Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2013 | |
Document and Entity Information | ' |
Entity Registrant Name | 'ChinaCache International Holdings Ltd. |
Entity Central Index Key | '0001498576 |
Document Type | '20-F |
Document Period End Date | 31-Dec-13 |
Amendment Flag | 'false |
Current Fiscal Year End Date | '--12-31 |
Entity Well-known Seasoned Issuer | 'No |
Entity Voluntary Filers | 'No |
Entity Current Reporting Status | 'Yes |
Entity Filer Category | 'Accelerated Filer |
Entity Common Stock, Shares Outstanding | 374,464,476 |
Document Fiscal Year Focus | '2013 |
Document Fiscal Period Focus | 'FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY |
Current assets: | ' | ' | ' |
Cash and cash equivalents | $55,849 | 338,092 | 317,137 |
Restricted Cash | 9,911 | 60,000 | ' |
Accounts receivable (net of allowance for doubtful accounts of RMB 25,545 and RMB 11,894 (US$1,965) as of December 31, 2012 and 2013, respectively) | 50,587 | 306,237 | 230,199 |
Prepaid expenses and other current assets | 8,351 | 50,549 | 31,240 |
Available-for-sale investments | 4,070 | 24,636 | ' |
Deferred tax assets | 1,172 | 7,096 | 13,626 |
Amounts due from a related party | 23 | 141 | 8,640 |
Total current assets | 129,963 | 786,751 | 600,842 |
Non-current assets: | ' | ' | ' |
Property and equipment, net | 39,753 | 240,650 | 179,239 |
Cloud infrastructure construction in progress | 2,021 | 12,236 | ' |
Intangible assets, net | 919 | 5,563 | 3,368 |
Land use right, net | 8,380 | 50,730 | ' |
Long term investments | 3,543 | 21,450 | 15,136 |
Available-for-sale investments | 2,022 | 12,240 | 82,292 |
Deferred tax assets | 284 | 1,719 | 6,166 |
Long term deposits and other non-current assets | 5,919 | 35,829 | 13,847 |
Total non-current assets | 62,841 | 380,417 | 300,048 |
TOTAL ASSETS | 192,804 | 1,167,168 | 900,890 |
Current liabilities: | ' | ' | ' |
Short-term loan | 9,911 | 60,000 | ' |
Accounts payable (including accounts payable of the VIEs without recourse to the Company of RMB103,261 and RMB200,483 (US$33,117) as of December 31, 2012 and 2013, respectively) | 33,657 | 203,750 | 106,399 |
Accrued employee benefits (including accrued employee benefits of the VIEs without recourse to the Company of RMB26,441 and RMB33,448 (US$5,525) as of December 31, 2012 and 2013, respectively) | 7,255 | 43,922 | 36,084 |
Accrued expenses and other payables (including accrued expenses and other payables of the VIEs without recourse to the Company of RMB48,776 and RMB71,095 (US$11,745) as of December 31, 2012 and 2013, respectively) | 25,947 | 157,075 | 57,773 |
Income tax payable (including income taxes payable of the VIEs without recourse to the Company of RMB15,200 and RMB5,777 (US$954) as of December 31, 2012 and 2013, respectively) | 1,718 | 10,399 | 22,537 |
Liabilities for uncertain tax positions (including liabilities for uncertain tax positions of the VIEs without recourse to the Company of RMB4,050 and RMB6,296 (US$1,040) as of December 31, 2012 and 2013, respectively) | 1,906 | 11,540 | 11,786 |
Amounts due to related parties (including amounts due to related parties of the VIEs without recourse to the Company of RMB1,044 and RMB844 (US$139) as of December 31, 2012 and 2013, respectively) | 142 | 862 | 1,062 |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of nil and RMB24,360 (US$4,024) as of December 31, 2012 and 2013, respectively) | 4,024 | 24,360 | ' |
Total current liabilities | 84,560 | 511,908 | 235,641 |
Non-current liabilities: | ' | ' | ' |
Deferred government grant (including deferred government grant of the VIEs without recourse to the Company of RMB 3,360 and nil as of December 31, 2012 and 2013, respectively) | 4,024 | 24,360 | 3,360 |
Deferred tax liabilities | 351 | 2,127 | ' |
Total non-current liabilities | 351 | 2,127 | 3,360 |
Total liabilities | 84,911 | 514,035 | 239,001 |
Commitments and contingencies | ' | ' | ' |
Shareholders' equity: | ' | ' | ' |
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 374,464,476 and 374,464,476 shares issued and outstanding as of December 31, 2012 and 2013, respectively) | 47 | 282 | 275 |
Additional paid-in capital | 206,110 | 1,247,730 | 1,220,198 |
Treasury stock | -12,075 | -73,101 | -73,101 |
Statutory reserves | 219 | 1,326 | 1,326 |
Accumulated deficit | -86,601 | -524,261 | -490,032 |
Accumulated other comprehensive income | 193 | 1,157 | 3,223 |
Total shareholders' equity | 107,893 | 653,133 | 661,889 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $192,804 | 1,167,168 | 900,890 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical)(Consolidated Variable Interest Entity (VIEs)) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | USD ($) | CNY | CNY |
Accounts payable of the VIEs without recourse to the Company | $33,117 | 200,483 | 103,261 |
Accrued employee benefits of the VIEs without recourse to the Company | 5,525 | 33,448 | 26,441 |
Accrued expenses and other payables of the VIEs without recourse to the Company | 11,745 | 71,095 | 48,776 |
Income tax payable of the VIEs without recourse to the Company | 954 | 5,777 | 15,200 |
Liabilities for uncertain tax positions of the VIEs without recourse to the Company | 1,040 | 6,296 | 4,050 |
Amounts due to related parties of the VIEs without recourse to the Company | 139 | 844 | 1,044 |
Deferred government grant of the VIEs without recourse to the Company, current | 4,024 | 24,360 | 0 |
Deferred government grant of the VIEs without recourse to the Company, non-current | ' | 0 | 3,360 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | CNY | CNY | CNY | |
Net revenues | ' | ' | ' | ' |
-Third party customers | $182,243,000 | 1,103,243,000 | 801,189,000 | 618,422,000 |
-A related party customer | ' | ' | 12,543,000 | ' |
Net revenues | 182,243,000 | 1,103,243,000 | 813,732,000 | 618,422,000 |
Cost of revenues | -124,984,000 | -756,617,000 | -559,460,000 | -432,736,000 |
Gross profit | 57,259,000 | 346,626,000 | 254,272,000 | 185,686,000 |
Sales and marketing expenses | -20,579,000 | -124,578,000 | -87,597,000 | -72,040,000 |
General and administrative expenses (including provision for doubtful accounts of RMB2,786, RMB22,736 and RMB23,722 (US$3,918) for the years ended December 31, 2011, 2012 and 2013) | -25,368,000 | -153,568,000 | -106,115,000 | -57,308,000 |
Research and development expenses | -16,965,000 | -102,704,000 | -68,523,000 | -40,952,000 |
Impairment of an available-for-sale investment | 201,000 | 1,217,000 | 0 | 0 |
Post-acquisition settlement consideration | ' | ' | ' | -7,158,000 |
Operating income/ (loss) | -5,854,000 | -35,441,000 | -7,963,000 | 8,228,000 |
Interest income | 415,000 | 2,513,000 | 1,844,000 | 2,233,000 |
Interest expense | -592,000 | -3,584,000 | -1,340,000 | -1,254,000 |
Other (expenses)/ income | 1,137,000 | 6,886,000 | -1,758,000 | -5,165,000 |
Foreign exchange loss | -546,000 | -3,308,000 | -1,481,000 | -4,411,000 |
Loss from continuing operations before income taxes | -5,440,000 | -32,934,000 | -10,698,000 | -369,000 |
Income tax expense | -214,000 | -1,295,000 | -6,293,000 | -11,145,000 |
Net loss from continuing operations | -5,654,000 | -34,229,000 | -16,991,000 | -11,514,000 |
Income from discontinued operations | ' | ' | ' | 31,977,000 |
Net income/ (loss) | -5,654,000 | -34,229,000 | -16,991,000 | 20,463,000 |
Foreign currency translation | -326,000 | -1,975,000 | 29,000 | 773,000 |
Unrealized holding gain on available-for-sale investments | 301,000 | 1,821,000 | 1,594,000 | 90,000 |
Amounts reclassified from accumulated other comprehensive income | -316,000 | -1,912,000 | -224,000 | ' |
Total other comprehensive income (loss), net of tax | -341,000 | -2,066,000 | 1,399,000 | 863,000 |
Comprehensive income/ (loss) | ($5,995,000) | -36,295,000 | -15,592,000 | 21,326,000 |
Earnings/ (loss) per share | ' | ' | ' | ' |
Net loss from continuing operations (in CNY or dollars per share) | ($0.01) | -0.09 | -0.05 | -0.03 |
Income from discontinued operations (in CNY or dollars per share) | ' | ' | ' | 0.08 |
Basic (in CNY or dollars per share) | ($0.01) | -0.09 | -0.05 | 0.05 |
Net loss from continuing operations (in CNY or dollars per share) | ($0.01) | -0.09 | -0.05 | -0.03 |
Income from discontinued operations (in CNY or dollars per share) | ' | ' | ' | 0.08 |
Diluted (in CNY or dollars per share) | ($0.01) | -0.09 | -0.05 | 0.05 |
Shares used in earnings/ (loss) per share computations: | ' | ' | ' | ' |
Basic (in shares) | 362,916,540 | 362,916,540 | 363,780,875 | 381,984,517 |
Diluted (in shares) | 362,916,540 | 362,916,540 | 363,780,875 | 381,984,517 |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ' | ' | ' | ' |
Provision for doubtful accounts | $3,918 | 23,722 | 22,736 | 2,786 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | CNY | CNY | CNY | |
Cash flows from operating activities: | ' | ' | ' | ' |
Net Loss from continuing operations | ($5,654,000) | -34,229,000 | -16,991,000 | -11,514,000 |
Income from discontinued operations | ' | ' | ' | 31,977,000 |
Depreciation of property and equipment | 9,891,000 | 59,876,000 | 59,890,000 | 67,351,000 |
Amortization of acquired intangible assets and land use right | 313,000 | 1,892,000 | ' | 536,000 |
Allowance for doubtful accounts | 3,918,000 | 23,722,000 | 22,736,000 | 2,786,000 |
Impairment of an available for sales | 201,000 | 1,217,000 | 0 | 0 |
Loss/ (gain) from disposal of property and equipment | -270,000 | -1,637,000 | 939,000 | 4,852,000 |
Deferred tax (benefit)/ expense | 2,165,000 | 13,104,000 | -11,197,000 | -2,043,000 |
Interest expense | 314,000 | 1,899,000 | 1,340,000 | 4,616,000 |
Foreign exchange loss | 546,000 | 3,308,000 | 1,481,000 | 4,411,000 |
Gain from sale of available-for-sale investments | -233,000 | -1,413,000 | -224,000 | ' |
Share-based compensation | 1,957,000 | 11,852,000 | 16,088,000 | 26,956,000 |
Post-acquisition settlement consideration (Note 4(a)) | ' | ' | ' | 7,158,000 |
Gain on disposal of Shanghai JNet (Note 4(b)) | ' | ' | ' | -30,716,000 |
Changes in operating assets and liabilities: | ' | ' | ' | ' |
Accounts receivable | -16,476,000 | -99,739,000 | -97,635,000 | -56,643,000 |
Prepaid expense and other current assets | -3,189,000 | -19,309,000 | -7,831,000 | -17,891,000 |
Long term deposits and other non-current assets | -5,283,000 | -31,982,000 | ' | ' |
Amounts due to (from) related parties | 1,371,000 | 8,299,000 | -7,596,000 | ' |
Accounts payable | 16,081,000 | 97,351,000 | 46,781,000 | 5,457,000 |
Accrued employee benefits | 1,295,000 | 7,838,000 | 5,606,000 | 5,969,000 |
Deferred government grant | 3,469,000 | 21,000,000 | 3,360,000 | ' |
Accrued expenses and other payables | 11,649,000 | 70,526,000 | 10,068,000 | -9,372,000 |
Income tax payable | -2,005,000 | -12,138,000 | 5,083,000 | 24,776,000 |
Net cash provided by operating activities | 20,060,000 | 121,437,000 | 31,898,000 | 58,666,000 |
Cash flows from investing activities: | ' | ' | ' | ' |
Purchases of property and equipment | -16,176,000 | -97,926,000 | -102,391,000 | -77,563,000 |
Cash paid for long term deposits | ' | ' | -10,000,000 | ' |
Cash paid for entrusted loan | -1,030,000 | -6,233,000 | ' | ' |
Cash received from entrusted loan | 1,030,000 | 6,233,000 | ' | ' |
Deconsolidation of a consolidated VIE | ' | ' | ' | -2,204,000 |
Cash paid pursuant to post-acquisition settlement consideration agreement | ' | ' | ' | -4,286,000 |
Cash paid for long term investment (Note 10) | -1,043,000 | -6,314,000 | -6,000,000 | -9,136,000 |
Cash paid for available-for-sale investments (Note 11) | -2,022,000 | -12,240,000 | ' | -99,190,000 |
Cash received from sale of available-for-sale investments (Note 11) | 9,459,000 | 57,260,000 | 18,582,000 | ' |
Cash paid for land use right (Note 9) | -6,885,000 | -41,678,000 | ' | ' |
Cash paid for cloud infrastructure construction in progress (Note 9) | -2,021,000 | -12,236,000 | ' | ' |
Proceeds from disposal of property and equipment | 43,000 | 262,000 | 207,000 | ' |
Net cash used in investing activities | -18,645,000 | -112,872,000 | -99,602,000 | -192,379,000 |
Cash flows from financing activities: | ' | ' | ' | ' |
Proceeds from bank borrowings (Note 12) | 9,911,000 | 60,000,000 | ' | ' |
Proceeds from employee share options exercised | 2,591,000 | 15,683,000 | 3,351,000 | 4,019,000 |
Restricted cash (Note 12) | -9,911,000 | -60,000,000 | ' | ' |
Payment for repurchase of ordinary shares | ' | ' | -9,463,000 | -63,631,000 |
Payment of dividend | ' | ' | -130,000 | ' |
Net cash (used in)/ provided by financing activities | 2,591,000 | 15,683,000 | -6,242,000 | -59,612,000 |
Net (decrease)/ increase in cash and cash equivalents | 4,006,000 | 24,248,000 | -73,946,000 | -193,325,000 |
Cash and cash equivalents at beginning of the year | 52,387,000 | 317,137,000 | 392,535,000 | 592,706,000 |
Effect of foreign exchange rate changes on cash | -544,000 | -3,293,000 | -1,452,000 | -6,846,000 |
Cash and cash equivalents at end of the year | 55,849,000 | 338,092,000 | 317,137,000 | 392,535,000 |
Supplemental disclosures of cash flow information: | ' | ' | ' | ' |
Income taxes paid | 949,000 | 5,748,000 | 8,945,000 | 8,129,000 |
Interest paid | 278,000 | 1,685,000 | 36,000 | 539,000 |
Interest received | 415,000 | 2,513,000 | 1,844,000 | 2,233,000 |
Supplemental disclosures of non-cash activities: | ' | ' | ' | ' |
Acquisition of property and equipment included in accrued expenses and other payables | ($4,399,000) | -26,629,000 | -8,267,000 | -14,304,000 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | Total | Total | Ordinary shares | Ordinary shares | Additional paid-in capital | Additional paid-in capital | Treasury Stock | Treasury Stock | Statutory reserves | Statutory reserves | Accumulated deficit | Accumulated deficit | Accumulated other comprehensive income | Accumulated other comprehensive income |
USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | |
Balance at Dec. 31, 2010 | ' | 678,839,000 | ' | 270,000 | ' | 1,169,786,000 | ' | ' | ' | 1,326,000 | ' | -493,504,000 | ' | 961,000 |
Balance (in shares) at Dec. 31, 2010 | ' | ' | ' | 385,843,484 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ' | 20,463,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,463,000 | ' | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment | ' | 773,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 773,000 |
Unrealized holding gain on available-for-sale investments | ' | 90,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 90,000 |
Options and restricted shares award to employees (Note 15 (a) (b)) | ' | 24,257,000 | ' | ' | ' | 24,257,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Founder's option | ' | 1,084,000 | ' | ' | ' | 1,084,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Options to non-employees (Note 15 (c)) | ' | 1,615,000 | ' | ' | ' | 1,615,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of employee stock options | ' | 4,019,000 | ' | 4,000 | ' | 4,015,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of employee stock options (in shares) | ' | ' | ' | 5,232,224 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share issued to depository bank (in shares) | ' | ' | ' | 20,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Settlement of share options exercised with shares held by depository bank (in shares) | ' | ' | ' | -5,232,224 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase of shares | ' | -63,631,000 | ' | ' | ' | ' | ' | -63,631,000 | ' | ' | ' | ' | ' | ' |
Repurchase of shares (in shares) | ' | ' | ' | -26,261,776 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2011 | ' | 667,509,000 | ' | 274,000 | ' | 1,200,757,000 | ' | -63,631,000 | ' | 1,326,000 | ' | -473,041,000 | ' | 1,824,000 |
Balance (in shares) at Dec. 31, 2011 | ' | ' | ' | 379,581,708 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ' | -16,991,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -16,991,000 | ' | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment | ' | 29,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 29,000 |
Unrealized holding gain on available-for-sale investments | ' | 1,594,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,594,000 |
Amounts reclassified from accumulated other comprehensive income | ' | -224,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -224,000 |
Options and restricted shares award to employees (Note 15 (a) (b)) | ' | 16,086,000 | ' | ' | ' | 16,086,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of employee stock options | ' | 3,356,000 | ' | 1,000 | ' | 3,355,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of employee stock options (in shares) | ' | ' | ' | 2,406,272 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Settlement of share options exercised with shares held by depository bank (in shares) | ' | ' | ' | -2,406,272 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchase of shares | ' | -9,470,000 | ' | ' | ' | ' | ' | -9,470,000 | ' | ' | ' | ' | ' | ' |
Repurchase of shares (in shares) | ' | ' | ' | -5,117,232 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2012 | ' | 661,889,000 | ' | 275,000 | ' | 1,220,198,000 | ' | -73,101,000 | ' | 1,326,000 | ' | -490,032,000 | ' | 3,223,000 |
Balance (in shares) at Dec. 31, 2012 | ' | 374,464,476 | ' | 374,464,476 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | -5,654,000 | -34,229,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -34,229,000 | ' | ' |
Other comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment | ' | -1,975,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,975,000 |
Unrealized holding gain on available-for-sale investments | 301,000 | 1,821,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,821,000 |
Amounts reclassified from accumulated other comprehensive income | -316,000 | -1,912,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,912,000 |
Options and restricted shares award to employees (Note 15 (a) (b)) | ' | 11,852,000 | ' | ' | ' | 11,852,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of employee stock options | ' | 15,687,000 | ' | 7,000 | ' | 15,680,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of employee stock options (in shares) | ' | ' | ' | 11,277,280 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Settlement of share options exercised with shares held by depository bank (in shares) | ' | ' | ' | -11,277,280 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at Dec. 31, 2013 | $107,893,000 | 653,133,000 | $47,000 | 282,000 | $206,110,000 | 1,247,730,000 | ($12,075,000) | -73,101,000 | $219,000 | 1,326,000 | ($86,601,000) | -524,261,000 | $193,000 | 1,157,000 |
Balance (in shares) at Dec. 31, 2013 | 374,464,476 | ' | 374,464,476 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
ORGANIZATION
ORGANIZATION | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
ORGANIZATION | ' | |||||||||
ORGANIZATION | ' | |||||||||
1. ORGANIZATION | ||||||||||
ChinaCache International Holdings Ltd. (the ‘‘Company’’) was incorporated under the laws of the Cayman Islands on June 29, 2005. Upon incorporation, the Company was 99% owned by Consolidated Capital Holdings Ltd (‘‘CCH’’) which was under the control of Mr. Wang Song and his spouse Ms. Kou Xiaohong, (collectively known as the ‘‘Founders’’). Subsequently on April 12, 2007, CCH transferred 15% of its interest in the Company to Harvest Century International Limited (‘‘HCI’’), a company which is 100% owned by Ms. Kou Xiaohong. | ||||||||||
The Company through its subsidiaries and variable interest entities noted below are principally engaged in the provision of Content and Application Delivery services in the People’s Republic of China (the “PRC”). | ||||||||||
As of December 31, 2013, subsidiaries of the Company and variable interest entities (“VIEs”) where the Company is the primary beneficiary include the following: | ||||||||||
Date of incorporation | Place of incorporation | Percentage of | Principal activities | |||||||
ownership | ||||||||||
Subsidiaries | ||||||||||
ChinaCache Network Technology (Beijing) Ltd. (“ChinaCache Beijing”) | August 25, 2005 | The PRC | 100 | % | Provision of Technical Consultation services | |||||
ChinaCache North America Inc. (“ChinaCache US”) | August 16, 2007 | United States of America | 100 | % | Provision of Content and Application Delivery services | |||||
ChinaCache Ireland Limited (“ChinaCache IE”) | November 18, 2013 | Ireland | 100 | % | Provision of Content and Application Delivery services | |||||
ChinaCache Networks Hong Kong Ltd. (“ChinaCache HK”) | April 7, 2008 | Hong Kong | 100 | % | Provision of Content and Application Delivery services | |||||
JNet Holdings Limited (“JNet Holdings”) | September 27, 2007 | British Virgin Islands | 100 | % | Investment holding | |||||
ChinaCache Xin Run Technology (Beijing) Co., Ltd. (“Xin Run”) | July 18, 2011 | The PRC | 100 | % | Research & Development center | |||||
Metasequoia Investment Inc. (“Metasequoia”) | March 28, 2012 | British Virgin Islands | 100 | % | Investment holding | |||||
VIEs | ||||||||||
Beijing Blue I.T. Technologies Co., Ltd. (“Beijing Blue IT”)* | June 7, 1998 | The PRC | — | Provision of Content and Application Delivery services | ||||||
Beijing Jingtian Technology Limited (“Beijing Jingtian”) * | September 1, 2005 | The PRC | — | Provision of Content and Application Delivery services | ||||||
* The equity interest of Beijing Blue IT and Beijing Jingtian are held by the Founders and two employees of the Company, respectively (collectively the “Nominee Shareholders”). | ||||||||||
The following is a summary of the various VIE agreements: | ||||||||||
Exclusive option agreement | ||||||||||
Pursuant to the exclusive option agreement amongst the Company and the Nominee Shareholders, the Nominee Shareholders irrevocably granted the Company or its designated party, an exclusive option to purchase all or part of the equity interests held by the Nominee Shareholders in Beijing Blue IT, when and to the extent permitted under PRC law, at an amount equal to either a) the outstanding loan amount pursuant to the loan agreement owed by the Nominee Shareholders or b) the lowest permissible purchase price as set by PRC law. Such consideration, if in excess of the outstanding loan amount, when received by the Nominee Shareholders upon the exercise of the exclusive option is required to be remitted in full to ChinaCache Beijing. Beijing Blue IT cannot declare any profit distributions or grant loans in any form without the prior written consent of the Company. The Nominee Shareholders must remit in full any funds received from Beijing Blue IT to ChinaCache Beijing, in the event any distributions are made by the VIEs pursuant to any written consents of the Company. This agreement is valid for ten years and expires on September 23, 2015. Such agreement can be renewed for an additional ten years at the sole discretion of the Company, and the times of such renewals are unlimited. | ||||||||||
