010
    
    
    1,583,035
    
    
    
    16.39
     F-25




---



##### Table of Contents



CRICs Share Incentive Plan (the CRIC Plan)
  Share Options:
   2009Average risk-free rate of return
    
    
    3.22
    %Contractual life of option
    
    10 yearsAverage estimated volatility rate
    
    
    71.79
    %Average dividend yield
    
    
    0.00
    %
    Replacement of COHTs Options with CRIC Options (Options Replacement Program
   2009Average risk-free rate of return
    
    
    2.47
    %Contractual life of option
    
    5.2 yearsAverage estimated volatility rate
    
    
    63.18
    %Average dividend yield
    
    
    0.00
    %
  F-26




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##### Table of Contents



WeightedWeighted
    
    
    average
    
    
    Aggregateaverage
    
    
    remaining
    
    
    intrinsicNumber of
    
    
    exercise
    
    
    contractual
    
    
    value ofOptions
    
    
    price
    
    
    term
    
    
    options$
    
    
    
    
    
    $Outstanding, as of January 1, 2010
    
    
    11,342,000
    
    
    
    3.16GrantedExercised
    
    
    (752,183
    )
    
    
    2.07Forfeited
    
    
    (153,788
    )
    
    
    3.06Modified
    
    
    Cancelled
    
    
    Outstanding, as of December 31, 2010
    
    
    10,436,029
    
    
    
    3.24
    
    
    6.94 years
    
    
    66,324,196Vested and expected to vest as of December 31, 2010
    
    
    10,170,559
    
    
    
    3.24
    
    
    6.94 years
    
    
    64,706,092Exercisable as of December 31, 2010
    
    
    3,176,323
    
    
    
    2.82
    
    
    6.38 years
    
    
    21,533,694
   Restricted Shares:
  WeightedaverageNumber of
    
    
    grant-date fairrestricted shares
    
    
    value$Unvested as of January 1, 2010
    
    
    300,000
    
    
    
    2.59Granted
    
    
    
    
    
    
    Vested
    
    
    (75,000
    )
    
    
    2.59Forfeited
    
    
    
    
    
    
    Unvested as of December 31, 2010
    
    
    225,000
    
    
    
    2.59
    15. Employee Benefit Plans
  16. Distribution of Profits
    F-27




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##### Table of Contents



17. Segment Information
    F-28




---



##### Table of Contents



Real estateSecondary
    
    
    informationPrimary real
    
    
    real estate
    
    
    andestate agency
    
    
    brokerage
    
    
    consulting
    
    
    Other2008
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    Non-allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues
    
    
    88,601,982
    
    
    
    14,836,943
    
    
    
    49,116,061
    
    
    
    1,932,469
    
    
    
    
    
    
    
    154,487,455Cost of revenues
    
    
    (27,232,660
    )
    
    
    (1,725,941
    )
    
    
    (2,855,398
    )
    
    
    (41,849
    )
    
    
    
    
    
    
    (31,855,848
    )Selling, general
and administrative
expenses
    
    
    (34,075,314
    )
    
    
    (20,209,062
    )
    
    
    (13,776,504
    )
    
    
    (2,329,020
    )
    
    
    (6,807,731
    )
    
    
    (77,197,631
    )Income (loss) from
operations
    
    
    27,294,008
    
    
    
    (7,098,060
    )
    
    
    32,484,159
    
    
    
    (438,400
    )
    
    
    (6,807,731
    )
    
    
    45,433,976Interest expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,420,468
    )
    
    
    (2,420,468
    )Interest income
    
    
    551,576
    
    
    
    30,475
    
    
    
    415,512
    
    
    
    8,152
    
    
    
    2,056,798
    
    
    
    3,062,513Other income
(expense), net
    
    
    1,422,744
    
    
    
    22,483
    
    
    
    (1,323,858
    )
    
    
    
    
    
    
    1,849,112
    
    
    
    1,970,481Income (loss)
before taxes and
equity in
affiliates
    
    
    29,268,328
    
    
    
    (7,045,102
    )
    
    
    31,575,813
    
    
    
    (430,248
    )
    
    
    (5,322,289
    )
    
    
    48,046,502Income tax benefit
(expense)
    
    
    (4,153,861
    )
    
    
    52,535
    
    
    
    (4,917,503
    )
    
    
    306,271
    
    
    
    
    
    
    
    (8,712,558
    )Income (loss)
before equity in
affiliates
    
    
    25,114,467
    
    
    
    (6,992,567
    )
    
    
    26,658,310
    
    
    
    (123,977
    )
    
    
    (5,322,289
    )
    
    
    39,333,944Income from equity
in affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    153,700
    
    
    
    153,700Net income (loss)
    
    
    25,114,467
    
    
    
    (6,992,567
    )
    
    
    26,658,310
    
    
    
    (123,977
    )
    
    
    (5,168,589
    )
    
    
    39,487,644
  F-29




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##### Table of Contents



Real estateSecondary
    
    
    informationPrimary real
    
    
    real estate
    
    
    and
    
    
    Real estateestate agency
    
    
    brokerage
    
    
    consulting
    
    
    online
    
    
    Other2009
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    Non-allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues
    
