2006 Annual Report

2006 Annual Report		Page
	Name
Cover Corporate Profile Financial Highlights Letter to Shareholders Office Network Form 20-F Table of Contents Forward Looking Statements Certain Terms and Contentions PART I Item 1. Identity of Directors, Senior Managem... Item 2. Offer Statistics and Expected Timetab... Item 3. Key Information A. Selected Financial Data Exchange Rate Information B. Capitalization and Indebtedness C. Reasons for the Offer and Use of Proceeds D. Risk Factors Risks Related to Our Business Risks Related to Our Corporate Structure Risks Related to the People's Republic of Chi... Risks Related to Our ADSs Item 4. Information on the Company A. History and Development of the Company B. Business Overview Our Product and Services Recruitment related services City Other human resource related services Technology Competition Print advertising Online recruitment services Other services Customers Sales and Marketing Intellectual Property and Proprietary Rights Regulation Limitations on Foreign Ownership of Our Busin... Advertising Human resource services companies Internet content providers Recent changes in regulation General Regulation of Our Businesses Advertising Human resource Internet content services and online commerce... Regulations Relating to Our Intellectual Prop... Regulations Relating to Internet Privacy Regulation of Foreign Currency Exchange and D... Foreign currency exchange Dividend distribution C. Organizational Structure Our May 2004 Restructuring and Arrangements w... Group Ownership Structure Description of the Material Group Entities 51net Tech JV Qian Cheng RAL AdCo and the AdCo Subsidiaries WFOE Wang Ju Contractual Arrangements Among Our Group Enti... Contractual arrangements with RAL Contractual arrangements with Qian Cheng D. Property, Plants and Equipment Item 4A. Unresolved Staff Comments Item 5. Operating and Financial Review and Pr... A. Overview Revenues Recruitment related revenues Other human resource related revenues Net revenues and business taxes Costs Cost of services Operating expenses Income Taxation Critical Accounting Policies Income taxes Share-based compensation Basis for consolidation and our relationships... Allowances for doubtful accounts Long-lived assets Results of Operations 2006 compared to 2005 2005 compared to 2004 Unaudited Quarterly Results of Operations B. Liquidity and Capital Resources Liquidity Capital resources C. Research and Development D. Trend Information E. Off-Balance Sheet Arrangements F. Contractual Obligations Recent Accounting Pronouncements A. Directors and Senior Management Item 6. Directors, Senior Management and Empl... Biographical Information B. Compensation Compensation of Directors and Executive Offic... Directors' and Officers' Liability Insurance Employment Agreements Stock-Based Compensation Plans C. Board Practices Board Committees Audit committee Nominating and corporate governance committee... Compensation committee Duties of Directors Interested Transactions Remuneration and Borrowing Qualification Terms of Directors and Executive Officers Limitation on Liability and Other Indemnifica... D. Employees E. Share Ownership A. Major Shareholders Name Item 7. Major Shareholders and Related Party ... B. Related Party Transactions Stock Option Grants Loans and Advances Business Alliance with Recruit Transactions Among Our Subsidiaries and Affil... C. Interests of Experts and Counsel A. Consolidated Statements and Other Financia... Legal Proceedings Dividend Policy B. Significant Changes A. Offer and Listing Details Item 8. Financial Information Item 9. The Offer and Listing Item 10. Additional Information B. Plan of Distribution C. Markets D. Selling Shareholders E. Dilution F. Expenses of the Issue A. Share Capital B. Memorandum and Articles of Association C. Material Contracts D. Exchange Controls E. Taxation Cayman Islands Taxation United States Federal Income Taxation ADSs Distributions on ADSs or common shares Sale, exchange or other disposition of ADSs o... Passive foreign investment company rules Information reporting and backup withholding Enforceability of Civil Liabilities F. Dividends and Paying Agents G. Statements by Experts H. Documents on Display I. Subsidiary Information Interest rate risk Foreign exchange risk Item 11. Quantitative and Qualitative Disclos... Item 12. Description of Securities Other than... PART II Item 13. Defaults, Dividend Arrearages and De... Item 14. Material Modifications to the Rights... Item 15. Controls and Procedures Evaluation of Disclosure Controls and Procedu... Report of Management on Internal Control over... Changes in Internal Controls Pre-Approved Policies and Procedures Item 16A. Audit Committee Financial Expert Item 16B. Code of Ethics Item 16C. Principal Accountant Fees and Servi... Item 16D. Exemptions from the Listing Standar... Item 16E. Purchases of Equity Securities by t... PART III Item 17. Financial Statements Item 18. Financial Statements Item 19. Exhibits 1. ORGANIZATION AND NATURE OF OPERATIONS 2. PRINCIPAL ACCOUNTING POLICIES 3. ACCOUNTS RECEIVABLE 4. PREPAYMENTS AND OTHER CURRENT ASSETS 5. PROPERTY AND EQUIPMENT 6. INTANGIBLE ASSETS 7. OTHER PAYABLES AND ACCRUALS 8. TAXATION 9. INITIAL PUBLIC OFFERING 10. SERIES A PREFERENCE SHARES 11. SHARE-BASED COMPENSATION 12. EMPLOYEE BENEFITS 13. RELATED PARTY TRANSACTIONS 14. EARNINGS PER SHARE 15. COMMITMENTS AND CONTINGENCIES 16. FINANCIAL INSTRUMENTS 17. CERTAIN RISKS AND CONCENTRATION 18. SUBSEQUENT EVENTS 1. BASIS OF PRESENTATION 2. RELATED PARTY BALANCES 3. COMMITMENTS 4. FOREIGN CURRENCIES Report of Independent Registered Public Accou... Consolidated Statements of Operations and Com... Consolidated Balance Sheets as of December 31... Consolidated Statements of Shareholders’ Equi... Consolidated Statements of Cash Flows for the... Notes to the Consolidated Financial Statement... Additional Information - Financial Statement ... Corporate Information Back Cover