Similar exclusive option agreements were signed by ChinaCache Beijing with the VIEs, Shanghai JNet (Note 4(b)) and Beijing Jingtian, respectively. | ||||||||||
Exclusive business cooperation agreement | ||||||||||
Pursuant to the exclusive business cooperation agreement between ChinaCache Beijing and the VIEs, ChinaCache Beijing is to provide exclusive business support, technical and consulting services including technical services, business consultations, access to intellectual property licenses, equipment or property leasing, marketing consultancy, system integration, product research and development and system maintenance in return for fees in an amount as determined and adjustable at the sole discretion of ChinaCache Beijing. The service fees charged to Beijing Blue IT are based on methods set forth in the technical support and service agreement and technical consultation and training agreement, as further discussed below. The service fees charged to Beijing Jingtian is based on 100% of Beijing Jingtian’s net income. | ||||||||||
This agreement is valid for ten years and expires on September 23, 2015. Prior to this agreement’s and subsequent agreements’ expiration dates, ChinaCache Beijing can at its sole discretion renew at a term of its choice through written confirmation. | ||||||||||
Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement | ||||||||||
Pursuant to these agreements between ChinaCache Beijing and Beijing Blue IT, ChinaCache Beijing is to provide research and development, technical support, consulting, training and equipment leasing services in return for fees, which is adjustable at the sole discretion of ChinaCache Beijing. The fees charged to Blue IT include an annual fixed amount and a variable quarterly amount which is determined based on the following factors: | ||||||||||
· the number of ChinaCache Beijing’s employees who provided the services pursuant to the business cooperation agreement to Beijing Blue IT during the quarter (the “Quarterly Services”) and the qualifications of the employees; | ||||||||||
· the number of hours ChinaCache Beijing’s employees spent to provide the Quarterly Services; | ||||||||||
· operating expenses incurred by ChinaCache Beijing to provide the Quarterly Services; | ||||||||||
· nature and value of the Quarterly Services; and | ||||||||||
· Beijing Blue IT’s operating revenue for the quarter. | ||||||||||
The original term of each of these three agreements was five years running from September 23, 2005, and each of the agreements was renewed in September 2010 for a five year term which expires on September 23, 2015. The term of the equipment leasing agreement can be extended solely by ChinaCache Beijing by written notice prior to the expiration of the term, and the extended term shall be determined by ChinaCache Beijing. | ||||||||||
The exclusive business cooperation agreement, exclusive technical support and service agreement, exclusive technical consultation and training agreement, and equipment leasing agreement are collectively referred to as “Service Agreements”. | ||||||||||
Loan agreement | ||||||||||
The Company provided a loan facility of RMB10,000,000 to the Nominee Shareholders of Beijing Blue IT for the purpose of providing capital to Beijing Blue IT to develop its business. In addition, the Company also agreed to provide unlimited financial support to Beijing Blue IT for its operations and agree to forego the right to seek repayment in the event Beijing Blue IT is unable to repay such funding. The loan agreement between the Company and the Nominee Shareholders of Beijing Blue IT is valid for ten years and expires on September 23, 2015. Such agreement can be extended upon mutual written consent of the Company and the Nominee Shareholders of Beijing Blue IT. | ||||||||||
ChinaCache Beijing also provided a loan of RMB8,500,000 to the Nominee Shareholders of Beijing Jingtian for their investment in the registered share capital. In addition, the Company, through ChinaCache Beijing, agreed to provide unlimited financial support to Beijing Jingtian for their operations and agree to forego the right to seek repayment in the event this VIE are unable to repay such funding. The loan agreement between ChinaCache Beijing and the Nominee Shareholders of Beijing Jingtian is valid for ten years and expires on December 3, 2022. Such agreement can be extended upon mutual written consent of ChinaCache Beijing and the Nominee Shareholders of Beijing Jingtian. | ||||||||||
Power of attorney agreement | ||||||||||
The Nominee Shareholders entered into the power of attorney agreement whereby they granted an irrevocable proxy of the voting rights underlying their respective equity interests in the VIEs to ChinaCache Beijing, which includes, but are not limited to, all the shareholders’ rights and voting rights empowered to the Nominee Shareholders by the company law and the Company’s Article of Association. This agreement remains continuously valid, as long as the Nominee Shareholders continue to be the shareholders of the VIEs. | ||||||||||
Subsequently, ChinaCache Beijing assigned the power of attorney agreement to ChinaCache Beijing’s shareholders or a party designated by ChinaCache Beijing’s shareholders, to whom it granted an irrevocable proxy of the voting rights underlying their respective equity interests in the VIEs, which includes, but are not limited to, all the shareholders’ rights and voting rights empowered to the Nominee Shareholders by the company law and the Company’s Article of Association. | ||||||||||
Share pledge agreement | ||||||||||
Pursuant to the share pledge agreement between ChinaCache Beijing and the Nominee Shareholders, the Nominee Shareholders have pledged all their equity interests in the VIEs to guarantee the performance of the VIEs’ obligations under the Service Agreements. | ||||||||||
If the VIEs breach their respective contractual obligations under the business cooperation agreements, ChinaCache Beijing, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. The Nominee Shareholders agreed not to transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their equity interests in the VIEs without the prior written consent of ChinaCache Beijing. This agreement is continuously valid until all payments due under the above VIE agreements have been fulfilled by the VIEs. | ||||||||||
Despite the lack of technical majority ownership, there exists a parent-subsidiary relationship between the Company and the VIEs through the irrevocable powers of attorney agreement, whereby the Nominee Shareholders effectively assigned all of their voting rights underlying their equity interest in the VIEs to the Company. In addition, the Company, either directly or through ChinaCache Beijing, obtained effective control over the VIEs through the ability to exercise all the rights of the VIEs’ shareholders pursuant to the share pledge agreement and the exclusive option agreements. The Company demonstrates its ability and intention to continue to exercise the ability to absorb substantially all of the expected losses directly through the loan agreements. In addition, the Company also demonstrates its ability to receive substantially all of the economic benefits of the VIEs through ChinaCache Beijing using the Service Agreements. Thus, the Company is the primary beneficiary of the VIEs and consolidates the VIEs under by Accounting Standards Codification (“ASC”) Subtopic 810-10 (“ASC 810-10”) “Consolidation: Overall”. | ||||||||||
Legal compliance | ||||||||||
Assessing the legal validity and compliance of these above noted arrangements are a precursor to the Company’s ability to consolidate the results of operations and financial condition of its VIEs. In the opinion of the Company’s management and PRC counsel, (i) the ownership structure of the VIEs are in compliance with existing PRC laws and regulations; (ii) the contractual arrangements with the VIEs and their shareholders are valid, binding and enforceable, and will not result in any violation of PRC laws or regulations currently in effect; and (iii) the Company’s business operations are in compliance with existing PRC laws and regulations in all material respects. | ||||||||||
However, there is significant consolidation judgment due to the existence of substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to its opinion. If the current ownership structure of the Company and its contractual arrangements with its VIEs is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its ownership structure and operations in the PRC. To the extent that changes to and new PRC laws and regulations prohibit the Company’s VIE arrangements from also complying with the principles of consolidation, then the Company would no longer be able to consolidate and therefore would have to deconsolidate the financial position and results of operations of its VIEs. In the opinion of management, the likelihood of loss and deconsolidation in respect of the Company’s current ownership structure or the contractual arrangements with its VIEs is remote based on current facts and circumstances. | ||||||||||
There was no pledge or collateralization of the VIEs’ assets. Creditors of the VIEs have no recourse to the general credit of the Company, who is the primary beneficiary of the VIEs, and such amounts have been parenthetically presented on the face of the consolidated balance sheets. The Company has not provided any financial or other support that it was not previously contractually required to provide to the VIEs during the periods presented. | ||||||||||
The following tables represent the financial information of the consolidated VIEs as of December 31, 2012 and 2013 and for the years ended December 31, 2011, 2012 and 2013 before eliminating the intercompany balances and transactions between the consolidated VIEs and other entities within the Group: | ||||||||||
As of December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB | RMB | US$ | ||||||||
ASSETS: | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 69,503 | 77,400 | 12,786 | |||||||
Accounts receivable (net of allowance for doubtful accounts of RMB 24,369 and RMB 11,894 (US$1,965) as of December 31, 2012 and 2013, respectively) | 219,324 | 297,947 | 49,217 | |||||||
Prepaid expenses and other current assets | 23,393 | 25,871 | 4,274 | |||||||
Deferred tax assets | 12,878 | 6,546 | 1,081 | |||||||
Amounts due from inter-companies(1) | — | 6,300 | 1,041 | |||||||
Amounts due from a related party(2) | — | 141 | 23 | |||||||
Total current assets | 325,098 | 414,205 | 68,422 | |||||||
Non-current assets: | ||||||||||
Property and equipment, net | 123,877 | 185,107 | 30,577 | |||||||
Cloud infrastructure construction in progress | — | 5,705 | 942 | |||||||
Intangible assets, net | — | 4,702 | 777 | |||||||
Long term investments | 6,103 | 7,603 | 1,256 | |||||||
Deferred tax assets | 4,602 | 602 | 99 | |||||||
Long term deposits and other non-current assets | 3,676 | 4,458 | 736 | |||||||
Total non-current assets | 138,258 | 208,177 | 34,387 | |||||||
TOTAL ASSETS | 463,356 | 622,382 | 102,809 | |||||||
As of December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB | RMB | US$ | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | 103,261 | 200,483 | 33,117 | |||||||
Accrued employee benefits | 26,441 | 33,448 | 5,525 | |||||||
Accrued expenses and other payables | 48,776 | 71,095 | 11,745 | |||||||
Income tax payable | 15,200 | 5,777 | 954 | |||||||
Liabilities for uncertain tax positions | 4,050 | 6,296 | 1,040 | |||||||
Amounts due to inter-companies(1) | 208,743 | 236,584 | 39,081 | |||||||
Amounts due to a related party (2) | 1,044 | 844 | 139 | |||||||
Deferred government grant | — | 24,360 | 4,024 | |||||||
Total current liabilities | 407,515 | 578,887 | 95,625 | |||||||
Non-current liabilities: | ||||||||||
Deferred government grant | 3,360 | — | — | |||||||
Total non-current liabilities | 3,360 | — | — | |||||||
Total liabilities | 410,875 | 578,887 | 95,625 | |||||||
(1) Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. | ||||||||||
(2) Information with respect to related parties is discussed in Note 19. | ||||||||||
For the Years Ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Net revenues | ||||||||||
-Third party customers | 600,203 | 745,835 | 910,757 | 150,446 | ||||||
-Inter-companies | 2,353 | 12,588 | 146,640 | 24,223 | ||||||
-A related party customer | — | 12,543 | — | — | ||||||
Net profit/ (loss) | 43,723 | 20,406 | (12,761 | ) | (2,108 | ) | ||||
Income from discontinued operations (including gain on disposal of Shanghai JNet (Note 4(b))) | 31,977 | — | — | — | ||||||
Income from discontinued operations relates to the operations of Shanghai JNet that has been classified as discontinued operations upon the disposal of Shanghai JNet and the concurrent termination of the VIE Agreements (Note 4(b)). | ||||||||||
For the Years Ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Net cash provided by operating activities | 94,710 | 51,059 | 97,554 | 16,114 | ||||||
Net cash used in investing activities | (73,873 | (49,933 | ) | (89,657 | ) | (14,810 | ) | |||
Net cash used in financing activities | — | — | — | — |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||
Dec. 31, 2013 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
(a) Basis of presentation | |||
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). | |||
(b) Principles of consolidation | |||
The consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIEs for which the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIEs are eliminated upon consolidation. Results of acquired subsidiaries or VIEs are consolidated from the date on which control is transferred to the Company. | |||
(c) Use of estimates | |||
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets and intangible assets, impairment of long-lived assets and intangible assets, allowance for doubtful debts, accounting for deferred income taxes, accounting for share-based compensation arrangements and accounting for the Company’s post-acquisition settlement consideration and subsequent changes in this estimated forecasted liability amount (Note 4(a)). The valuation of and accounting for the Company’s financial instruments also requires significant estimates and judgments provided by management. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. | |||
(d) Foreign currency | |||
The functional currency of the Company and each of its subsidiaries is the Renminbi (“RMB”), except for ChinaCache US and ChinaCache HK, which are the United States dollar (“US$”) and Hong Kong dollar (“HK$”) respectively, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 (“ASC 830”) “Foreign Currency Matters”. The reporting currency of the Company is also the RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. Exchange gains and losses are included in foreign exchange gains and losses in the consolidated statements of comprehensive income (loss). | |||
Assets and liabilities of ChinaCache US and ChinaCache HK are translated into RMB at fiscal year-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the fiscal year. The resulting translation adjustments are recorded in other comprehensive income/(loss). | |||
(e) Convenience translation | |||
Amounts in United States dollars (‘‘US$’’) are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.0537 on December 31, 2013 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. | |||
(f) Cash and cash equivalents | |||
Cash and cash equivalents consists of cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. | |||
(g) Restricted cash | |||
Restricted cash represents amounts held by a bank as security for the short term loan and, therefore, are not available for the Group’s use. | |||
(h) Accounts receivable and allowance for doubtful accounts | |||
Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off after all collection effort has ceased. | |||
(i) Property and equipment | |||
Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: | |||
Optical Fibers | 20 years | ||
Computer equipment | 3-5 years | ||
Furniture, fixtures and office equipment | 5 years | ||
Motor vehicles | 10 years | ||
Leasehold improvements | Over the shorter of lease term or the estimated useful lives of the assets | ||
Repair and maintenance costs are charged to expense when incurred, whereas the cost of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of comprehensive income (loss). | |||
Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. The Company did not recognize any capitalized interest during the years ended December 31, 2011, 2012 and 2013. | |||
(j) Land use right | |||
The land use right represent the amounts paid and relevant costs incurred for the right to use land in the PRC and are recorded at purchase cost less accumulated amortization. Amortization is provided on a straight-line basis over the terms of the respective land use right agreement. | |||
(k) Intangible assets | |||
Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets with a finite useful life are amortized using the straight-line method over the estimated economic life of the intangible assets as follows: | |||
Purchased software | 5 years | ||
(l) Impairment of long-lived assets | |||
The Company evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. There is no indication of impairment associated with its long-lived assets as of December 31, 2012 and 2013. | |||
(m) Investments | |||
Available-for-sale investments | |||
The Company has classified its investment in certain convertible redeemable preferred shares of certain unlisted companies in the PRC and a mutual fund as available-for-sale in accordance with ASC320-10 “Investments — Debt and Equity Securities”. Such available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income in shareholders’ equity. Realized gains or losses are charged to earnings during the period in which the gain or loss is realized. If the Company determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to its estimated fair value. The new cost basis will not be adjusted for subsequent recoveries in fair value. Determination of whether declines in value are other-than-temporary requires significant judgment. Subsequent increases and decreases in the fair value of available-for-sale securities will be included in other comprehensive income except for an other-than-temporary impairment, which would be charged to current period earnings. Impairment of available-for-sale investment for the years ended December 31, 2011, 2012 and 2013 were nil, nil and RMB1,217,000 (US$201,000), respectively. | |||
Dividend and interest income, including the amortization of the premium and discount arising at acquisition, for all categories of investments in securities are included in earnings. | |||
Investment — Equity method/ Cost | |||
Where consolidation is not appropriate, the Company applies the equity method of accounting that is consistent with ASC 323 “Investments - Equity Method and Joint Ventures” to limited partnerships in which the Company holds either (a) a five percent or greater interest or (b) less than a five percent interest when the Company has more than virtually no influence over the operating or financial policies of the limited partnership. The Company considers certain qualitative factors in assessing whether it has more than virtually no influence for partnership interests of less than five percent. For investments other than those described in (a) and (b) above, the Company applies the cost method of accounting that is consistent with ASC 325 “Investments — Other”. | |||
(n) Fair value of financial instruments | |||
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, restricted cash, accounts receivable, other receivables included in prepaid expenses and other current assets, short term loan, accounts payables, balances with related parties and other payables, approximate their fair values because of the short-term maturity of these instruments. Available-for-sale investments were initially recognized at cost and subsequently remeasured at the end of each reporting period with the adjustment in its fair value recognized in accumulated other comprehensive income. The Company, with the assistance of an independent third party valuation firm, determined the estimated fair value of its available-for-sale investments that are recognized in the consolidated financial statements. | |||
(o) Discontinued Operations | |||
In accordance with ASC 205-20 “Discontinued Operations”, when a component of an entity has been disposed of and the Company will no longer have significant continuing involvement in the operations of the component, the results of its operations should be classified as discontinued operations in the consolidated statement of comprehensive income (loss) for all periods presented. | |||
(p) Revenue recognition | |||
The Company provides a portfolio of content and application delivery total solutions within its one class of services, such as, web page content services; file transfer services; rich media streaming services; guaranteed application delivery; managed internet data services; cloud services; content bridging services; mobile internet solution; and value-added services to its customers that in turn improve the performance, reliability and scalability of their internet services and applications. | |||
Consistent with the criteria of ASC 605, “Revenue Recognition”, the Company recognizes revenue from sales of these services when there is a signed sales agreement with fixed or determinable fees, services have been provided to the customer and collection of the resulting customer’s receivable is reasonably assured. | |||
The Company’s services are provided under the terms of a one-year master service agreement, which will typically accompany a one-year term renewal option with the same terms and conditions. Customers can choose at the outset of the arrangement to either use the Company’s services through a monthly fixed bandwidth or traffic volume usage and fee arrangement or choose a plan based on actual bandwidth or traffic volume used during the month at fixed pre-set rates. The Company recognizes and bills for revenue for excess usage, if any, in the month of its occurrence to the extent a customer’s usage of the services exceeds their pre-set monthly fixed bandwidth usage and fee arrangements. The rates as specified in the master service agreements are fixed for the duration of the contract term and are not subject to adjustment. | |||