    
    183,154,000
    
    
    
    28,447,714
    
    
    
    61,707,295
    
    
    
    13,829,937
    
    
    
    12,399,710
    
    
    
    
    
    
    
    299,538,656Cost of revenues
    
    
    (55,655,737
    )
    
    
    (1,877,546
    )
    
    
    (1,865,697
    )
    
    
    (4,930,280
    )
    
    
    (6,014,185
    )
    
    
    
    
    
    
    (70,343,445
    )Selling, general
and administrative
expenses
    
    
    (47,241,533
    )
    
    
    (26,123,163
    )
    
    
    (22,723,019
    )
    
    
    (11,359,944
    )
    
    
    (6,338,251
    )
    
    
    (11,935,269
    )
    
    
    (125,721,179
    )Gain from
settlement of
pre-existing
relationship
    
    
    
    
    
    
    
    
    
    
    2,100,832
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,100,832Income (loss) from
operations
    
    
    80,256,730
    
    
    
    447,005
    
    
    
    39,219,411
    
    
    
    (2,460,287
    )
    
    
    47,274
    
    
    
    (11,935,269
    )
    
    
    105,574,864Interest expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (215,854
    )
    
    
    (215,854
    )Interest income
    
    
    591,772
    
    
    
    29,130
    
    
    
    166,521
    
    
    
    23,722
    
    
    
    29,557
    
    
    
    198,087
    
    
    
    1,038,789Other income
(expense), net
    
    
    1,842,672
    
    
    
    279,030
    
    
    
    2,481,451
    
    
    
    5,814
    
    
    
    (1,810
    )
    
    
    4,173,213
    
    
    
    8,780,370Income (loss)
before taxes and
equity in
affiliates
    
    
    82,691,174
    
    
    
    755,165
    
    
    
    41,867,383
    
    
    
    (2,430,751
    )
    
    
    75,021
    
    
    
    (7,779,823
    )
    
    
    115,178,169Income tax benefit
(expense)
    
    
    (15,981,753
    )
    
    
    2,204,395
    
    
    
    (6,710,032
    )
    
    
    957,085
    
    
    
    (393,776
    )
    
    
    
    
    
    
    (19,924,081
    )Income (loss)
before equity in
affiliates
    
    
    66,709,421
    
    
    
    2,959,560
    
    
    
    35,157,351
    
    
    
    (1,473,666
    )
    
    
    (318,755
    )
    
    
    (7,779,823
    )
    
    
    95,254,088Income from equity
in affiliates
    
    
    112,628
    
    
    
    
    
    
    
    
    
    
    
    22,015,607
    
    
    
    
    
    
    
    
    
    
    
    22,128,235Net income (loss)
    
    
    66,822,049
    
    
    
    2,959,560
    
    
    
    35,157,351
    
    
    
    20,541,941
    
    
    
    (318,755
    )
    
    
    (7,779,823
    )
    
    
    117,382,323
  F-30




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##### Table of Contents



Real estateSecondary
    
    
    informationPrimary real
    
    
    real estate
    
    
    and
    
    
    Real estateestate agency
    
    
    brokerage
    
    
    consulting
    
    
    online
    
    
    Other2010
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    services
    
    
    Non-allocated
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Revenues
    
    
    173,081,747
    
    
    
    20,892,641
    
    
    
    75,110,282
    
    
    
    66,804,671
    
    
    
    20,635,786
    
    
    
    
    
    
    
    356,525,127Cost of revenues
    
    
    (62,946,388
    )
    
    
    (890,545
    )
    
    
    (3,016,516
    )
    
    
    (26,361,391
    )
    
    
    (11,631,655
    )
    
    
    
    
    
    
    (104,846,495
    )Selling, general
and administrative
expenses
    
    
    (46,975,421
    )
    
    
    (29,429,044
    )
    
    
    (35,214,081
    )
    
    
    (54,741,152
    )
    
    
    (8,978,057
    )
    
    
    (23,087,167
    )
    
    
    (198,424,922
    )Income (loss) from
operations
    
    
    63,159,938
    
    
    
    (9,426,948
    )
    
    
    36,879,685
    
    
    
    (14,297,872
    )
    
    
    26,074
    
    
    
    (23,087,167
    )
    
    
    53,253,710Interest income
    
    
    1,035,826
    
    
    
    35,213
    
    
    
    1,156,337
    
    
    
    286,154
    
    
    
    114,293
    
    
    
    180,008
    
    
    
    2,807,831Other income
(expense), net
    
    
    1,845,960
    
    
    
    195,509
    
    
    
    2,360,398
    
    
    
    (22,831
    )
    
    
    726,952
    
    
    
    483,181
    
    
    
    5,589,169Income (loss)
before taxes and
equity in
affiliates
    
    
    66,041,724
    
    
    
    (9,196,226
    )
    
    
    40,396,420
    
    
    
    (14,034,549
    )
    