The Company may charge its customers an initial set-up fee prior to the commencement of their services. To date these amounts have been insignificant, however, the Company’s policy is to record these initial set-up fees as deferred revenue and recognize them as revenue ratably over the estimated life of the customer arrangement. | |||
Business tax and related surcharges on revenues earned from provision of services to customers is recorded as a deduction from gross revenue to derive net revenue in the same period in which the related revenue is recognized. The business tax and related surcharges expenses for the years ended December 31, 2011, 2012 and 2013 amounted to approximately RMB24,215,000, RMB26,377,000 and RMB23,906,000 (US$3,949,000), respectively. | |||
Effective in September 2012, 6% of value-added tax, or VAT, replaced the original 5% business tax in Beijing as a result of the PRC government’s pilot VAT reform program, which applies to all services provided by Chinacache Beijing and Beijing Jingtian and certain services provided by Beijing Blue IT. | |||
(q) Cost of revenues | |||
Cost of revenue consists primarily of depreciation of the Company’s long-lived assets, amortization of acquired intangible assets, maintenance, purchase of bandwidth and other overhead expenses directly attributable to the provision of Content and Application Delivery services. | |||
Prior to September 2012, ChinaCache Beijing was subject to business tax and other surcharges on certain revenues earned for exclusive business support, technical and consulting services provided to the Company’s VIEs, pursuant to the VIE agreements (Note 1). Since September 2012, all service provided by ChinaCache Beijing is subject to VAT. Such business tax, VAT (to the extent that is non-deductible) and other surcharges are accrued and charged to cost of revenues as the related exclusive business support, technical and consulting services are rendered. | |||
(r) Advertising expenditures | |||
Advertising expenditures are expensed as incurred. Advertising expenditures, included in sales and marketing expenses, amounted to approximately RMB3,159,000, RMB2,196,000 and RMB81,000 (US$13,000), for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
(s) Research and development costs | |||
Research and development costs consist primarily of payroll and related personnel costs for minor routine upgrades and related enhancements to the Company’s services and network. Costs incurred in the development of the Company’s services are expensed as incurred. To date, the amount of costs qualifying for capitalization has been insignificant. | |||
(t) Government Grants | |||
Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grants are determined solely at the discretion of the relevant government authorities and there is no assurance that the Company will continue to receive these government grants in the future. Government grants are recognized when it is probable that the Company will comply with the conditions attached to them, and the grants are received. When the grant relates to an expense item, it is recognized as deferred government grants and released to the consolidated statements of comprehensive income (loss) over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as a reduction of the related operating expense. Where the grant relates to an asset, it is recognized as deferred government grants and released to the consolidated statements of comprehensive income (loss) in equal amounts over the expected useful life of the related asset, when operational, as a reduction of the related depreciation expense. | |||
Government grants received by the Company also consist of unrestricted grants which are received on an unsolicited and unconditional basis to support the growth of the Company and do not relate to the Company’s operating activities. Unrestricted grants are classified as non-operating income and recorded in other income on the consolidated statements of comprehensive income (loss) upon receipt. As of December 31, 2011, 2012 and 2013, the Company received unrestricted grant amounted to nil, RMB1,262,000 and RMB1,031,000 (US$170,000), respectively. | |||
(u) Leases | |||
Leases are classified at the inception date as either a capital lease or an operating lease. The Company did not enter into any leases whereby it is the lessor for any of the periods presented. As the lessee, a lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A lease involving integral equipment is a capital lease only if condition (a) or (b) exists. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. | |||
All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective leases. The Company leases office space and employee accommodation under operating lease agreements. Certain of the lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. The excess of rent expense and rent paid, as the case may be for respective leases, is recorded as deferred rental included in the prepaid expenses and other current assets in the consolidated balance sheets. | |||
(v) Income taxes | |||
The Company follows the liability method in accounting for income taxes in accordance to ASC topic 740 (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. | |||
The Company adopted ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of “interest expense” and “other expenses,” respectively, in the consolidated statements of comprehensive income (loss). | |||
(w) Share-based compensation | |||
Share options and restricted shares award granted to employees are accounted for under ASC 718 Compensation — Stock Compensation. In accordance with ASC 718, the Company determines whether a share option or restricted shares award should be classified and accounted for as a liability award or an equity award. All grants of share options and restricted shares award to employees classified as equity awards are recognized in the financial statements over their requisite service period based on their grant date fair values. All grants of share options to employees classified as liability awards are remeasured at the end of each reporting period with any fair value adjustments recorded to the current period expense. | |||
The Company has elected to recognize compensation expenses using the accelerated method for its share options and restricted share award granted. For restricted share awards granted with performance conditions, the Company commences recognition of the related compensation expense if it is probable the defined performance condition will be met. To the extent that the Company determines that it is probable that a different number of share-based awards will vest depending on the outcome of the performance condition, the cumulative effect of the change in estimate is recognized in the period of change. | |||
ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in the subsequent period if actual forfeitures differ from initial estimates. Forfeiture rate is estimated based on historical and future expectations of employee turnover rates and are adjusted to reflect future changes in circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense was recorded only for those share-based awards that are expected to vest. During the years ended December 31, 2011, 2012 and 2013, the Company estimated that the forfeiture rate for both the management group and the non-management group was zero. To the extent the Company revises this estimate in the future, the share-based payments could be materially impacted in the period of revision, as well as in following periods. | |||
The Company records share-based compensation expense for awards granted to non-employees in exchange for services at fair value in accordance with the provisions of ASC 505-50, “Equity-based Payments to Non-Employees.” For the awards granted to non-employees, the Company will record compensation expenses equal to the fair value of the share options at the measurement date, which is determined to be the earlier of the performance commitment date or the service completion date. | |||
The Company, with the assistance of independent valuation firms, determined the estimated fair values of the share options granted to employees and non-employees using the binomial option pricing model. | |||
(x) Earnings (loss) per share | |||
In accordance with ASC 260, “Earnings per Share,” basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share for continuing operations is calculated by dividing net profit from continuing operations attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Diluted earnings per share for discontinued operations is then calculated by dividing net profit from discontinued operations attributable to ordinary shareholders by the same number of potential ordinary shares determined in the earlier step. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the share options, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted per share if their effects would be anti-dilutive. | |||
(y) Comprehensive income (loss) | |||
Comprehensive income (loss) is defined as the increase (decrease) in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive income (loss) is reported in the consolidated statements of comprehensive income (loss). Accumulated other comprehensive income of the Company includes foreign currency translation adjustments related to ChinaCache US and ChinaCache HK, whose functional currency are US$ and HK$, respectively, and the change in fair value of available-for-sale investments (Note 11) and their corresponding deferred tax impact, if any. | |||
(z) Segment reporting | |||
The Company follows ASC 280, “Segment Reporting.” The Company’s Chief Executive Officer or chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only one reportable segment. The Company operates and manages its business as a single segment through the provision of a single class of global services for accelerating and improving the delivery of content and applications over the Internet. As the Company’s long-lived assets are substantially all located in the PRC and substantially all the Company’s revenues are derived from within the PRC, no geographical segments are presented. | |||
(aa) Employee benefits | |||
The full-time employees of the Company’s PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, unemployment insurance and pension benefits, which are government mandated defined contribution plans. These entities are required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. The total amounts for such employee benefits, which were expensed as incurred, were RMB12,939,000, RMB22,064,000 and RMB41,036,000 (US$6,778,000) for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
(bb) Share Repurchase Program | |||
Pursuant to a Board of Director’s resolution on June 13, 2011, the Company’s management is authorized to repurchase up to US$10 million of the Company’s ADSs (“2011 Share Repurchase Plan”) in the next 12 months. As of December 2011, the Company had completed its 2011 Share Repurchase Plan by repurchasing 1,641,311 ADSs amounting to RMB63,631,000 (US$10,000,000) under the approved plan. | |||
Pursuant to a Board of Directors’ resolution on May 18, 2012, the Company’s management is authorized to repurchase up to US$10 million of the Company’s ADSs (“2012 Share Repurchase Plan”). As of December 31, 2012, the Company had repurchased 319,827 ADSs amounting to RMB9,470,000 (US$1,520,000) under the 2012 Share Repurchase Plan. | |||
The Company accounted for those shares repurchase as Treasury Stock at cost in accordance to ASC Subtopic 505-30 (“ASC 505-30”), Treasury Stock, and is shown separately in the Shareholders’ Equity as the Company has not yet decided on the ultimate disposition of those ADSs acquired. When the Company decides to retire the treasury stock, the difference between the original issuance price and the repurchase price is debited into accumulated deficit. | |||
(cc) Recently adopted accounting pronouncements | |||
In March of 2013, the FASB issued Accounting Standards Update No. 2013-05 (“ASU 2013-05”) “Foreign Currency Matters, Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” The amendments clarify the applicable guidance for the de-recognition of all or a portion of a cumulative translation adjustment when an entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity or when other changes stipulated occur and involve a foreign entity. The amendments are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The Company will adopt ASU 2013-05 beginning January 1, 2014, and does not expect that the adoption to have a material impact on its consolidated financial statements. | |||
In March of 2013, the FASB issued Accounting Standards Update No. 2013-11 (“ASU 2013-11”) “Income Taxes—Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists.” The amendments clarify that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss, similar tax loss, or tax credit carry forward, except as noted in the following sentence. To the extent a net operating loss, similar tax loss, or tax credit carry forward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such a purpose, then under this exception the unrecognized tax benefit is to be presented in the financial statements as a liability and should not be combined with (netted with) the deferred tax asset(s). The assessment of whether a deferred tax asset is “available” is based on the unrecognized tax benefit and deferred tax asset amounts that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company early adopted ASU 2013-11 and, the adoption of ASU 2013-11 does not have a material impact on the consolidated financial statements. | |||
(dd) Comparative information | |||
Certain items in prior years’ consolidated financial statements have been reclassified to conform to the current period’s presentation to facilitate comparison. | |||
CONCENTRATION_OF_RISK
CONCENTRATION OF RISK | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
CONCENTRATION OF RISK | ' | |||||||||
CONCENTRATION OF RISK | ' | |||||||||
3. CONCENTRATION OF RISK | ||||||||||
(a) Credit risk | ||||||||||
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, other receivables included in prepaid expenses and other current assets, available-for-sale investments and amounts due from related parties. As of December 31, 2012 and 2013, RMB137,778,000 and RMB173,048,000 (US$28,585,000), respectively, were deposited with major financial institutions located in the PRC, and RMB56,609,000 and RM117,657,000 (US$19,436,000), respectively, were deposited with in the major financial institutions located in the Hong Kong Special Administration Region, and RMB15,319,000 and RMB47,387,000 (US$7,828,000), respectively held in the major financial institutions in United States of America, and RMB107,416,000 and nil, respectively held in the major financial institutions located in Europe. Management believes that these financial institutions are of high credit quality and continually monitor the credit worthiness of these financial institutions. Historically, deposits in Chinese banks are secure due to the state policy on protecting depositors’ interests. However, China promulgated a new Bankruptcy Law in August 2006 that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the new Bankruptcy Law, a Chinese bank may go into bankruptcy. In addition, since China’s concession to the World Trade Organization, foreign banks have been gradually permitted to operate in China and have been significant competitors against Chinese banks in many aspects, especially since the opening of the Renminbi business to foreign banks in late 2006. Therefore, the risk of bankruptcy of those Chinese banks in which the Company has deposits has increased. In the event of bankruptcy of one of the banks which holds the Company’s deposits, it is unlikely to claim its deposits back in full since it is unlikely to be classified as a secured creditor based on PRC laws. | ||||||||||
(b) Business, supplier, customer, and economic risk | ||||||||||
The Company participates in a relatively young and dynamic industry that is heavily reliant and also susceptible to complementary and/or competitive technological advancements. The Company believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position, results of operations or cash flows: | ||||||||||
(i) Business Risk - Third parties may develop technological or business model innovations that address content delivery requirements in a manner that is, or is perceived to be, equivalent or superior to the Company’s services. If competitors introduce new products or services that compete with, or surpass the quality, price or performance of the Company’s services, the Company may be unable to renew its agreements with existing customers or attract new customers at the prices and levels that allow the Company to generate reasonable rates of return on its investment. | ||||||||||
(ii) Supplier Risk - Changes in key telecommunications resources suppliers and certain strategic relationships with telecom carriers. The Company’s operations are dependent upon communications capacity provided by the third-party telecom carriers and third-party controlled end-user access network. There can be no assurance that the Company are adequately prepared for unexpected increases in bandwidth demands by its customers. The communications capacity the Company has leased may become unavailable for a variety of reasons, such as physical interruption, technical difficulties, contractual disputes, or the financial health of its third-party providers. Any failure of these network providers to provide the capacity the Company requires may result in a reduction in, or interruption of, service to its customers. For the years ended on December 31, 2011, 2012 and 2013, 97%, 94% and 94% of bandwidth resources in term of costs were leased from the two major PRC telecom carriers, China Telecom and China Unicom. | ||||||||||
(iii) Customer Risk - Revenue concentration on certain customers. The success of the Company’s business going forward will rely in part on Company’s ability to continue to obtain and expand business from existing customers while also attracting new customers. Although the Company has a diversified base of customers covering its one class of services, such as, web page content services; file transfer services; rich media streaming service; guaranteed application services; managed internet data services; cloud services; content bridging services; mobile internet solution; and value-added services, the Company does depend on a limited number of customers for a substantial portion of their revenue, and the loss of, or a significant shortfall in demand from, these customers could significantly harm the Company’s results of operations. Details of the revenues for customers accounting for 10% or more of total revenues are as follows: | ||||||||||
Years as of December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Customer A | 98,684 | 82,663 | 112,292 | 18,549 | ||||||
Customer B | * | * | 160,582 | 26,562 | ||||||
Details of the accounts receivables for customers accounting for 10% or more of total accounts receivable are as follows: | ||||||||||
Years as of December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB’000 | RMB’000 | US$’000 | ||||||||
Customer A | 46,324 | 44,987 | 7,431 | |||||||
Customer C | * | 32,571 | 5,380 | |||||||
*not greater than 10% | ||||||||||
(iv) Emerging or unproven business models of customers. Many of the Company’s existing and potential customers are pursuing emerging or unproven business models which, if unsuccessful, could lead to a substantial decline in demand for the Company’s services, and the Company’s growth and prospects may be materially and adversely affected. | ||||||||||
(v) Political, economic and social uncertainties. The Company’s operations could be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. | ||||||||||
(vi) Regulatory restrictions. The applicable PRC laws, rules and regulations currently prohibit foreign ownership of companies that provide content and application delivery services. Accordingly, the Company’s subsidiary, ChinaCache Beijing is currently ineligible to apply for the required licenses for providing content and application delivery services in China. As a result, the Company operates its business in the PRC through its VIEs, which holds the licenses and permits required to provide content and application delivery services in the PRC. The PRC Government may also choose at any time to block access to the Company’s customers’ content which could also materially impact the Company’s ability to generate revenue. | ||||||||||
(c) Currency convertibility risk | ||||||||||
Substantially all of the Company’s businesses are transacted in RMB, which is not freely convertible into foreign currencies. On January 1, 1994, the PRC government abolished the dual rate system and introduced a single rate of exchange as quoted daily by the People’s Bank of China. However, the unification of the exchange rates does not imply the convertibility of RMB into US$ or other foreign currencies. All foreign exchange transactions continue to take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. | ||||||||||
(d) Foreign currency exchange rate risk | ||||||||||
From July 21, 2005, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. The appreciation of the RMB against US$ was approximately 4.6%, 1.0% and 2.8% in the years ended December 31, 2011, 2012 and 2013, respectively. While the international reaction to the appreciation of the RMB has generally been positive, there remains significant international pressure on the PRC Government to adopt an even more flexible currency policy, which could result in a further and potentially more significant appreciation of the RMB against the US$. |
CONSOLIDATION_DECONSOLIDATION_
CONSOLIDATION (DECONSOLIDATION) OF SHANGHAI JNET | 12 Months Ended | |||
Dec. 31, 2013 | ||||
CONSOLIDATION (DECONSOLIDATION) OF SHANGHAI JNET | ' | |||
CONSOLIDATION (DECONSOLIDATION) OF SHANGHAI JNET | ' | |||
4. CONSOLIDATION (DECONSOLIDATION) OF SHANGHAI JNET | ||||
(a) Post-Acquisition Settlement Consideration | ||||
On January 28, 2010, concurrent with the Company’s planned IPO, the Company agreed to provide certain requested settlement amounts pursuant to a supplementary agreement entered into with the original JNet sellers, Mr. Mei Yongkai and Ms. Mei Xiurong (the “sellers”). Historically, in lieu of the Company not paying the cash consideration in accordance with the original installment schedule due to the Company not having sufficient US$ funds nor were they able to remit RMB to the sellers due to the foreign currency restrictions imposed by the PRC government, the Company agreed to allow Shanghai JNet to provide RMB loans to the sellers subsequent to the original acquisition date of January 11, 2008. As of December 31, 2009, the outstanding cash consideration and the loan receivables due from the sellers amounted to approximately RMB59,018,000 and RMB65,590,000, respectively. | ||||
The following key terms and conditions were agreed to on January 28, 2010: | ||||
i) codified that the outstanding balance of loans receivable from the sellers as of December 31, 2009 was an effective full and final settlement for all outstanding consideration payable by the Company for the acquisition of JNet Group concurrent with an amount of RMB6,588,000 being forgiven and that all subsequent cash payments, if and when made by the Company, to the sellers in settlement of the outstanding consideration liability will be immediately remitted back by the sellers to Shanghai JNet in settlement of the loans receivable; | ||||
ii) agreed to pay the sellers an additional RMB6,829,000 (US$1,000,000) in other consideration; | ||||
iii) agreed to pay the sellers 100% of the Shanghai JNet’s audited pre-tax income earned each year from 2010 to 2012 on a quarterly basis; and | ||||
iv) agreed to issue additional ordinary shares of the Company to the sellers to the extent the Company’s qualified public offering price is less than US$1.02952 per ordinary share. | ||||
Further, the supplementary agreement contained no service, performance, or market conditions for allowing the sellers to be eligible for the additional consideration above. | ||||
The terms of the supplementary agreement were negotiated and finalized 24 months subsequent to the acquisition date, after consideration and in settlement of unforeseen events and circumstances unrelated, and arising subsequent to the JNet business acquired. Accordingly, the Company has concluded that the accounting for the supplementary agreement should be separate from that of the business combination. The earn-outs in the supplementary agreement have been accounted for as a liability at its estimated fair value at each reporting date and will continue to be subsequently re-measured at each reporting date through the consolidated statements of comprehensive income (loss) until final settlement. The sum of the estimated fair value of the earn-outs and other consideration, including the excess difference between the loans receivable from the sellers over the outstanding balance of the original purchase consideration payable and the additional charge of RMB6,027,000 (US$901,000) as a result of the issuance of 1,030,215 ordinary shares to the sellers at the initial public offering price of US$0.8688 pursuant to (iv) above, totaled RMB37,858,000 which was expensed during the year ended December 31, 2010. The Company also recorded expense of RMB7,158,000, during the year ended December 31, 2011 which represented the sum of the estimated changes in the fair value of the earn-outs. | ||||
(b) Deconsolidation of Shanghai JNet | ||||
On December 26, 2011, the termination of all VIE agreements entered into between the Company, Shanghai JNet and its nominee shareholders resulted in the deconsolidation and the effective disposal of Shanghai JNet back to the sellers in exchange for non-cash consideration. Concurrent with the termination of all VIE agreements, the following terms were agreed: | ||||
(i) The transfer of Shanghai JNet’s shares from these nominee shareholders back to Mr. Mei Yongkai; | ||||
(ii) The Company agreed to waive the outstanding loan receivable balances of RMB48,654,000 from the sellers; and | ||||
(iii) The sellers agreed to waive the remaining acquisition consideration of US$7,075,000 and the post-acquisition settlement consideration of US$2,803,000. | ||||
The Company terminated all of the VIE agreements between the Company, Shanghai JNet and the nominee shareholders of Shanghai JNet because the costs of maintaining Shanghai JNet’s operations, including the costs of post-acquisition settlement consideration incurred and the efforts expended to integrate Shanghai JNet’s operations and personnel with the Company’s overall operations, outweighed the benefit of Shanghai JNet’s deteriorating percentage contribution of revenue to the Company. | ||||
As a result of the transaction, the Company recognized a gain on the deconsolidation of Shanghai JNet of RMB30,716,000 as summarized below. | ||||
RMB’ 000 | ||||
Disposition of net assets of Shanghai JNet (Note 22) | (31,453 | ) | ||
Waiver of acquisition consideration and post-acquisition settlement consideration (see (iii) above) | 62,169 | |||
Gain on deconsolidation of Shanghai JNet | 30,716 |
ACCOUNTS_RECEIVABLE_NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCOUNTS RECEIVABLE, NET | ' | |||||||
ACCOUNTS RECEIVABLE, NET | ' | |||||||
5. ACCOUNTS RECEIVABLE, NET | ||||||||
Accounts receivable and allowance for doubtful accounts consist of the following: | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Accounts receivable | 255,744 | 318,131 | 52,552 | |||||
Less: allowance for doubtful accounts | (25,545 | ) | (11,894 | ) | (1,965 | ) | ||
230,199 | 306,237 | 50,587 | ||||||
As of December 31, 2012 and 2013, all accounts receivable were due from third party customers. | ||||||||
An analysis of the allowance for doubtful accounts is as follows: | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Balance, beginning of year | 2,809 | 25,545 | 4,220 | |||||
Additions for the current year | 22,768 | 23,804 | 3,932 | |||||
Deductions for the current year | ||||||||
-Recovery | (32 | ) | (103 | ) | (17 | ) | ||
-Written off | — | (37,352 | ) | (6,170 | ) | |||
Balance, end of year | 25,545 | 11,894 | 1,965 |
PREPAID_EXPENSES_AND_OTHER_CUR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ' | |||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ' | |||||||
6. PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||||||||
Prepaid expenses and other current assets consist of the following: | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Prepaid expense for bandwidth and servers (i) | 17,147 | 12,419 | 2,052 | |||||
Prepaid marketing and consulting fee in connection with the Cloud infrastructure | — | 7,500 | 1,239 | |||||
Income tax receivable | — | 4,590 | 758 | |||||
Staff field advances | 1,444 | 2,570 | 425 | |||||
Other deposit and receivables | 12,649 | 23,470 | 3,877 | |||||
31,240 | 50,549 | 8,351 | ||||||
(i) Prepaid expense for bandwidth and servers represents the unamortized portion of prepaid payments made to the Company’s telecom operators and certain technology companies, who provide the Company with access to bandwidth and network servers. |
PROPERTY_AND_EQUIPMENT_NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
PROPERTY AND EQUIPMENT, NET | ' | |||||||||
PROPERTY AND EQUIPMENT, NET | ' | |||||||||
7. PROPERTY AND EQUIPMENT, NET | ||||||||||
Property and equipment, including those held under capital leases, consists of the following: | ||||||||||
December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB’000 | RMB’000 | US$’000 | ||||||||
At cost: | ||||||||||
Optical fibers | 13,100 | 13,100 | 2,164 | |||||||
Computer equipment | 424,808 | 514,059 | 84,918 | |||||||
Furniture and fixtures | 7,538 | 9,185 | 1,517 | |||||||
Leasehold improvements | 15,499 | 19,725 | 3,258 | |||||||
Motor vehicles | 4,206 | 6,295 | 1,040 | |||||||
465,151 | 562,364 | 92,897 | ||||||||
Less: accumulated depreciation | (285,860 | ) | (321,662 | ) | (53,135 | ) | ||||
Less: accumulated impairment | (52 | ) | (52 | ) | (9 | ) | ||||
179,239 | 240,650 | 39,753 | ||||||||
For the years ended December 31, 2011, 2012 and 2013, depreciation expenses (excluding Shanghai JNet) were RMB67,345,000 RMB59,890,000 and RMB59,876,000 (US$9,891,000), respectively, and were included in the following captions: | ||||||||||
For the years ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Cost of revenue | 63,318 | 51,911 | 45,581 | 7,529 | ||||||
Sales and marketing expenses | 855 | 712 | 280 | 46 | ||||||
General and administrative expenses | 1,073 | 1,171 | 5,706 | 943 | ||||||
Research and development expenses | 2,099 | 6,096 | 8,309 | 1,373 | ||||||
67,345 | 59,890 | 59,876 | 9,891 | |||||||
The Company accounted for the leases of certain computer equipment and optical fibers as capital leases as the respective lease contracts included a bargain purchase option. The carrying amounts of the Company’s property and equipment held under capital leases at respective balance sheet dates were as follows: | ||||||||||
December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB’000 | RMB’000 | US$’000 | ||||||||
Optical fibers | 13,100 | 13,100 | 2,164 | |||||||
Computer equipment | 47,243 | — | — | |||||||
60,343 | 13,100 | 2,164 | ||||||||
Less: accumulated depreciation | (39,662 | ) | (3,875 | ) | (640 | ) | ||||
20,681 | 9,225 | 1,524 | ||||||||
Depreciation of property and equipment held under capital leases was RMB8,988,000, RMB8,219,000 and RMB655,000 (US$108,000) for the years ended December 31, 2011, 2012 and 2013, respectively. |
INTANGIBLE_ASSETS
INTANGIBLE ASSETS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INTANGIBLE ASSETS | ' | |||||||
INTANGIBLE ASSETS | ' | |||||||
8. INTANGIBLE ASSETS | ||||||||
The following table presents the Company’s intangible assets as of the respective balance sheet dates: | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Purchased software | — | 3,368 | 556 | |||||
Addition | 3,368 | 3,139 | 519 | |||||
Less: amortization | — | (944 | ) | (156 | ) | |||
3,368 | 5,563 | 919 | ||||||
The estimated annual amortization expense for each of the five succeeding fiscal years is as follow: | ||||||||
Amortization | ||||||||
RMB’000 | US$’000 | |||||||
For the years ending December 31, | ||||||||
2014 | 1,301 | 215 | ||||||
2015 | 1,301 | 215 | ||||||
2016 | 1,301 | 215 | ||||||
2017 | 1,301 | 215 | ||||||
2018 | 359 | 59 |
LAND_USE_RIGHT_CLOUD_INFRASTRU
LAND USE RIGHT / CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
LAND USE RIGHT / CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | ' | |||||||
LAND USE RIGHT / CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | ' | |||||||
9. LAND USE RIGHT / CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Land use right | — | 51,678 | 8,537 | |||||
Less: accumulated amortization | — | (948 | ) | (157 | ) | |||
— | 50,730 | 8,380 | ||||||
The Company’s land use right is related to the payment to acquire a land use right of approximately 39,000 square meters of land in Beijing Shunyi District, on which the Company plans to develop a Cloud infrastructure. | ||||||||
According to the land use right contract, the Company has a 50-year use right over the land, which is used as the basis for amortization. Amortization expense for land use right for the years ended December 31, 2011, 2012 and 2013 was nil, nil and RMB948,000 (US$157,000), respectively. | ||||||||
As of December 31, 2012 and 2013, the Company has capitalized nil and RMB12,236,000 (US$2,021,000) of costs which were directly attributable to the development of the Cloud infrastructure in the “Cloud infrastructure construction in progress” in the consolidated balance sheets. |
LONG_TERM_INVESTMENTS
LONG TERM INVESTMENTS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
LONG TERM INVESTMENTS | ' | |||||||
LONG TERM INVESTMENTS | ' | |||||||
10. LONG TERM INVESTMENTS | ||||||||
Long term investments consisted of the following: | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
PRC Fund | 6,103 | 7,603 | 1,256 | |||||
United States Fund | 9,033 | 13,847 | 2,287 | |||||
15,136 | 21,450 | 3,543 | ||||||
In 2011, the Company entered into agreements with a PRC Fund and a United States Fund and made investments of RMB3,103,000 and RMB6,033,000, respectively, as a Limited Partner. In 2012, the Company made an additional RMB3,000,000 investment to each of the PRC Fund and the United States Fund. In 2013, the Company made an additional RMB1,500,000 (US$247,782) and RMB4,814,000 (US$795,000) to each of the PRC Fund and the United States Fund, respectively. Given that the Company holds less than five percent interest in each fund, the Company has accounted for such investments using the cost method. There were no indicators of impairment noted associated with the investments as of December 31, 2013. |
AVAILABLEFORSALE_INVESTMENTS
AVAILABLE-FOR-SALE INVESTMENTS | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
AVAILABLE-FOR-SALE INVESTMENTS | ' | |||||||
AVAILABLE-FOR-SALE INVESTMENTS | ' | |||||||
11. AVAILABLE-FOR-SALE INVESTMENTS | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Short-term: | ||||||||
Investment in a mutual fund (a) | — | 24,636 | 4,070 | |||||
— | 24,636 | 4,070 | ||||||
Long-term | ||||||||
Investment in a mutual fund (a) | 80,576 | — | — | |||||
Investment in preferred shares of certain unlisted companies (b) | 1,716 | 13,956 | 2,305 | |||||
Less: accumulated impairment (b) | — | (1,716 | ) | (283 | ) | |||
82,292 | 12,240 | 2,022 | ||||||
Total available-for-sale investments | 82,292 | 36,876 | 6,092 | |||||
(a) On April 4, 2011, the Company purchased 9,790.59 units of a mutual fund for RMB97,931,000. The Company has accounted for the investment in the mutual fund as an available-for-sale investment, where such investment will be carried at fair value, with unrealized gains and losses excluded from earnings and reported as a net amount in as other comprehensive income in the consolidated statements of comprehensive income (loss) until realized. | ||||||||
In 2013, the Company disposed 5,583.30 unit (2012: 1,838.04 unit) with a consideration of RMB57,260,000 (US$9,459,000 ) (2012:RMB18,582,000) and reclassified the accumulated unrealized gains recorded in accumulated other comprehensive income of RMB1,413,000 (US$233,000) (2012:RMB224,000) to other (expense)/income in the consolidated statements of comprehensive income (loss) on the date of disposal. The fair value of the remaining investment was RMB24,636,000 (US$4,070,000) as of December 31, 2013 (December 31, 2012:RMB80,576,000), as derived from level one observable inputs, with the change of fair value of RMB93,000 (US$15,000) (2012:RMB1,370,000) recorded in other comprehensive income. | ||||||||
There was no impairment indicators noted associated with this investment as of December 31, 2012 and 2013. | ||||||||
(b) On April 28, 2011, the Company entered into an agreement with an unlisted company in the PRC (“Investee A”) to purchase 970,591 Series A Preferred Shares for RMB1,259,000 (US$200,000). The Company has the right on or after five years from the issuance date to request redemption of all its Series A Preferred Shares holders, at a redemption price equal to 120% of its original issuance price. | ||||||||
The Company has accounted for the investment in the Series A Preferred Shares as an available-for-sale investment where such investment will be carried at fair value, with unrealized gains and losses excluded from earnings and reported as other comprehensive income in the consolidated statements of comprehensive income (loss) until realized. As of December 31, 2012, the fair value of the investment in the Investee A was RMB1,716,000 with the change of fair value of RMB457,000, recorded in other comprehensive income. In 2013, the Company believed that there was a decline in value that was other-than-temporary, and recorded RMB1,716,000 (US$283,000) in “impairment of available-for-sale investment” in the consolidated statements of comprehensive income (loss) including RMB499,000 (US$73,000) reclassified from accumulated other comprehensive income. | ||||||||
On August 14, 2013, the Company entered into an agreement with an unlisted company in Cayman Island (“Investee B”) to purchase 13,971,428 Series A Preferred Shares for RMB12,240,000 (US$2,000,000). The Company has the right on or after five years from the issuance date to request redemption of all its Series A Preferred Shares holders, at a redemption price equal to 120% of its original issuance price. | ||||||||
The Company has accounted for the investment in the Series A Preferred Shares as an available-for-sale investment where such investment will be carried at fair value, with unrealized gains and losses excluded from earnings and reported as other comprehensive income in the consolidated statements of comprehensive income (loss) until realized. As of December 31, 2013, the fair value of the investment in the Investee B was RMB12,240,000 (US$2,022,000) with no change of fair value. There was no impairment indicators noted associated with this investment as of December 31, 2013. |
SHORTTERM_LOAN
SHORT-TERM LOAN | 12 Months Ended |
Dec. 31, 2013 | |
SHORT-TERM LOAN | ' |
SHORT-TERM LOAN | ' |
12. SHORT-TERM LOAN | |
In June, 2013, the Company entered into a short-term loan arrangement with Hong Kong and Shanghai Banking Corporation Limited (Hong Kong) for the working capital of one of its subsidiaries. The commitment of the loan amounts to RMB60 million (US$10 million), with an interest rate of 5.6% per annum and a maturity term of six months. The loan was renewed in December 2013, at an interest rate of 6.72%. The total amount of RMB60 million (US$10 million) fixed deposit from the Company has been pledged to secure the loan in June 2013, which is recorded as restricted cash in the consolidated balance sheets. | |
ACCRUED_EXPENSES_AND_OTHER_PAY
ACCRUED EXPENSES AND OTHER PAYABLES | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCRUED EXPENSES AND OTHER PAYABLES | ' | |||||||
ACCRUED EXPENSES AND OTHER PAYABLES | ' | |||||||
13. ACCRUED EXPENSES AND OTHER PAYABLES | ||||||||
Accrued expenses and other payables consisted of the following: | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Business tax and other tax payables | 16,276 | 11,793 | 1,948 | |||||
Payables for purchase of property and equipment | 13,224 | 39,853 | 6,583 | |||||
Advance from a potential buyer of part of the Cloud infrastructure | — | 75,000 | 12,389 | |||||
Advance from customers | 11,669 | 12,079 | 1,995 | |||||
Other accrued expenses | 16,604 | 18,350 | 3,032 | |||||
Total | 57,773 | 157,075 | 25,947 | |||||
As of December 31, 2013, the Company has received RMB75,000,000 (US$12,389,000) advanced payment from a potential buyer of part of the Cloud infrastructure. The advance is refundable if a final sales agreement is not reached. The final sales agreement will be entered into, pending certain governmental approval. |
DEFERRED_GOVERNMENT_GRANT
DEFERRED GOVERNMENT GRANT | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
DEFERRED GOVERNMENT GRANT | ' | |||||||
DEFERRED GOVERNMENT GRANT | ' | |||||||
14. DEFERRED GOVERNMENT GRANT | ||||||||
Deferred government grant consisted of the following: | ||||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Beginning | — | 3,360 | 555 | |||||
Received | 3,360 | 21,000 | 3,469 | |||||
Recognized as income during the year | — | — | — | |||||
Ending | 3,360 | 24,360 | 4,024 | |||||
Recognize in one year | — | 24,360 | 4,024 | |||||
During the year ended December 31, 2012, the Company received RMB3,360,000 of government grant from the relevant PRC government authority. The government grant received is required to be used in a research and development project pursuant to the government grant agreement and the project term is from October 2012 to October 2014. The grant was recorded as deferred government grant as the Company had not fulfilled the conditions required by the government as of December 31, 2013. | ||||||||
During the year ended December 31, 2013, the Company received RMB21,000,000 (US$3,469,000) of government grant from the relevant PRC government authority. The government grant received is required to be used in a research and development project pursuant to the government grant agreement and the project term is from October 2013 to January 2014. The grant was recorded as deferred government grant as the Company had not fulfilled the conditions required by the government as of December 31, 2013. |
SHAREBASED_COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
SHARE-BASED COMPENSATION | ' | |||||||||
SHARE-BASED COMPENSATION | ' | |||||||||
15. SHARE-BASED COMPENSATION | ||||||||||
In order to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of the Company’s business, the Company adopted a stock option plan in 2007 (the “2007 Plan”). Under the 2007 Plan, the Company may grant options to its employees, directors and consultants to purchase an aggregate of no more than 14,000,000 ordinary shares of the Company, subject to different vesting requirements. The 2007 Plan was approved by the Board of Directors and shareholders of the Company on October 16, 2008. On May 28, 2009, the Company adopted a new stock option plan (the “2008 Plan”) which allows the Company to grant options to its employees, directors and consultants to purchase an aggregate of no more than 8,600,000 ordinary shares of the Company, subject to different vesting requirements. On May 20, 2010, the Company adopted a new stock option plan (the “2010 Plan”) which allows the Company to grant options to its employees, directors and consultants to purchase an aggregate of no more than 9,000,000 ordinary shares of the Company, subject to different vesting requirements. On June 20, 2011, the Company adopted a new stock option plan (the “2011 Plan”) which allows the Company to grant options to its employees, directors and consultants to purchase an aggregate of no more than 22,000,000 ordinary shares of the Company, subject to different vesting requirements. On July 2, 2012, the Company approved amendments to the 2011 plan which provide, in effect, that the maximum aggregate number of ordinary shares that may be issued pursuant to all awards (the “Award Pool”) under the 2011 plan shall be equal to five percent of the total issued and outstanding ordinary shares as of July 2, 2012; provided that, the ordinary shares reserved in the Award Pool shall be increased automatically if and whenever the unissued ordinary shares reserved in the Award Pool accounts for less than one percent of the total then issued and outstanding ordinary shares, as a result of which increase the unused ordinary shares reserved in the Award Pool immediately after each such increase shall equal to five percent of the then issued and outstanding ordinary shares. | ||||||||||
The 2007 Plan, 2008 Plan, 2010 Plan and 2011 Plan (collectively, the “Option Plans”) will be administered by the Compensation Committee as set forth in the Option Plans (the “Plan Administrator”). The board of directors of a committee designated by the board will administer the plan to execute Option Agreements with those persons selected by the Plan Administrator and issue ordinary shares of the Company upon exercise of any options so granted pursuant to the terms of an Option Agreement. | ||||||||||