    
    867,319
    
    
    
    (22,423,978
    )
    
    
    61,650,710Income tax benefit
(expense)
    
    
    (9,987,481
    )
    
    
    334,285
    
    
    
    (2,911,786
    )
    
    
    455,815
    
    
    
    (587,067
    )
    
    
    
    
    
    
    (12,696,234
    )Income (loss)
before equity in
affiliates
    
    
    56,054,243
    
    
    
    (8,861,941
    )
    
    
    37,484,634
    
    
    
    (13,578,734
    )
    
    
    280,252
    
    
    
    (22,423,978
    )
    
    
    48,954,476Loss from equity
in affiliates
    
    
    (2,277
    )
    
    
    
    
    
    
    (271,300
    )
    
    
    (5,085
    )
    
    
    
    
    
    
    
    
    
    
    (278,662
    )Net income (loss)
    
    
    56,051,966
    
    
    
    (8,861,941
    )
    
    
    37,213,334
    
    
    
    (13,583,819
    )
    
    
    280,252
    
    
    
    (22,423,978
    )
    
    
    48,675,814
 Geographic
  Major customers
  Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Customer A
    
    
    32,498,047
    
    
    
    70,541,996
    
    
    
    58,986,246
  As of December 31,2009
    
    
    2010$
    
    
    $Customer B
    
    
    19,021,127
    
    
    
    *
 *
    
    indicates the accounts receivable from the customer was less than 10% as of the stated year
end.  F-31




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##### Table of Contents



As of December 31,2009
    
    
    2010$
    
    
    $Customer C
    
    
    13,912,841
    
    
    
    14,344,620Customer D
    
    
    *
    
    
    
    44,000,000Customer E
    
    
    7,322,550
    
    
    
    *Customer F
    
    
    7,322,550
    
    
    
    *Customer G
    
    
    4,393,530
    
    
    
    *
 *
    
    indicates the customer deposits from customers was less than 10% as of the stated year end. 18. Related Party Balances and Transactions
  As of December 31,2009
    
    
    2010$
    
    
    $Customer and supplier
    
    
    17,146
    
    
    
    19,447Other
    
    
    1,025,157
    
    
    
    Total amounts due from related parties
    
    
    1,042,303
    
    
    
    19,447
  As of December 31,2009
    
    
    2010$
    
    
    $Management
    
    
    1,050,000
    
    
    
    787,500Other
    
    
    
    
    
    
    4,367,157Total amounts due to related parties
    
    
    1,050,000
    
    
    
    5,154,657
 (a) Customer and supplier
  Years Ended December 31,2008
    
    
    2009
    
    
    2010$
    
    
    $
    
    
    $Revenue  Shanghai Yueshun Real Estate Development Co., Ltd.
    
    
    321
    
    
    
    102,708
    
    
    
    7,139
 As of December 31,2009
    
    
    2010$
    
    
    $Accounts receivable  Shanghai Yueshun Real Estate Development Co., Ltd.
    
    
    17,146
    
    
    
    19,447
  (b) Management
   F-32




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##### Table of Contents



(c) Affiliates
  As of December 31,2009
    
    
    2010$
    
    
    $E-House China Real Estate Investment Fund I, L.P. (1)
    
    
    1,025,157
    
    
    
    (4,000,000
    )Shanghai Yueshun Real Estate Development Co., Ltd.(2)
    
    
    
    
    
    
    (6,077
    )Shanghai Jin Yue Real Estate Development Co., Ltd. (3)
    
    
    
    
    
    
    (361,080
    )
  (1)
    
    Entity is partially owned by Xin Zhou and Neil Nanpeng Shen, directors of the Company (note (d)
below). The amount receivable represents payment made on behalf of E-House China Real Estate
Investment Fund I, L.P. As of December 31, 2009, the balance was unsecured, interest free and had
no fixed repayment term. The amount was repaid in March 2010. In December 2010, the Group received
$4 million on behalf of E-House China Real Estate Investment Fund I, L.P., which was unsecured,
interest free and had no fixed repayment term. The amount was repaid in January 2011.(2)
    
    Xin Zhou is a director of the entity. The amount payable is the rental income received by the
Group on behalf of the entity.(3)
    
    Xin Zhou is a director of the entity. The amount payable is rental expense paid by the entity
on behalf of E-Commercial (Shanghai) Real Estate Advisory Co, Ltd. (d) Real Estate Investment Fund Management
     19. Commitments and Contingencies
 (a) Operating lease commitments
   Year ending December 31
    
    $2011
    
    
    13,362,6032012
    
    
    9,991,1182013
    
    
    5,701,4402014
    
    
    1,473,0012015
    
    
    606,128Total
    
    
    31,134,290
 (b) Baidus web channels commitments
   F-33




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##### Table of Contents



Year Ending December 31
    
    $2011
    
    
    7,549,8002012
    
    
    7,549,8002013
    
    
    7,549,800Total
    
    
    22,649,400
 (c) Fund investment commitments
  (d) Contingencies
   20. Subsequent Events
       F-34