The 2007 and 2008 Option Plans each contain the same terms and conditions. All options granted under the 2007 and 2008 Option Plans have a term of nine years from the option grant date and have two different vesting schedules: 1) vest 100% on the stated vesting commencement date in the grantee’s option agreement; or 2) vest 50% on the second anniversary of the stated vesting commencement date and 25% on the third and fourth anniversaries of the stated vesting commencement date. All options granted under the 2010 Option Plan have a term of seven to ten years from the option grant date and have three different vesting schedules: 1) vest 100% on the stated vesting commencement date in the grantee’s option agreement; 2) vest 25% on the first, second, third and fourth anniversaries of the stated vesting commencement date; or 3) vest 25% on the first anniversary of the stated vesting commencement date and 6.25% every quarter for each of the second, third and fourth anniversaries of the stated vesting commencement date. All options granted under the 2011 Option Plan have a term of eight to nine from the option grant date and have four different vesting schedules: 1) vest 100% on the stated vesting commencement date in the grantee’s option agreement; or 2) vest 25% on the first, second, third and fourth anniversaries of the stated vesting commencement date; or 3) vest 25% on the first anniversary of the stated vesting commencement date and 6.25% every quarter for each of the second, third and fourth anniversaries of the stated vesting commencement date; or 4) vest one-third on the first, second and third anniversaries of the stated vesting commencement date. | ||||||||||
On February 26, 2011 and August 9, 2011, the Company’s Board of Directors authorized the accelerated vesting of 800,000 share options that were issued under the 2008 Plan to two employees upon their resignation from the Company. Net incremental stock based compensation of RMB1,776,000 was recognized on the date of modification. | ||||||||||
On January 1, 2012, the Company’s Board of Directors approved to modify the exercise price of options granted under the 2010 Plan and 2011 Plan from US$0.41 to US$0.24. The Company recognized an incremental costs of RMB3,121,300 (US$501,000) on the date of modification. The remaining unrecognized incremental compensation cost related to unvested share options will be amortized from the modification date to the end of the remaining vesting period. | ||||||||||
On March 26, 2013, the Company’s Board of Directors authorized the accelerated vesting of 2,758,336 share options that were issued under 2011 Plan to one employee upon her resignation from the Company. The originally measured compensation cost of RMB2,948,000 (US$487,000) was reversed and the fair value of the award on the modification date of RMB1,676,000 (US$277,000) was recognized on the modification date. | ||||||||||
During the years ended December 31, 2011, 2012 and 2013, the Company granted 25,954,666, 2,130,000 and 9,471,008 options, respectively, to a combination of employees, consultants and directors of the Company at exercise prices ranging from US$0.24 to US$0.41. As of December 31, 2013, options to purchase 37,911,574 of ordinary shares were outstanding and options to purchase 3,717,467 ordinary shares were available for future grant under the Option Plans. | ||||||||||
The binomial option pricing model was applied in determining the estimated fair value of the options granted to employees and non-employees. The model requires the input of highly subjective assumptions including the estimated expected stock price volatility, the expected price multiple at which employees are likely to exercise share options. For expected volatilities, the Company has made reference to the historical price volatilities of ordinary shares of several comparable companies in the same industry as the Company. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury Bills yield in effect at the time of grant. | ||||||||||
(a) Options Granted to Employees | ||||||||||
The following table summarized the Company’s employee share option activity under the Option Plans: | ||||||||||
Number of | Weighted | Weighted | Aggregate | |||||||
options | average Exercise | average | intrinsic value | |||||||
price | remaining | |||||||||
contractual term | ||||||||||
(US$) | (Years) | (US$’000) | ||||||||
Outstanding, January 1, 2012 | 40,285,702 | 0.33 | 8.58 | 1,035 | ||||||
Granted | 2,130,000 | 0.27 | ||||||||
Exercised | (2,406,272 | ) | 0.22 | |||||||
Forfeited | (3,494,672 | ) | 0.3 | |||||||
Outstanding, December 31, 2012 | 36,514,758 | 0.22 | 7.7 | 840 | ||||||
Vested and expected to vest at December 31, 2012 | 36,514,758 | 0.22 | 7.7 | 840 | ||||||
Exercisable at December 31, 2012 | 15,410,254 | 0.19 | 7.16 | 840 | ||||||
Granted | 9,471,008 | 0.24 | ||||||||
Exercised | (11,277,280 | ) | 0.2 | |||||||
Forfeited | (2,304,912 | ) | 0.24 | |||||||
Outstanding, December 31, 2013 | 32,403,574 | 0.23 | 6.78 | 10,479 | ||||||
Vested and expected to vest at December 31, 2013 | 32,403,574 | 0.23 | 6.78 | 10,479 | ||||||
Exercisable at December 31, 2013 | 17,824,031 | 0.21 | 7.16 | 6,211 | ||||||
The aggregated intrinsic value of stock options outstanding and exercisable at December 31, 2013 was calculated based on the closing price of the Company’s ordinary shares on December 31, 2013 of US$8.91 per ADS (equivalent to US$0.56 per ordinary share). The total intrinsic value of stock options exercised during the years ended December 31, 2011, 2012 and 2013 was US$3.47 million, US$0.44 million and US$2.56 million, respectively. | ||||||||||
RMB26,956,000, RMB16,088,000 and RMB11,852,000 (US$1,958,000) were recorded as share-based compensation expenses in captions consistent with the payroll cost classification of the grantees, during the years ended December 31, 2011, 2012 and 2013, respectively. As of December 31, 2013, there was RMB 12,818,000 (US$ 2,117,000) of unrecognized share-based compensation cost related to share options issued to employees, which are expected to be recognized following the accelerated method over the remaining vesting periods of different tranches, ranging from 0.25 years to 4 years. | ||||||||||
The Company calculated the estimated fair value of the options granted in 2011, 2012 and 2013 using the binomial option pricing model with the following assumptions: | ||||||||||
June 20, | May 21, | July 8, 2013 | ||||||||
2011 | 2012 | |||||||||
Suboptimal exercise factor | 2.2 | 2.2 | 2.8 | |||||||
Risk-free interest rates | 2.21 | % | 1.73 | % | 2.66 | % | ||||
Expected volatility | 71.2 | % | 67.5 | % | 61.26 | % | ||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | ||||
Weighted average fair value of share option | 0.236 | 0.166 | 0.141 | |||||||
The total fair value of options vested during the years ended December 31, 2011, 2012 and 2013 was RMB36,918,136, RMB2,202,839, and RMB3,458,482 (US$571,301), respectively. | ||||||||||
(b) Restricted Shares Award Granted to Employees | ||||||||||
The Company issued 8,448,992 shares of restricted shares to the employees and directors on July 8, 2013 under 2011 Plan. 60% of the restricted shares shall become vested on each of June 1, 2014, 2015 and 2016, respectively. The remaining 40% of the restricted shares will grade vest on June 1, 2014 and 2005, and shall be subject to the achievement of certain performance targets, with 50% based on fiscal year 2013 revenue and the other 50% based on 2013 EBIDTA. | ||||||||||
The cost of the restricted shares awards is determined using the fair value (determined based on the fair market value of the Company’s ordinary shares on the grant date, or if the grant date is not a trading day then the immediately preceding trading date), net of expected forfeitures. | ||||||||||
The following table summarized the Company’s restricted shares award issued under 2011 Plan: | ||||||||||
Number of | Weighted average grant | |||||||||
ordinary shares | date fair value | |||||||||
(US$) | ||||||||||
Outstanding, January 1, 2013 | — | |||||||||
Granted | 8,448,992 | 0.24 | ||||||||
Vested | — | |||||||||
Forfeited | (1,689,798 | ) | 0.24 | |||||||
Outstanding, December 31, 2013 | 6,759,194 | 0.24 | ||||||||
Vested and expected to vest at December 31, 2013 | 6,759,194 | 0.24 | ||||||||
(c) Share options issued to non-employees | ||||||||||
The Company granted 1,100,000 options to non-employees on June 20, 2011, which were immediately vested upon grant, with the exercise price of each option at US$0.41. The weighted average exercise price of each option was US$0.16. As of December 31, 2012, there were 3,028,000 options outstanding and exercisable. | ||||||||||
The Company records share-based compensation expenses on the grant date equal to the estimated fair-value of the share options at the measurement date. The estimated fair-value of the options granted to non-employees in 2011 at grant date was determined to be RMB1,615,000 which was recorded in sales and marketing expenses and general and administrative expenses. | ||||||||||
The aggregated intrinsic value of share options outstanding and exercisable at December 31, 2013 was calculated based on the closing price of the Company’s ordinary shares. On December 31, 2013 of US$8.91 per ADS (equivalent to US$0.56 per ordinary shares). As of December 31, 2013, the Company has options issued to non-employees outstanding to purchase an aggregate of 3,028,000 shares with an exercise price below the closing price of the Company’s ordinary shares on December 31, 2013, resulting in an aggregate intrinsic value of RMB 7,487,000 (US$1,237,000). | ||||||||||
A total compensation expense relating to all options and restricted shares award recognized for the years ended December 31, 2011, 2012 and 2013 is as follows: | ||||||||||
2011 | 2012 | 2013 | ||||||||
(RMB)’000 | (RMB)’000 | (RMB)’000 | (US$)’000 | |||||||
Cost of revenues | 4,047 | 2,896 | 1,665 | 275 | ||||||
Sales and marketing expenses | 9,669 | 6,917 | 3,853 | 636 | ||||||
General and administration expenses | 8,968 | 3,219 | 3,833 | 633 | ||||||
Research and development expenses | 4,272 | 3,056 | 2,501 | 413 | ||||||
26,956 | 16,088 | 11,852 | 1,957 |
ACCUMULATED_OTHER_COMPREHENSIV
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ' | |||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ' | |||||||
16. ACCUMULATED OTHER COMPREHENSIVE INCOME | ||||||||
The movement of accumulated other comprehensive income is as follows: | ||||||||
Foreign currency | Unrealized holding | Total | ||||||
translation | gain on available-for- | |||||||
sale Investments | ||||||||
RMB’000 | RMB’000 | RMB’000 | ||||||
Balance as of December 31, 2012 | 1,770 | 1,453 | 3,223 | |||||
Other comprehensive income before reclassification | (1,975 | ) | 1,821 | (154 | ) | |||
Amounts reclassified from accumulated other comprehensive income | — | (1,912 | ) | (1,912 | ) | |||
Balance as of December 31, 2013 | (205 | ) | 1,362 | 1,157 | ||||
Balance as of December 31, 2013, in US$ | (34 | ) | 227 | 193 |
MAINLAND_CHINA_EMPLOYEE_CONTRI
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2013 | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | ' |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | ' |
17. MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | |
As stipulated by the regulations of the PRC, full-time employees of the Company in the PRC participate in a government-mandated multiemployer defined contribution plan organized by municipal and provincial governments. Under the plan, certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. The Company is required to make contributions to the plan based on certain percentages of employees’ salaries. The total expenses for the plan were RMB12,939,000, RMB22,064,000 and RMB41,036,000 (US$6,778,000), for the years ended December 31, 2011, 2012 and 2013, respectively. | |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
INCOME TAXES | ' | |||||||||
INCOME TAXES | ' | |||||||||
18. INCOME TAXES | ||||||||||
Enterprise income tax | ||||||||||
Cayman Islands | ||||||||||
The Company is a tax exempt company incorporated in the Cayman Islands and conducts substantially all of its business through its subsidiaries and VIEs. | ||||||||||
United States of America | ||||||||||
ChinaCache North America, Inc. was registered in California, United States of America in 2007. The entity is subject to both California State Income Tax (8.84%) and Federal Income Tax (graduated income tax rate up to 35%) on its taxable income under the current laws of the state of California and United States of America. | ||||||||||
Hong Kong | ||||||||||
ChinaCache Networks (Hong Kong) Limited, the Company’s wholly owned subsidiary incorporated in Hong Kong, is subject to Hong Kong corporate income tax at a rate of 16.5% on the estimated assessable profits arising in Hong Kong. | ||||||||||
The PRC | ||||||||||
The Company’s subsidiaries and the VIEs that are each incorporated in the PRC are subject to Corporate Income Tax (“CIT”) on the taxable income as reported in their respective statutory financial statements adjusted in accordance with the new PRC Enterprise Income Tax Laws (“PRC Income Tax Laws”) effective from January 1, 2008. Pursuant to the PRC Income Tax Laws, the Company’s PRC subsidiaries and the VIEs are subject to a CIT statutory rate of 25%. | ||||||||||
Under the PRC Income Tax Laws, an enterprise which qualifies as a High and New Technology Enterprise (“the HNTE”) is entitled to a preferential tax rate of 15%. The HNTE status is valid for three years and qualifying entities can apply to renew for an additional three years provided their business operations continue to qualify for the HNTE status. Chinacache Beijing has been recognized as a HNTE in 2010 and through an administrative renewal process in 2013, Chinacache Beijing is eligible for a preferential tax rate of 15% effective from 2010 to 2015 if it continues to qualify on an annual basis. | ||||||||||
Beijing Blue IT, had previously been entitled to a lower 15% income tax rate from 2008 through 2010, due to its qualification for the HNTE status in December 2008. In January 2011, Beijing Blue IT lost its status because of not making a timely renewal of such qualification. In 2013, Beijing Blue IT was recognized as a HNTE again and is eligible for a preferential tax rate of 15% effective from 2012 to 2014 and thereafter for an additional three years through an administrative renewal process if it continues to qualify on an annual basis. | ||||||||||
In May 2013, Beijing Blue IT was certified as a Key Software Enterprise and was therefore entitled to a preferential tax rate of 10% for 2011 and 2012. The Company recorded an income tax refund in connection with the over-paid provisional tax for year 2011 and 2012 in the year ended December 31, 2013, during which the certificate was granted. Beijing Blue IT has applied for Key Software Enterprise status for 2013 and 2014 and received official approval as Key Software Enterprise in December 2013, and therefore is eligible for a preferential tax rate of 10% for 2013 and 2014. | ||||||||||
In accordance with the PRC Income Tax Laws, enterprises established under the laws of foreign countries or regions and whose “place of effective management” is located within the PRC are considered PRC tax resident enterprises and subject to PRC income tax at the rate of 25% on worldwide income. The definition of “place of effective management” refers to an establishment that exercises, in substance, overall management and control over the production and business, personnel, accounting, properties, etc. of an enterprise. As of December 31, 2013, no applicable detailed interpretation or guidance has been issued to define “place of effective management”. Furthermore, as of December 31, 2013, the administrative practice associated with interpreting and applying the concept of “place of effective management” is unclear. | ||||||||||
Based on the assessment of facts and circumstances available at December 31, 2013, management believes none of its non-PRC entities are more likely than not PRC tax resident enterprises. It is possible the assessment of tax residency status may change in the next twelve months, pending announcement of new PRC tax rules in the future. The Company will continue to monitor its tax status. | ||||||||||
Loss from continuing operations before income tax expense consists of: | ||||||||||
For the years ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Non-PRC | 1,236 | 888 | (6,777 | ) | (1,120 | ) | ||||
PRC | (1,605 | ) | (11,586 | ) | (26,157 | ) | (4,320 | ) | ||
(369 | ) | (10,698 | ) | (32,934 | ) | (5,440 | ) | |||
The income tax expense comprises: | ||||||||||
For the years ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Current | 13,188 | 17,490 | (11,809 | ) | (1,951 | ) | ||||
Deferred | (2,043 | ) | (11,197 | ) | 13,104 | 2,165 | ||||
11,145 | 6,293 | 1,295 | 214 | |||||||
The reconciliation of tax computed by applying the statutory income tax rate of 25% applicable to the PRC operations to income tax expense for the years ended December 31, 2011, 2012 and 2013, is as follows: | ||||||||||
For the years ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Loss from continuing operations before income tax expense | (369 | ) | (10,698 | ) | (32,934 | ) | (5,440 | ) | ||
Income tax computed at PRC statutory tax rate of 25% | (93 | ) | (2,674 | ) | (8,233 | ) | (1,360 | ) | ||
Preferential tax rates | (948 | ) | 83 | (50 | ) | (8 | ) | |||
International rate differences | 7,327 | 4,376 | 4,459 | 737 | ||||||
Additional 50% tax deduction for qualified research and development expenses | (2,660 | ) | (4,915 | ) | (7,227 | ) | (1,194 | ) | ||
Non-deductible expenses | 11,304 | 10,454 | 22,164 | 3,661 | ||||||
Other permanent difference | — | (6,626 | ) | — | — | |||||
Effect of changes in tax rates on deferred taxes | (1,586 | ) | 3,779 | 3,947 | 652 | |||||
Changes in unrecognized tax benefits | (480 | ) | — | — | — | |||||
Changes in the valuation allowance | (1,719 | ) | 276 | (2,123 | ) | (351 | ) | |||
Effect of changes in tax rates on prior year tax | — | — | (11,642 | ) | (1,923 | ) | ||||
Deferred tax adjustment | — | 1,540 | — | — | ||||||
Income tax expense | 11,145 | 6,293 | 1,295 | 214 | ||||||
Deferred tax assets and liabilities reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax assets and liabilities are as follows: | ||||||||||
For the years ended December 31, | ||||||||||
2012 | 2013 | |||||||||
(RMB’000) | (RMB’000) | (US$’000) | ||||||||
Deferred tax assets: | ||||||||||
Current: | ||||||||||
- Allowance for doubtful accounts | 6,096 | 1,266 | 209 | |||||||
- Deferred Revenue | 840 | 2,436 | 402 | |||||||
- Accruals | 6,690 | 3,394 | 561 | |||||||
Less: valuation allowance | — | — | — | |||||||
Net current deferred tax assets | 13,626 | 7,096 | 1,172 | |||||||
Non-current: | ||||||||||
- Tax losses | 6,481 | 394 | 65 | |||||||
- Property and equipment | 2,202 | 1,719 | 284 | |||||||
Less: valuation allowance | (2,517 | ) | (394 | ) | (65 | ) | ||||
Net non-current deferred tax assets | 6,166 | 1,719 | 284 | |||||||
Total Deferred tax assets | 19,792 | 8,815 | 1,456 | |||||||
Deferred tax liabilities: | ||||||||||
Non-current: | ||||||||||
- Property and equipment | — | 2,127 | 351 | |||||||
Net non-current deferred tax liabilities | — | 2,127 | 351 | |||||||
Total Deferred tax liabilities | — | 2,127 | 351 | |||||||
Valuation allowances have been provided for deferred tax assets where, based on all available evidence, it was determined by management that more likely than not to be realized in future years. | ||||||||||
As of December 31, 2013, the Company has net operating tax losses carried forward from its PRC subsidiaries, as per filed tax returns, of RMB45,092,000 (US$7,449,000), which will expire between 2014 and 2018. | ||||||||||
As of December 31, 2013, the Company intends to permanently reinvest the undistributed earnings from its foreign subsidiaries to fund future operations. The amount of unrecognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries is not determined because such a determination is not practicable. | ||||||||||
Unrecognized Tax Benefits | ||||||||||
As of December 31, 2012 and 2013, the Company recorded an unrecognized tax benefit of RMB21,563,000 and RMB24,301,000 (US$4,014,000), respectively, of which RMB9,777,000 and RMB12,761,000 (US$2,108,000), respectively, are presented on a net basis against the deferred tax assets related to tax loss carry forwards on the consolidated balance sheets. The unrecognized tax benefit is mainly related to under-reported income and transfer pricing for certain subsidiaries and VIEs. The amount of unrecognized tax benefits will change in the next 12 months, pending clarification of current tax law or audit by the tax authorities, however, an estimate of the range of the possible change cannot be made at this time. As of December 31, 2012 and 2013, all of the unrecognized tax benefits, if ultimately recognized, will impact the effective tax rate. The Company recorded penalty of RMB2,797,000 and RMB-123,000 (US$-20,000) and interest expense of RMB1,304,000 and RMB1,657,000 (US$274,000) for the years ended December 31, 2012 and 2013, respectively. | ||||||||||
As of December 31, 2013, the Company’s tax years ended December 31, 2008 through 2013 for the PRC subsidiaries remain open for statutory examination by the PRC tax authorities. | ||||||||||
A roll-forward of accrued unrecognized tax benefits is as follows: | ||||||||||
December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB’000 | RMB’000 | US$’000 | ||||||||
Balance–beginning | 23,850 | 21,563 | 3,562 | |||||||
Increase based on tax positions related to the current year | 3,169 | 16,694 | 2,757 | |||||||
Decrease based on tax positions related to the current year | (5,456 | ) | (13,956 | ) | (2,305 | ) | ||||
Balance–ending | 21,563 | 24,301 | 4,014 |
RELATED_PARTY_BALANCES_AND_TRA
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ' | |||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ' | |||||||||
19. RELATED PARTY BALANCES AND TRANSACTIONS | ||||||||||
The principal related parties with which the Company had transactions during the periods presented are as follows: | ||||||||||
Name of Related Parties | Relationship with the Company | |||||||||
Mr. Wang Song | The Co-Founder and Director of the Company | |||||||||
Ms. Kou Xiaohong | The Co-Founder and Director of the Company | |||||||||
Blue I.T. Technologies Limited (“Blue IT”) | A company 100% owned by Ms. Kou Xiaohong | |||||||||
Harvest Century International Ltd. (“HCI”) | A company 100% owned by Ms. Kou Xiaohong | |||||||||
Xuntong Tianxia Limited (“Xuntong”) | A company under the significant influence of a senior management of the Company | |||||||||
Jiuzhou Changxiang Technologies (Beijing) Limited (“Jiuzhou Changxiang”) | A company under the significant influence of a senior management of the Company | |||||||||
The Company had the following related party balances as of December 31, 2012 and 2013: | ||||||||||
Xuntong | Jiuzhou | Ms. Kou | Total | |||||||
Changxiang | Xiaohong | |||||||||
Balance as of January 1, 2012 | — | — | (18 | ) | (18 | ) | ||||
Receivables from Xuntong for services provided | 13,000 | — | — | 13,000 | ||||||
Cash received from Xuntong | (4,360 | ) | — | — | (4,360 | ) | ||||
Service fee charged by Jiuzhou Changxiang | — | (4,139 | ) | — | (4,139 | ) | ||||
Service fee paid to Jiuzhou Changxiang | — | 3,095 | — | 3,095 | ||||||
Balance as of December 31, 2012 | 8,640 | (1,044 | ) | (18 | ) | 7,578 | ||||
Cash received from Xuntong | (8,499 | ) | — | — | (8,499 | ) | ||||
Service fee charged by Jiuzhou Changxiang | — | (1,614 | ) | — | (1,614 | ) | ||||
Service fee paid to Jiuzhou Changxiang | — | 1,814 | — | 1,814 | ||||||
Balance as of December 31, 2013 | 141 | (844 | ) | (18 | ) | (721 | ) | |||
Balance as of December 31, 2013 (US$’000) | 23 | (139 | ) | (3 | ) | (119 | ) |
REPURCHASE_OF_ORDINARY_SHARES
REPURCHASE OF ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2013 | |
REPURCHASE OF ORDINARY SHARES | ' |
REPURCHASE OF ORDINARY SHARES | ' |
20. REPURCHASE OF ORDINARY SHARES | |
During the year ended December 31, 2011, the Company repurchased 1,641,311 ADSs amounting to RMB 63,631,000 under the 2011 Share Repurchase Plan. During the year ended December 31, 2012, the Company repurchased 319,827 ADSs amounting to RMB 9,470,000 (US$1,520,000) under the 2012 Share Repurchase Plan. The Company did not repurchase any ADSs in 2013. |
RESTRICTED_NET_ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2013 | |
RESTRICTED NET ASSETS | ' |
RESTRICTED NET ASSETS | ' |
21. RESTRICTED NET ASSETS | |
The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries. | |
In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. ChinaCache Beijing was established as a foreign-invested enterprise and, therefore, is subject to the above mandated restrictions on distributable profits. | |
As a result of these PRC laws and regulations subject to the limit discussed above that require annual appropriations of 10% of after-tax income to be set aside, prior to payment of dividends as general reserve fund, the Company’s PRC subsidiaries and consolidated VIEs are restricted in their ability to transfer a portion of their net assets to the Company in the form of dividend payments, loans or advances. As of December 31, 2012 and 2013, the Company had appointed RMB1,326,000 and RMB1,326,000 (US$219,000), respectively in its statutory reserves. | |
Foreign exchange and other regulations in the PRC may further restrict the Company’s VIEs from transferring funds to the Company in the form of dividends, loans and advances. Amounts restricted include paid-in capital and statutory reserves of the Company’s PRC Subsidiaries and the equity of VIEs, as determined pursuant to PRC generally accepted accounting principles, totaling an aggregate of RMB287,607,000 (US$47,509,000) as of December 31, 2013. |
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended | |||
Dec. 31, 2013 | ||||
DISCONTINUED OPERATIONS | ' | |||
DISCONTINUED OPERATIONS | ' | |||
22. DISCONTINUED OPERATIONS | ||||
On December 26, 2011, the termination of all VIE agreements entered into between the Company, Shanghai JNet and its nominee shareholders led to the deconsolidation and an “effective” disposal of Shanghai JNet back to the sellers in exchange for nil consideration (Note 4(b)). Accordingly, pursuant to ASC 205-20 “Discontinued Operations,” the financial results of Shanghai JNet have been accounted for as a discontinued operation whereby the results of operations of Shanghai JNet have been eliminated from the results of continuing operations and reported in discontinued operations for all periods presented. | ||||
The breakdown of assets and liabilities attributed to discontinued operations as of December 26, 2011 (the date of sale), are as follows: | ||||
December 26, | ||||
2011 | ||||
RMB’ 000 | ||||
Current assets | 63,182 | |||
Property and equipment, net | 5 | |||
Intangible assets | 19 | |||
Goodwill | 16,989 | |||
Total assets | 80,195 | |||
Current liabilities | (48,737 | ) | ||
Deferred tax liabilities | (5 | ) | ||
Total liabilities derecognized | (48,742 | ) | ||
Total net assets (Note 4(b)) | 31,453 |
EARNINGS_LOSS_PER_SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
EARNINGS (LOSS) PER SHARE | ' | |||||||||
EARNINGS (LOSS) PER SHARE | ' | |||||||||
23. EARNINGS (LOSS) PER SHARE | ||||||||||
Basic and diluted earnings (loss) per share for each of the periods presented is calculated as follows: | ||||||||||
For the Year Ended | ||||||||||
December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
(RMB’000) | (RMB’000) | (RMB’000) | (US$’000) | |||||||
Numerator: | ||||||||||
Net loss from continuing operations | (11,514 | ) | (16,991 | ) | (34,229 | ) | (5,654 | ) | ||
Income from discontinued operations | 31,977 | — | — | — | ||||||
Net income (loss) attributable to ordinary shareholders: | 20,463 | (16,991 | ) | (34,229 | ) | (5,654 | ) | |||
Denominator: | ||||||||||
Number of shares outstanding, opening | 385,843,484 | 364,813,932 | 362,102,972 | 362,102,972 | ||||||
Weighted average number of shares issued | 3,063,940 | 136,676 | 813,568 | 813,568 | ||||||
Weighted average number of shares repurchased | (6,922,907 | ) | (1,169,733 | ) | — | — | ||||
Weighted-average number of shares outstanding – Basic | 381,984,517 | 363,780,875 | 362,916,540 | 362,916,540 | ||||||
Weighted-average number of shares outstanding – Diluted | 381,984,517 | 363,780,875 | 362,916,540 | 362,916,540 | ||||||
Earnings (loss) per share-Basic | ||||||||||
- Net loss from continuing operations | (0.03 | ) | (0.05 | ) | (0.09 | ) | (0.01 | ) | ||
- Income from discontinued operations: | 0.08 | — | — | — | ||||||
0.05 | (0.05 | ) | (0.09 | ) | (0.01 | ) | ||||
Earnings (loss) per share-Diluted | ||||||||||
- Net loss from continuing operations | (0.03 | ) | (0.05 | ) | (0.09 | ) | (0.01 | ) | ||
-Income from discontinued operations: | 0.08 | — | — | — | ||||||
0.05 | (0.05 | ) | (0.09 | ) | (0.01 | ) | ||||
The effects of share options have been excluded from the computation of diluted loss per share for the years ended December 31, 2011, 2012 and 2013 as their effects would be anti-dilutive. | ||||||||||
During 2011, the Company issued 20,000,000 ordinary shares to its share depositary bank which will be used to settle stock option awards upon their exercise. No consideration was received by the Company for this issuance of ordinary shares. These ordinary shares are legally issued and outstanding but are treated as escrowed shares for accounting purposes and therefore, have been excluded from the computation of earnings per share. Any ordinary shares not used in the settlement of stock option awards will be returned to the Company. As of December 31, 2013, 1,084,224 ordinary shares have not been used in the settlement of stock option awards. |
FAIR_VALUE_MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended | |||
Dec. 31, 2013 | ||||
FAIR VALUE MEASUREMENT | ' | |||
FAIR VALUE MEASUREMENT | ' | |||
24. FAIR VALUE MEASUREMENT | ||||
The Company applies ASC topic 820, “Fair Value Measurements and Disclosures”. ASC 820 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 requires disclosures to be provided on fair value measurement. | ||||
ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | ||||
Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||||
Level 2 – Include other inputs that are directly or indirectly observable in the marketplace. | ||||
Level 3 – Unobservable inputs which are supported by little or no market activity. | ||||
ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. | ||||
In accordance with ASC 820, the available-for-sale investment of the mutual fund is classified within Level 1 as the Company measures the fair value using quoted trading prices that are published on a regular basis. The available-for-sale investment in preferred shares of certain unlisted PRC companies is classified within Level 3 as the Company measures the fair value with reference to the fair value of the latest transaction which occurred close to year end. The post-acquisition settlement consideration contingency is classified within Level 3. This estimated liability was derived through application of the income approach which included the estimation of Shanghai JNet’s following three years of pre-tax income, based on actual historical operating results coupled with management’s best estimate of future performance and certain market assumptions. The Company applied a discount rate of approximately 17% as at December 31, 2010 which was determined through the assessment of the Company-specific and industry-specific risks. | ||||
The following table presents a reconciliation of the financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3): | ||||
Investment in the Investee A | ||||
RMB’000 | ||||
Fair value at January 1, 2012 | — | |||
Investment during 2012 | 1,259 | |||
Changes in fair value | 457 | |||
Transfers in and/or out of Level 3 | — | |||
Fair value at December 31, 2012 | 1,716 | |||
Changes in fair value* | (1,716 | ) | ||
Transfers in and/or out of Level 3 | ||||
Fair value at December 31, 2013 | — | |||
Fair value at December 31, 2013 (US$’000) | — | |||
* The Company has written off the investment in Investee A, given the decline in value is other-than-temporary. | ||||
Investment in the Investee B | ||||
RMB’000 | ||||
Fair value at January 1, 2013 | — | |||
Investment during 2013 | 12,240 | |||
Changes in fair value | — | |||
Transfers in and/or out of Level 3 | — | |||
Fair value at December 31, 2013 | 12,240 | |||
Fair value at December 31, 2013 (US$’000) | 2,022 | |||
The Company’s valuation techniques used to measure the fair value were derived from management’s assumptions of estimations. Changes in the fair value of the available-for-sale investment in preferred shares of certain unlisted PRC companies will be recorded in other comprehensive income. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
COMMITMENTS AND CONTINGENCIES | ' | |||||
COMMITMENTS AND CONTINGENCIES | ' | |||||
25. COMMITMENTS AND CONTINGENCIES | ||||||
(a) Operating Leases | ||||||
The Company leases facilities in the PRC under non-cancelable operating leases expiring on different dates. Total rental expense under all operating leases was RMB5,626,000, RMB15,621,000 and RMB19,806,000 (US$3,272,000) for the years ended December 31, 2011, 2012 and 2013, respectively. | ||||||
As of December 31, 2013, the Company had future minimum lease payments under non-cancelable operating leases with initial terms of one-year or more in relation to office premises consist of the following: | ||||||
December 31, 2013 | ||||||
RMB’000 | US$’000 | |||||
2014 | 19,342 | 3,195 | ||||
2015 | 18,089 | 2,988 | ||||
2016 | 16,497 | 2,725 | ||||
2017 | 6,703 | 1,108 | ||||
2018 | — | — | ||||
60,631 | 10,016 | |||||
(b) Purchase Commitments | ||||||
As of December 31, 2013, the Company had outstanding purchase commitments in relation to bandwidth of RMB181,245,000 (US$29,940,000). |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2013 | |
SUBSEQUENT EVENTS | ' |
SUBSEQUENT EVENTS | ' |
26. SUBSEQUENT EVENTS | |
1) On February 19, 2014, the Company’s subsidiary, Metasequoia entered into a Convertible Loan Agreement with NetCloud International Holding Limited (“NetCloud”), an exempted company incorporated under the Laws of Cayman Islands, pursuant to which Metasequoia will provide an aggregate of USD500,000 loan to NetCloud, at an interest rate by reference to the US prime rate plus 2%. The term of the loan is twenty-four months, and the loan will be convertible into the Series A Preferred Shares or ordinary shares of NetCloud, at a pre-money valuation of no less than USD2,500,000. | |
2) On February 28, 2014, the Company signed a definitive securities purchase agreement with certain Institutional Investors (the “Institutional Investors”), pursuant to which the Institutional Investors will make an aggregate investment of US$55 million in the Company by subscribing for 53,855,569 newly issued ordinary shares of the Company, which are represented by 3,365,973 ADSs. The purchase price is US$16.34 per ADS, or US$1.02125 per ordinary share. The transaction was closed on March 5, 2014. The Company also agrees to give the Institutional Investors the preemptive rights to subscribe for the new shares that may be issued by the Company, in proportion to their shareholdings and certain registration rights. | |
Concurrently with the signing of the securities purchase agreement, the Company has signed definitive share repurchase agreements with certain existing shareholders, pursuant to which the Company agrees to repurchase a total number of 28,960,922 ordinary shares of the Company with the same price as the price Institutional Investors pay to subscribe the new shares. The Company will use the proceeds from the transaction for capital expenditures and to pay for the repurchased shares. | |
CONDENSED_FINANCIAL_INFORMATIO
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | ' | |||||||||||
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | ' | |||||||||||
27. CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | ||||||||||||
As of December 31, | ||||||||||||
Note | 2012 | 2013 | ||||||||||
RMB | RMB | US$ | ||||||||||
ASSETS: | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 164,024 | 117,626 | 19,431 | |||||||||
Restricted cash | 12 | — | 60,000 | 9,911 | ||||||||
Prepaid expenses and other current assets | 2,673 | 9,477 | 1,568 | |||||||||
Available-for-sale investments | 11 | — | 24,636 | 4,070 | ||||||||
Total current assets | 166,697 | 211,739 | 34,980 | |||||||||
Non-current assets: | ||||||||||||
Property and equipment, net | 11,466 | 8,359 | 1,381 | |||||||||
Long term investments | 10 | 9,033 | 13,847 | 2,287 | ||||||||
Available-for-sale investments | 11 | 82,292 | — | — | ||||||||
Investments in subsidiaries | 393,371 | 423,804 | 70,008 | |||||||||
Total non-current assets | 496,162 | 446,010 | 73,676 | |||||||||
TOTAL ASSETS | 662,859 | 657,749 | 108,656 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||||||||||||
Current liabilities: | ||||||||||||
Accrued expenses and other payables | 970 | 4,616 | 763 | |||||||||
Total current liabilities | 970 | 4,616 | 763 | |||||||||
Total liabilities | 970 | 4,616 | 763 | |||||||||
As of December 31, | ||||||||||||
Note | 2012 | 2013 | ||||||||||
RMB | RMB | US$ | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: (CONTINUED) | ||||||||||||
Shareholders’ equity: | ||||||||||||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 374,464,476 and 374,464,476 shares issued and outstanding as of December 31, 2012 and 2013, respectively) | 275 | 282 | 47 | |||||||||
Additional paid-in capital | 1,220,198 | 1,247,730 | 206,110 | |||||||||
Treasury stock | (73,101 | ) | (73,101 | ) | (12,075 | ) | ||||||
Statutory reserves | 1,326 | 1,326 | 219 | |||||||||
Accumulated deficit | (490,032 | ) | (524,261 | ) | (86,601 | ) | ||||||
Accumulated other comprehensive income | 16 | 3,223 | 1,157 | 193 | ||||||||
Total shareholders’ equity | 661,889 | 653,133 | 107,893 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 662,859 | 657,749 | 108,656 | |||||||||
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | ||||||||||||
For the years ended December 31, | ||||||||||||
Note | 2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | US$ | |||||||||
General and administrative expenses | (13,555 | ) | (9,210 | ) | (14,072 | ) | (2,325 | ) | ||||
Impairment of an available-for-sale investment | 11(b) | — | — | (1,217 | ) | (201 | ) | |||||
Post-acquisition settlement consideration | 4(a) | (7,158 | ) | — | — | — | ||||||
Operating loss | (20,713 | ) | (9,210 | ) | (15,289 | ) | (2,526 | ) | ||||
Interest income | 47 | 657 | 1,075 | 178 | ||||||||
Other income | — | 680 | 6 | 1 | ||||||||
Foreign exchange loss | (6,967 | ) | (2,437 | ) | (6,608 | ) | (1,092 | ) | ||||
Equity in income of subsidiaries | 16,119 | (6,681 | ) | (13,413 | ) | (2,215 | ) | |||||
Loss from continuing operations before income taxes | (11,514 | ) | (16,991 | ) | (34,229 | ) | (5,654 | ) | ||||
Net loss from continuing operations | (11,514 | ) | (16,991 | ) | (34,229 | ) | (5,654 | ) | ||||
Income from discontinued operations | 22 | 31,977 | — | — | — | |||||||
Net income/ (loss) | 20,463 | (16,991 | ) | (34,229 | ) | (5,654 | ) | |||||
Foreign currency translation | 773 | 29 | (1,975 | ) | (326 | ) | ||||||
Unrealized gain from available-for-sale investments | 90 | 1,594 | 1,821 | 301 | ||||||||
Amounts reclassified from accumulated other comprehensive income | 11 | — | (224 | ) | (1,912 | ) | (316 | ) | ||||
Total other comprehensive income, net of tax | 863 | 1,399 | (2,066 | ) | (341 | ) | ||||||
Comprehensive income/ (loss) | 21,326 | (15,592 | ) | (36,295 | ) | (5,995 | ) | |||||
CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | ||||||||||||
For the years ended December 31, | ||||||||||||
2011 | 2012 | 2013 | ||||||||||
RMB | RMB | RMB | US$ | |||||||||
Net cash used in operating activities | (63,412 | ) | (108,007 | ) | (40,370 | ) | (6,669 | ) | ||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (7,779 | ) | (5,716 | ) | — | — | ||||||
Deconsolidation of a consolidated VIE | (2,204 | ) | — | — | — | |||||||
Cash paid pursuant to post-acquisition settlement consideration agreement | (4,286 | ) | — | — | — | |||||||
Cash paid for available-for-sale investments | (99,190 | ) | — | — | — | |||||||
Cash paid for available-for-sale investment on behalf of a subsidiary | — | — | (12,240 | ) | (2,022 | ) | ||||||
Cash paid for long term investment (Note 10) | (6,033 | ) | (3,000 | ) | (4,815 | ) | (795 | ) | ||||
Cash received from sale of available-for-sale investments (Note 11) | — | 18,582 | 57,260 | 9,459 | ||||||||
Net cash used in investing activities | (119,492 | ) | 9,866 | 40,205 | 6,642 | |||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from employee share options exercised | 4,019 | 3,351 | 15,683 | 2,591 | ||||||||
Cash guaranteed as restricted cash | — | — | (60,000 | ) | (9,911 | ) | ||||||
Payment for repurchase of ordinary shares | (63,631 | ) | (9,463 | ) | — | — | ||||||
Payment of dividend | — | (130 | ) | — | — | |||||||
Net cash used in financing activities | (59,612 | ) | (6,242 | ) | (44,317 | ) | (7,320 | ) | ||||
Net decrease in cash and cash equivalents | (242,516 | ) | (104,383 | ) | (44,482 | ) | (7,347 | ) | ||||
Cash and cash equivalents at beginning of the year | 519,221 | 269,859 | 164,024 | 27,095 | ||||||||
Effect of foreign exchange rate changes on cash | (6,846 | ) | (1,452 | ) | (1,916 | ) | (317 | ) | ||||
Cash and cash equivalents at end of the year | 269,859 | 164,024 | 117,626 | 19,431 | ||||||||
(a) Basis of presentation | ||||||||||||
The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the Company used the equity method to account for investment in its subsidiaries and VIEs. The Company records its investment in its subsidiaries and VIEs under the equity method of accounting. Such investment is presented on the balance sheets as “Investment in subsidiaries” and share of their income as “Equity in income of subsidiaries” on the statements of comprehensive income (loss). The PRC subsidiary and VIEs have restrictions on their ability to pay dividends to the Company under PRC laws and regulations (Note 21). The subsidiaries and VIEs did not pay any dividends to the Company for the years presented. | ||||||||||||
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted by reference to the consolidated financial statements. | ||||||||||||
(b) Commitments | ||||||||||||
The Company does not have a significant commitments or long-term obligations as of any of the periods presented. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||
Dec. 31, 2013 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
Basis of presentation | ' | ||
(a) Basis of presentation | |||
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”). | |||
Principles of consolidation | ' | ||
(b) Principles of consolidation | |||
The consolidated financial statements include the financial statements of the Company, its subsidiaries and the VIEs for which the Company is the primary beneficiary. All significant inter-company transactions and balances between the Company, its subsidiaries and the VIEs are eliminated upon consolidation. Results of acquired subsidiaries or VIEs are consolidated from the date on which control is transferred to the Company. | |||
Use of estimates | ' | ||
(c) Use of estimates | |||
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Areas where management uses subjective judgment include, but are not limited to, estimating the useful lives of long-lived assets and intangible assets, impairment of long-lived assets and intangible assets, allowance for doubtful debts, accounting for deferred income taxes, accounting for share-based compensation arrangements and accounting for the Company’s post-acquisition settlement consideration and subsequent changes in this estimated forecasted liability amount (Note 4(a)). The valuation of and accounting for the Company’s financial instruments also requires significant estimates and judgments provided by management. Changes in facts and circumstances may result in revised estimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements. | |||
Foreign currency | ' | ||
(d) Foreign currency | |||
The functional currency of the Company and each of its subsidiaries is the Renminbi (“RMB”), except for ChinaCache US and ChinaCache HK, which are the United States dollar (“US$”) and Hong Kong dollar (“HK$”) respectively, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 (“ASC 830”) “Foreign Currency Matters”. The reporting currency of the Company is also the RMB. Transactions denominated in foreign currencies are re-measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. Exchange gains and losses are included in foreign exchange gains and losses in the consolidated statements of comprehensive income (loss). | |||
Assets and liabilities of ChinaCache US and ChinaCache HK are translated into RMB at fiscal year-end exchange rates. Income and expense items are translated at average exchange rates prevailing during the fiscal year. The resulting translation adjustments are recorded in other comprehensive income/(loss). | |||
Convenience translation | ' | ||
(e) Convenience translation | |||
Amounts in United States dollars (‘‘US$’’) are presented for the convenience of the reader and are translated at the noon buying rate of US$1.00 to RMB6.0537 on December 31, 2013 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. | |||
Cash and cash equivalents | ' | ||
(f) Cash and cash equivalents | |||
Cash and cash equivalents consists of cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal and use and have original maturities less than three months. | |||
Restricted cash | ' | ||
(g) Restricted cash | |||
Restricted cash represents amounts held by a bank as security for the short term loan and, therefore, are not available for the Group’s use. | |||
Accounts receivable and allowance for doubtful accounts | ' | ||
(h) Accounts receivable and allowance for doubtful accounts | |||
Accounts receivable are carried at net realizable value. An allowance for doubtful accounts is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. An accounts receivable is written off after all collection effort has ceased. | |||
Property and equipment | ' | ||
(i) Property and equipment | |||
Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: | |||
Optical Fibers | 20 years | ||
Computer equipment | 3-5 years | ||
Furniture, fixtures and office equipment | 5 years | ||
Motor vehicles | 10 years | ||
Leasehold improvements | Over the shorter of lease term or the estimated useful lives of the assets | ||
Repair and maintenance costs are charged to expense when incurred, whereas the cost of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. Retirement, sale and disposals of assets are recorded by removing the cost and related accumulated depreciation with any resulting gain or loss reflected in the consolidated statements of comprehensive income (loss). | |||
Property and equipment that are purchased or constructed which require a period of time before the assets are ready for their intended use are accounted for as construction-in-progress. Construction-in-progress is recorded at acquisition cost, including installation costs. Construction-in-progress is transferred to specific property and equipment accounts and commences depreciation when these assets are ready for their intended use. The Company did not recognize any capitalized interest during the years ended December 31, 2011, 2012 and 2013. | |||
Land use right | ' | ||
(j) Land use right | |||
The land use right represent the amounts paid and relevant costs incurred for the right to use land in the PRC and are recorded at purchase cost less accumulated amortization. Amortization is provided on a straight-line basis over the terms of the respective land use right agreement. | |||
Intangible assets | ' | ||
(k) Intangible assets | |||
Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets with a finite useful life are amortized using the straight-line method over the estimated economic life of the intangible assets as follows: | |||
Purchased software | 5 years | ||
Impairment of long-lived assets | ' | ||
(l) Impairment of long-lived assets | |||
The Company evaluates its long-lived assets or asset group, including intangible assets with finite lives, for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of an asset or a group of long-lived assets may not be recoverable. When these events occur, the Company evaluates for impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the excess of the carrying amount of the asset group over its fair value. Fair value is generally determined by discounting the cash flows expected to be generated by the assets, when the market prices are not readily available for the long-lived assets. There is no indication of impairment associated with its long-lived assets as of December 31, 2012 and 2013. | |||
Investments | ' | ||
(m) Investments | |||
Available-for-sale investments | |||
The Company has classified its investment in certain convertible redeemable preferred shares of certain unlisted companies in the PRC and a mutual fund as available-for-sale in accordance with ASC320-10 “Investments — Debt and Equity Securities”. Such available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income in shareholders’ equity. Realized gains or losses are charged to earnings during the period in which the gain or loss is realized. If the Company determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to its estimated fair value. The new cost basis will not be adjusted for subsequent recoveries in fair value. Determination of whether declines in value are other-than-temporary requires significant judgment. Subsequent increases and decreases in the fair value of available-for-sale securities will be included in other comprehensive income except for an other-than-temporary impairment, which would be charged to current period earnings. Impairment of available-for-sale investment for the years ended December 31, 2011, 2012 and 2013 were nil, nil and RMB1,217,000 (US$201,000), respectively. | |||
Dividend and interest income, including the amortization of the premium and discount arising at acquisition, for all categories of investments in securities are included in earnings. | |||
Investment — Equity method/ Cost | |||
Where consolidation is not appropriate, the Company applies the equity method of accounting that is consistent with ASC 323 “Investments - Equity Method and Joint Ventures” to limited partnerships in which the Company holds either (a) a five percent or greater interest or (b) less than a five percent interest when the Company has more than virtually no influence over the operating or financial policies of the limited partnership. The Company considers certain qualitative factors in assessing whether it has more than virtually no influence for partnership interests of less than five percent. For investments other than those described in (a) and (b) above, the Company applies the cost method of accounting that is consistent with ASC 325 “Investments — Other”. | |||
Fair value of financial instruments | ' | ||
(n) Fair value of financial instruments | |||
The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, restricted cash, accounts receivable, other receivables included in prepaid expenses and other current assets, short term loan, accounts payables, balances with related parties and other payables, approximate their fair values because of the short-term maturity of these instruments. Available-for-sale investments were initially recognized at cost and subsequently remeasured at the end of each reporting period with the adjustment in its fair value recognized in accumulated other comprehensive income. The Company, with the assistance of an independent third party valuation firm, determined the estimated fair value of its available-for-sale investments that are recognized in the consolidated financial statements. | |||
Discontinued Operations | ' | ||
(o) Discontinued Operations | |||
In accordance with ASC 205-20 “Discontinued Operations”, when a component of an entity has been disposed of and the Company will no longer have significant continuing involvement in the operations of the component, the results of its operations should be classified as discontinued operations in the consolidated statement of comprehensive income (loss) for all periods presented. | |||
Revenue recognition | ' | ||
(p) Revenue recognition | |||
The Company provides a portfolio of content and application delivery total solutions within its one class of services, such as, web page content services; file transfer services; rich media streaming services; guaranteed application delivery; managed internet data services; cloud services; content bridging services; mobile internet solution; and value-added services to its customers that in turn improve the performance, reliability and scalability of their internet services and applications. | |||
Consistent with the criteria of ASC 605, “Revenue Recognition”, the Company recognizes revenue from sales of these services when there is a signed sales agreement with fixed or determinable fees, services have been provided to the customer and collection of the resulting customer’s receivable is reasonably assured. | |||
The Company’s services are provided under the terms of a one-year master service agreement, which will typically accompany a one-year term renewal option with the same terms and conditions. Customers can choose at the outset of the arrangement to either use the Company’s services through a monthly fixed bandwidth or traffic volume usage and fee arrangement or choose a plan based on actual bandwidth or traffic volume used during the month at fixed pre-set rates. The Company recognizes and bills for revenue for excess usage, if any, in the month of its occurrence to the extent a customer’s usage of the services exceeds their pre-set monthly fixed bandwidth usage and fee arrangements. The rates as specified in the master service agreements are fixed for the duration of the contract term and are not subject to adjustment. | |||
The Company may charge its customers an initial set-up fee prior to the commencement of their services. To date these amounts have been insignificant, however, the Company’s policy is to record these initial set-up fees as deferred revenue and recognize them as revenue ratably over the estimated life of the customer arrangement. | |||
Business tax and related surcharges on revenues earned from provision of services to customers is recorded as a deduction from gross revenue to derive net revenue in the same period in which the related revenue is recognized. The business tax and related surcharges expenses for the years ended December 31, 2011, 2012 and 2013 amounted to approximately RMB24,215,000, RMB26,377,000 and RMB23,906,000 (US$3,949,000), respectively. | |||
Effective in September 2012, 6% of value-added tax, or VAT, replaced the original 5% business tax in Beijing as a result of the PRC government’s pilot VAT reform program, which applies to all services provided by Chinacache Beijing and Beijing Jingtian and certain services provided by Beijing Blue IT. | |||
Cost of revenues | ' | ||
(q) Cost of revenues | |||
Cost of revenue consists primarily of depreciation of the Company’s long-lived assets, amortization of acquired intangible assets, maintenance, purchase of bandwidth and other overhead expenses directly attributable to the provision of Content and Application Delivery services. | |||
Prior to September 2012, ChinaCache Beijing was subject to business tax and other surcharges on certain revenues earned for exclusive business support, technical and consulting services provided to the Company’s VIEs, pursuant to the VIE agreements (Note 1). Since September 2012, all service provided by ChinaCache Beijing is subject to VAT. Such business tax, VAT (to the extent that is non-deductible) and other surcharges are accrued and charged to cost of revenues as the related exclusive business support, technical and consulting services are rendered. | |||
Advertising expenditures | ' | ||
(r) Advertising expenditures | |||
Advertising expenditures are expensed as incurred. Advertising expenditures, included in sales and marketing expenses, amounted to approximately RMB3,159,000, RMB2,196,000 and RMB81,000 (US$13,000), for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
Research and development costs | ' | ||
(s) Research and development costs | |||
Research and development costs consist primarily of payroll and related personnel costs for minor routine upgrades and related enhancements to the Company’s services and network. Costs incurred in the development of the Company’s services are expensed as incurred. To date, the amount of costs qualifying for capitalization has been insignificant. | |||
Government Grants | ' | ||
(t) Government Grants | |||
Government grants are provided by the relevant PRC municipal government authorities to subsidize the cost of certain research and development projects. The amount of such government grants are determined solely at the discretion of the relevant government authorities and there is no assurance that the Company will continue to receive these government grants in the future. Government grants are recognized when it is probable that the Company will comply with the conditions attached to them, and the grants are received. When the grant relates to an expense item, it is recognized as deferred government grants and released to the consolidated statements of comprehensive income (loss) over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate, as a reduction of the related operating expense. Where the grant relates to an asset, it is recognized as deferred government grants and released to the consolidated statements of comprehensive income (loss) in equal amounts over the expected useful life of the related asset, when operational, as a reduction of the related depreciation expense. | |||
Government grants received by the Company also consist of unrestricted grants which are received on an unsolicited and unconditional basis to support the growth of the Company and do not relate to the Company’s operating activities. Unrestricted grants are classified as non-operating income and recorded in other income on the consolidated statements of comprehensive income (loss) upon receipt. As of December 31, 2011, 2012 and 2013, the Company received unrestricted grant amounted to nil, RMB1,262,000 and RMB1,031,000 (US$170,000), respectively. | |||
Leases | ' | ||
(u) Leases | |||
Leases are classified at the inception date as either a capital lease or an operating lease. The Company did not enter into any leases whereby it is the lessor for any of the periods presented. As the lessee, a lease is a capital lease if any of the following conditions exists: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life, or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A lease involving integral equipment is a capital lease only if condition (a) or (b) exists. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. | |||
All other leases are accounted for as operating leases wherein rental payments are expensed on a straight-line basis over the periods of their respective leases. The Company leases office space and employee accommodation under operating lease agreements. Certain of the lease agreements contain rent holidays. Rent holidays are considered in determining the straight-line rent expense to be recorded over the lease term. The lease term begins on the date of initial possession of the lease property for purposes of recognizing lease expense on a straight-line basis over the term of the lease. The excess of rent expense and rent paid, as the case may be for respective leases, is recorded as deferred rental included in the prepaid expenses and other current assets in the consolidated balance sheets. | |||
Income taxes | ' | ||
(v) Income taxes | |||
The Company follows the liability method in accounting for income taxes in accordance to ASC topic 740 (“ASC 740”), Income Taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance against deferred tax assets if, based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. | |||
The Company adopted ASC 740 to account for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the consolidated financial statements. The Company has elected to classify interest and penalties related to unrecognized tax benefits, if and when required, as part of “interest expense” and “other expenses,” respectively, in the consolidated statements of comprehensive income (loss). | |||
Share-based compensation | ' | ||
(w) Share-based compensation | |||
Share options and restricted shares award granted to employees are accounted for under ASC 718 Compensation — Stock Compensation. In accordance with ASC 718, the Company determines whether a share option or restricted shares award should be classified and accounted for as a liability award or an equity award. All grants of share options and restricted shares award to employees classified as equity awards are recognized in the financial statements over their requisite service period based on their grant date fair values. All grants of share options to employees classified as liability awards are remeasured at the end of each reporting period with any fair value adjustments recorded to the current period expense. | |||
The Company has elected to recognize compensation expenses using the accelerated method for its share options and restricted share award granted. For restricted share awards granted with performance conditions, the Company commences recognition of the related compensation expense if it is probable the defined performance condition will be met. To the extent that the Company determines that it is probable that a different number of share-based awards will vest depending on the outcome of the performance condition, the cumulative effect of the change in estimate is recognized in the period of change. | |||
ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in the subsequent period if actual forfeitures differ from initial estimates. Forfeiture rate is estimated based on historical and future expectations of employee turnover rates and are adjusted to reflect future changes in circumstances and facts, if any. Share-based compensation expense is recorded net of estimated forfeitures such that expense was recorded only for those share-based awards that are expected to vest. During the years ended December 31, 2011, 2012 and 2013, the Company estimated that the forfeiture rate for both the management group and the non-management group was zero. To the extent the Company revises this estimate in the future, the share-based payments could be materially impacted in the period of revision, as well as in following periods. | |||
The Company records share-based compensation expense for awards granted to non-employees in exchange for services at fair value in accordance with the provisions of ASC 505-50, “Equity-based Payments to Non-Employees.” For the awards granted to non-employees, the Company will record compensation expenses equal to the fair value of the share options at the measurement date, which is determined to be the earlier of the performance commitment date or the service completion date. | |||
The Company, with the assistance of independent valuation firms, determined the estimated fair values of the share options granted to employees and non-employees using the binomial option pricing model. | |||
Earnings (loss) per share | ' | ||
(x) Earnings (loss) per share | |||
In accordance with ASC 260, “Earnings per Share,” basic earnings (loss) per share is computed by dividing net earnings (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share for continuing operations is calculated by dividing net profit from continuing operations attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Diluted earnings per share for discontinued operations is then calculated by dividing net profit from discontinued operations attributable to ordinary shareholders by the same number of potential ordinary shares determined in the earlier step. Ordinary equivalent shares consist of the ordinary shares issuable upon the conversion of the share options, using the treasury stock method. Ordinary share equivalents are excluded from the computation of diluted per share if their effects would be anti-dilutive. | |||
Comprehensive income (loss) | ' | ||
(y) Comprehensive income (loss) | |||
Comprehensive income (loss) is defined as the increase (decrease) in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Comprehensive income (loss) is reported in the consolidated statements of comprehensive income (loss). Accumulated other comprehensive income of the Company includes foreign currency translation adjustments related to ChinaCache US and ChinaCache HK, whose functional currency are US$ and HK$, respectively, and the change in fair value of available-for-sale investments (Note 11) and their corresponding deferred tax impact, if any. | |||
Segment reporting | ' | ||
(z) Segment reporting | |||
The Company follows ASC 280, “Segment Reporting.” The Company’s Chief Executive Officer or chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only one reportable segment. The Company operates and manages its business as a single segment through the provision of a single class of global services for accelerating and improving the delivery of content and applications over the Internet. As the Company’s long-lived assets are substantially all located in the PRC and substantially all the Company’s revenues are derived from within the PRC, no geographical segments are presented. | |||
Employee benefits | ' | ||
(aa) Employee benefits | |||
The full-time employees of the Company’s PRC subsidiaries are entitled to staff welfare benefits including medical care, housing fund, unemployment insurance and pension benefits, which are government mandated defined contribution plans. These entities are required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. The total amounts for such employee benefits, which were expensed as incurred, were RMB12,939,000, RMB22,064,000 and RMB41,036,000 (US$6,778,000) for the years ended December 31, 2011, 2012 and 2013, respectively. | |||
Share Repurchase Program | ' | ||
(bb) Share Repurchase Program | |||
Pursuant to a Board of Director’s resolution on June 13, 2011, the Company’s management is authorized to repurchase up to US$10 million of the Company’s ADSs (“2011 Share Repurchase Plan”) in the next 12 months. As of December 2011, the Company had completed its 2011 Share Repurchase Plan by repurchasing 1,641,311 ADSs amounting to RMB63,631,000 (US$10,000,000) under the approved plan. | |||
Pursuant to a Board of Directors’ resolution on May 18, 2012, the Company’s management is authorized to repurchase up to US$10 million of the Company’s ADSs (“2012 Share Repurchase Plan”). As of December 31, 2012, the Company had repurchased 319,827 ADSs amounting to RMB9,470,000 (US$1,520,000) under the 2012 Share Repurchase Plan. | |||
The Company accounted for those shares repurchase as Treasury Stock at cost in accordance to ASC Subtopic 505-30 (“ASC 505-30”), Treasury Stock, and is shown separately in the Shareholders’ Equity as the Company has not yet decided on the ultimate disposition of those ADSs acquired. When the Company decides to retire the treasury stock, the difference between the original issuance price and the repurchase price is debited into accumulated deficit. | |||
Recently adopted accounting pronouncements | ' | ||
(cc) Recently adopted accounting pronouncements | |||
In March of 2013, the FASB issued Accounting Standards Update No. 2013-05 (“ASU 2013-05”) “Foreign Currency Matters, Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” The amendments clarify the applicable guidance for the de-recognition of all or a portion of a cumulative translation adjustment when an entity ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity or when other changes stipulated occur and involve a foreign entity. The amendments are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The Company will adopt ASU 2013-05 beginning January 1, 2014, and does not expect that the adoption to have a material impact on its consolidated financial statements. | |||
In March of 2013, the FASB issued Accounting Standards Update No. 2013-11 (“ASU 2013-11”) “Income Taxes—Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carry forward, a Similar Tax Loss, or a Tax Credit Carry forward Exists.” The amendments clarify that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss, similar tax loss, or tax credit carry forward, except as noted in the following sentence. To the extent a net operating loss, similar tax loss, or tax credit carry forward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such a purpose, then under this exception the unrecognized tax benefit is to be presented in the financial statements as a liability and should not be combined with (netted with) the deferred tax asset(s). The assessment of whether a deferred tax asset is “available” is based on the unrecognized tax benefit and deferred tax asset amounts that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company early adopted ASU 2013-11 and, the adoption of ASU 2013-11 does not have a material impact on the consolidated financial statements. | |||
Comparative information | ' | ||
(dd) Comparative information | |||
Certain items in prior years’ consolidated financial statements have been reclassified to conform to the current period’s presentation to facilitate comparison. | |||
ORGANIZATION_Tables
ORGANIZATION (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
ORGANIZATION | ' | |||||||||
Schedule of subsidiaries of the Company and variable interest entities where the Company is the primary beneficiary | ' | |||||||||
Date of incorporation | Place of incorporation | Percentage of | Principal activities | |||||||
ownership | ||||||||||
Subsidiaries | ||||||||||
ChinaCache Network Technology (Beijing) Ltd. (“ChinaCache Beijing”) | August 25, 2005 | The PRC | 100 | % | Provision of Technical Consultation services | |||||
ChinaCache North America Inc. (“ChinaCache US”) | August 16, 2007 | United States of America | 100 | % | Provision of Content and Application Delivery services | |||||
ChinaCache Ireland Limited (“ChinaCache IE”) | November 18, 2013 | Ireland | 100 | % | Provision of Content and Application Delivery services | |||||
ChinaCache Networks Hong Kong Ltd. (“ChinaCache HK”) | April 7, 2008 | Hong Kong | 100 | % | Provision of Content and Application Delivery services | |||||
JNet Holdings Limited (“JNet Holdings”) | September 27, 2007 | British Virgin Islands | 100 | % | Investment holding | |||||
ChinaCache Xin Run Technology (Beijing) Co., Ltd. (“Xin Run”) | July 18, 2011 | The PRC | 100 | % | Research & Development center | |||||
Metasequoia Investment Inc. (“Metasequoia”) | March 28, 2012 | British Virgin Islands | 100 | % | Investment holding | |||||
VIEs | ||||||||||
Beijing Blue I.T. Technologies Co., Ltd. (“Beijing Blue IT”)* | June 7, 1998 | The PRC | — | Provision of Content and Application Delivery services | ||||||
Beijing Jingtian Technology Limited (“Beijing Jingtian”) * | September 1, 2005 | The PRC | — | Provision of Content and Application Delivery services | ||||||
* The equity interest of Beijing Blue IT and Beijing Jingtian are held by the Founders and two employees of the Company, respectively (collectively the “Nominee Shareholders”). | ||||||||||
Schedule of financial information of the consolidated VIEs before eliminating the intercompany balances and transactions between the consolidated VIEs and other entities within the Group | ' | |||||||||
As of December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB | RMB | US$ | ||||||||
ASSETS: | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | 69,503 | 77,400 | 12,786 | |||||||
Accounts receivable (net of allowance for doubtful accounts of RMB 24,369 and RMB 11,894 (US$1,965) as of December 31, 2012 and 2013, respectively) | 219,324 | 297,947 | 49,217 | |||||||
Prepaid expenses and other current assets | 23,393 | 25,871 | 4,274 | |||||||
Deferred tax assets | 12,878 | 6,546 | 1,081 | |||||||
Amounts due from inter-companies(1) | — | 6,300 | 1,041 | |||||||
Amounts due from a related party(2) | — | 141 | 23 | |||||||
Total current assets | 325,098 | 414,205 | 68,422 | |||||||
Non-current assets: | ||||||||||
Property and equipment, net | 123,877 | 185,107 | 30,577 | |||||||
Cloud infrastructure construction in progress | — | 5,705 | 942 | |||||||
Intangible assets, net | — | 4,702 | 777 | |||||||
Long term investments | 6,103 | 7,603 | 1,256 | |||||||
Deferred tax assets | 4,602 | 602 | 99 | |||||||
Long term deposits and other non-current assets | 3,676 | 4,458 | 736 | |||||||
Total non-current assets | 138,258 | 208,177 | 34,387 | |||||||
TOTAL ASSETS | 463,356 | 622,382 | 102,809 | |||||||
As of December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB | RMB | US$ | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | 103,261 | 200,483 | 33,117 | |||||||
Accrued employee benefits | 26,441 | 33,448 | 5,525 | |||||||
Accrued expenses and other payables | 48,776 | 71,095 | 11,745 | |||||||
Income tax payable | 15,200 | 5,777 | 954 | |||||||
Liabilities for uncertain tax positions | 4,050 | 6,296 | 1,040 | |||||||
Amounts due to inter-companies(1) | 208,743 | 236,584 | 39,081 | |||||||
Amounts due to a related party (2) | 1,044 | 844 | 139 | |||||||
Deferred government grant | — | 24,360 | 4,024 | |||||||
Total current liabilities | 407,515 | 578,887 | 95,625 | |||||||
Non-current liabilities: | ||||||||||
Deferred government grant | 3,360 | — | — | |||||||
Total non-current liabilities | 3,360 | — | — | |||||||
Total liabilities | 410,875 | 578,887 | 95,625 | |||||||
(1) Amount due from/to inter-companies consist of intercompany receivables/payables to the other companies within the Group. | ||||||||||
(2) Information with respect to related parties is discussed in Note 19. | ||||||||||
For the Years Ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Net revenues | ||||||||||
-Third party customers | 600,203 | 745,835 | 910,757 | 150,446 | ||||||
-Inter-companies | 2,353 | 12,588 | 146,640 | 24,223 | ||||||
-A related party customer | — | 12,543 | — | — | ||||||
Net profit/ (loss) | 43,723 | 20,406 | (12,761 | ) | (2,108 | ) | ||||
Income from discontinued operations (including gain on disposal of Shanghai JNet (Note 4(b))) | 31,977 | — | — | — | ||||||
Income from discontinued operations relates to the operations of Shanghai JNet that has been classified as discontinued operations upon the disposal of Shanghai JNet and the concurrent termination of the VIE Agreements (Note 4(b)). | ||||||||||
For the Years Ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Net cash provided by operating activities | 94,710 | 51,059 | 97,554 | 16,114 | ||||||
Net cash used in investing activities | (73,873 | (49,933 | ) | (89,657 | ) | (14,810 | ) | |||
Net cash used in financing activities | — | — | — | — |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
Schedule of estimated useful lives of property and equipment | ' | ||
Optical Fibers | 20 years | ||
Computer equipment | 3-5 years | ||
Furniture, fixtures and office equipment | 5 years | ||
Motor vehicles | 10 years | ||
Leasehold improvements | Over the shorter of lease term or the estimated useful lives of the assets | ||
Schedule of estimated economic life of the intangible assets | ' | ||
Purchased software | 5 years |
CONCENTRATION_OF_RISK_Tables
CONCENTRATION OF RISK (Tables) (Customer risk) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Revenues | ' | |||||||||
CONCENTRATION OF RISK | ' | |||||||||
Schedule of concentration risk | ' | |||||||||
Years as of December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Customer A | 98,684 | 82,663 | 112,292 | 18,549 | ||||||
Customer B | * | * | 160,582 | 26,562 | ||||||
*not greater than 10% | ||||||||||
Accounts receivables | ' | |||||||||
CONCENTRATION OF RISK | ' | |||||||||
Schedule of concentration risk | ' | |||||||||
Years as of December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB’000 | RMB’000 | US$’000 | ||||||||
Customer A | 46,324 | 44,987 | 7,431 | |||||||
Customer C | * | 32,571 | 5,380 | |||||||
*not greater than 10% |
CONSOLIDATION_DECONSOLIDATION_1
CONSOLIDATION (DECONSOLIDATION) OF SHANGHAI JNET (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
CONSOLIDATION (DECONSOLIDATION) OF SHANGHAI JNET | ' | |||
Schedule of gain recognized on deconsolidation | ' | |||
RMB’ 000 | ||||
Disposition of net assets of Shanghai JNet (Note 22) | (31,453 | ) | ||
Waiver of acquisition consideration and post-acquisition settlement consideration (see (iii) above) | 62,169 | |||
Gain on deconsolidation of Shanghai JNet | 30,716 |
ACCOUNTS_RECEIVABLE_NET_Tables
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCOUNTS RECEIVABLE, NET | ' | |||||||
Schedule of accounts receivable and allowance for doubtful accounts | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Accounts receivable | 255,744 | 318,131 | 52,552 | |||||
Less: allowance for doubtful accounts | (25,545 | ) | (11,894 | ) | (1,965 | ) | ||
230,199 | 306,237 | 50,587 | ||||||
Schedule of analysis of the allowance for doubtful accounts | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Balance, beginning of year | 2,809 | 25,545 | 4,220 | |||||
Additions for the current year | 22,768 | 23,804 | 3,932 | |||||
Deductions for the current year | ||||||||
-Recovery | (32 | ) | (103 | ) | (17 | ) | ||
-Written off | — | (37,352 | ) | (6,170 | ) | |||
Balance, end of year | 25,545 | 11,894 | 1,965 |
PREPAID_EXPENSES_AND_OTHER_CUR1
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ' | |||||||
Schedule of prepaid expenses and other current assets | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Prepaid expense for bandwidth and servers (i) | 17,147 | 12,419 | 2,052 | |||||
Prepaid marketing and consulting fee in connection with the Cloud infrastructure | — | 7,500 | 1,239 | |||||
Income tax receivable | — | 4,590 | 758 | |||||
Staff field advances | 1,444 | 2,570 | 425 | |||||
Other deposit and receivables | 12,649 | 23,470 | 3,877 | |||||
31,240 | 50,549 | 8,351 | ||||||
(i) Prepaid expense for bandwidth and servers represents the unamortized portion of prepaid payments made to the Company’s telecom operators and certain technology companies, who provide the Company with access to bandwidth and network servers. |
PROPERTY_AND_EQUIPMENT_NET_Tab
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
PROPERTY AND EQUIPMENT, NET | ' | |||||||||
Schedule of property and equipment, including those held under capital leases | ' | |||||||||
December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB’000 | RMB’000 | US$’000 | ||||||||
At cost: | ||||||||||
Optical fibers | 13,100 | 13,100 | 2,164 | |||||||
Computer equipment | 424,808 | 514,059 | 84,918 | |||||||
Furniture and fixtures | 7,538 | 9,185 | 1,517 | |||||||
Leasehold improvements | 15,499 | 19,725 | 3,258 | |||||||
Motor vehicles | 4,206 | 6,295 | 1,040 | |||||||
465,151 | 562,364 | 92,897 | ||||||||
Less: accumulated depreciation | (285,860 | ) | (321,662 | ) | (53,135 | ) | ||||
Less: accumulated impairment | (52 | ) | (52 | ) | (9 | ) | ||||
179,239 | 240,650 | 39,753 | ||||||||
Schedule of depreciation expenses | ' | |||||||||
For the years ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Cost of revenue | 63,318 | 51,911 | 45,581 | 7,529 | ||||||
Sales and marketing expenses | 855 | 712 | 280 | 46 | ||||||
General and administrative expenses | 1,073 | 1,171 | 5,706 | 943 | ||||||
Research and development expenses | 2,099 | 6,096 | 8,309 | 1,373 | ||||||
67,345 | 59,890 | 59,876 | 9,891 | |||||||
Schedule of carrying amounts of the company's property and equipment held under capital leases at respective balance sheet dates | ' | |||||||||
December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB’000 | RMB’000 | US$’000 | ||||||||
Optical fibers | 13,100 | 13,100 | 2,164 | |||||||
Computer equipment | 47,243 | — | — | |||||||
60,343 | 13,100 | 2,164 | ||||||||
Less: accumulated depreciation | (39,662 | ) | (3,875 | ) | (640 | ) | ||||
20,681 | 9,225 | 1,524 |
INTANGIBLE_ASSETS_Tables
INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
INTANGIBLE ASSETS | ' | |||||||
Schedule of the Company's intangible assets | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Purchased software | — | 3,368 | 556 | |||||
Addition | 3,368 | 3,139 | 519 | |||||
Less: amortization | — | (944 | ) | (156 | ) | |||
3,368 | 5,563 | 919 | ||||||
Schedule of estimated annual amortization expense for each of the five succeeding fiscal years | ' | |||||||
Amortization | ||||||||
RMB’000 | US$’000 | |||||||
For the years ending December 31, | ||||||||
2014 | 1,301 | 215 | ||||||
2015 | 1,301 | 215 | ||||||
2016 | 1,301 | 215 | ||||||
2017 | 1,301 | 215 | ||||||
2018 | 359 | 59 |
LAND_USE_RIGHT_CLOUD_INFRASTRU1
LAND USE RIGHT / CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
LAND USE RIGHT / CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS | ' | |||||||
Schedule of land use right | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Land use right | — | 51,678 | 8,537 | |||||
Less: accumulated amortization | — | (948 | ) | (157 | ) | |||
— | 50,730 | 8,380 |
LONG_TERM_INVESTMENTS_Tables
LONG TERM INVESTMENTS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
LONG TERM INVESTMENTS | ' | |||||||
Schedule of long term investments | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
PRC Fund | 6,103 | 7,603 | 1,256 | |||||
United States Fund | 9,033 | 13,847 | 2,287 | |||||
15,136 | 21,450 | 3,543 |
AVAILABLEFORSALE_INVESTMENTS_T
AVAILABLE-FOR-SALE INVESTMENTS (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
AVAILABLE-FOR-SALE INVESTMENTS | ' | |||||||
Schedule of available-for-sale investments | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Short-term: | ||||||||
Investment in a mutual fund (a) | — | 24,636 | 4,070 | |||||
— | 24,636 | 4,070 | ||||||
Long-term | ||||||||
Investment in a mutual fund (a) | 80,576 | — | — | |||||
Investment in preferred shares of certain unlisted companies (b) | 1,716 | 13,956 | 2,305 | |||||
Less: accumulated impairment (b) | — | (1,716 | ) | (283 | ) | |||
82,292 | 12,240 | 2,022 | ||||||
Total available-for-sale investments | 82,292 | 36,876 | 6,092 | |||||
(a) On April 4, 2011, the Company purchased 9,790.59 units of a mutual fund for RMB97,931,000. The Company has accounted for the investment in the mutual fund as an available-for-sale investment, where such investment will be carried at fair value, with unrealized gains and losses excluded from earnings and reported as a net amount in as other comprehensive income in the consolidated statements of comprehensive income (loss) until realized. | ||||||||
In 2013, the Company disposed 5,583.30 unit (2012: 1,838.04 unit) with a consideration of RMB57,260,000 (US$9,459,000 ) (2012:RMB18,582,000) and reclassified the accumulated unrealized gains recorded in accumulated other comprehensive income of RMB1,413,000 (US$233,000) (2012:RMB224,000) to other (expense)/income in the consolidated statements of comprehensive income (loss) on the date of disposal. The fair value of the remaining investment was RMB24,636,000 (US$4,070,000) as of December 31, 2013 (December 31, 2012:RMB80,576,000), as derived from level one observable inputs, with the change of fair value of RMB93,000 (US$15,000) (2012:RMB1,370,000) recorded in other comprehensive income. | ||||||||
There was no impairment indicators noted associated with this investment as of December 31, 2012 and 2013. | ||||||||
(b) On April 28, 2011, the Company entered into an agreement with an unlisted company in the PRC (“Investee A”) to purchase 970,591 Series A Preferred Shares for RMB1,259,000 (US$200,000). The Company has the right on or after five years from the issuance date to request redemption of all its Series A Preferred Shares holders, at a redemption price equal to 120% of its original issuance price. | ||||||||
The Company has accounted for the investment in the Series A Preferred Shares as an available-for-sale investment where such investment will be carried at fair value, with unrealized gains and losses excluded from earnings and reported as other comprehensive income in the consolidated statements of comprehensive income (loss) until realized. As of December 31, 2012, the fair value of the investment in the Investee A was RMB1,716,000 with the change of fair value of RMB457,000, recorded in other comprehensive income. In 2013, the Company believed that there was a decline in value that was other-than-temporary, and recorded RMB1,716,000 (US$283,000) in “impairment of available-for-sale investment” in the consolidated statements of comprehensive income (loss) including RMB499,000 (US$73,000) reclassified from accumulated other comprehensive income. | ||||||||
On August 14, 2013, the Company entered into an agreement with an unlisted company in Cayman Island (“Investee B”) to purchase 13,971,428 Series A Preferred Shares for RMB12,240,000 (US$2,000,000). The Company has the right on or after five years from the issuance date to request redemption of all its Series A Preferred Shares holders, at a redemption price equal to 120% of its original issuance price. | ||||||||
The Company has accounted for the investment in the Series A Preferred Shares as an available-for-sale investment where such investment will be carried at fair value, with unrealized gains and losses excluded from earnings and reported as other comprehensive income in the consolidated statements of comprehensive income (loss) until realized. As of December 31, 2013, the fair value of the investment in the Investee B was RMB12,240,000 (US$2,022,000) with no change of fair value. There was no impairment indicators noted associated with this investment as of December 31, 2013. |
ACCRUED_EXPENSES_AND_OTHER_PAY1
ACCRUED EXPENSES AND OTHER PAYABLES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCRUED EXPENSES AND OTHER PAYABLES | ' | |||||||
Schedule of accrued expenses and other payables | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Business tax and other tax payables | 16,276 | 11,793 | 1,948 | |||||
Payables for purchase of property and equipment | 13,224 | 39,853 | 6,583 | |||||
Advance from a potential buyer of part of the Cloud infrastructure | — | 75,000 | 12,389 | |||||
Advance from customers | 11,669 | 12,079 | 1,995 | |||||
Other accrued expenses | 16,604 | 18,350 | 3,032 | |||||
Total | 57,773 | 157,075 | 25,947 |
DEFERRED_GOVERNMENT_GRANT_Tabl
DEFERRED GOVERNMENT GRANT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
DEFERRED GOVERNMENT GRANT | ' | |||||||
Schedule of deferred government grant | ' | |||||||
December 31, | ||||||||
2012 | 2013 | |||||||
RMB’000 | RMB’000 | US$’000 | ||||||
Beginning | — | 3,360 | 555 | |||||
Received | 3,360 | 21,000 | 3,469 | |||||
Recognized as income during the year | — | — | — | |||||
Ending | 3,360 | 24,360 | 4,024 | |||||
Recognize in one year | — | 24,360 | 4,024 |
SHAREBASED_COMPENSATION_Tables
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Share-based compensation | ' | |||||||||
Summary of the Company's restricted shares award issued under 2011 Plan | ' | |||||||||
Number of | Weighted average grant | |||||||||
ordinary shares | date fair value | |||||||||
(US$) | ||||||||||
Outstanding, January 1, 2013 | — | |||||||||
Granted | 8,448,992 | 0.24 | ||||||||
Vested | — | |||||||||
Forfeited | (1,689,798 | ) | 0.24 | |||||||
Outstanding, December 31, 2013 | 6,759,194 | 0.24 | ||||||||
Vested and expected to vest at December 31, 2013 | 6,759,194 | 0.24 | ||||||||
Schedule of total compensation expense relating to options granted | ' | |||||||||
2011 | 2012 | 2013 | ||||||||
(RMB)’000 | (RMB)’000 | (RMB)’000 | (US$)’000 | |||||||
Cost of revenues | 4,047 | 2,896 | 1,665 | 275 | ||||||
Sales and marketing expenses | 9,669 | 6,917 | 3,853 | 636 | ||||||
General and administration expenses | 8,968 | 3,219 | 3,833 | 633 | ||||||
Research and development expenses | 4,272 | 3,056 | 2,501 | 413 | ||||||
26,956 | 16,088 | 11,852 | 1,957 | |||||||
Employees | ' | |||||||||
Share-based compensation | ' | |||||||||
Summary of entity's share option activity | ' | |||||||||
Number of | Weighted | Weighted | Aggregate | |||||||
options | average Exercise | average | intrinsic value | |||||||
price | remaining | |||||||||
contractual term | ||||||||||
(US$) | (Years) | (US$’000) | ||||||||
Outstanding, January 1, 2012 | 40,285,702 | 0.33 | 8.58 | 1,035 | ||||||
Granted | 2,130,000 | 0.27 | ||||||||
Exercised | (2,406,272 | ) | 0.22 | |||||||
Forfeited | (3,494,672 | ) | 0.3 | |||||||
Outstanding, December 31, 2012 | 36,514,758 | 0.22 | 7.7 | 840 | ||||||
Vested and expected to vest at December 31, 2012 | 36,514,758 | 0.22 | 7.7 | 840 | ||||||
Exercisable at December 31, 2012 | 15,410,254 | 0.19 | 7.16 | 840 | ||||||
Granted | 9,471,008 | 0.24 | ||||||||
Exercised | (11,277,280 | ) | 0.2 | |||||||
Forfeited | (2,304,912 | ) | 0.24 | |||||||
Outstanding, December 31, 2013 | 32,403,574 | 0.23 | 6.78 | 10,479 | ||||||
Vested and expected to vest at December 31, 2013 | 32,403,574 | 0.23 | 6.78 | 10,479 | ||||||
Exercisable at December 31, 2013 | 17,824,031 | 0.21 | 7.16 | 6,211 | ||||||
Schedule of assumptions used in calculation of estimated fair value of the options | ' | |||||||||
June 20, | May 21, | July 8, 2013 | ||||||||
2011 | 2012 | |||||||||
Suboptimal exercise factor | 2.2 | 2.2 | 2.8 | |||||||
Risk-free interest rates | 2.21 | % | 1.73 | % | 2.66 | % | ||||
Expected volatility | 71.2 | % | 67.5 | % | 61.26 | % | ||||
Expected dividend yield | 0 | % | 0 | % | 0 | % | ||||
Weighted average fair value of share option | 0.236 | 0.166 | 0.141 |
ACCUMULATED_OTHER_COMPREHENSIV1
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME | ' | |||||||
Schedule of movement in accumulated other comprehensive income | ' | |||||||
Foreign currency | Unrealized holding | Total | ||||||
translation | gain on available-for- | |||||||
sale Investments | ||||||||
RMB’000 | RMB’000 | RMB’000 | ||||||
Balance as of December 31, 2012 | 1,770 | 1,453 | 3,223 | |||||
Other comprehensive income before reclassification | (1,975 | ) | 1,821 | (154 | ) | |||
Amounts reclassified from accumulated other comprehensive income | — | (1,912 | ) | (1,912 | ) | |||
Balance as of December 31, 2013 | (205 | ) | 1,362 | 1,157 | ||||
Balance as of December 31, 2013, in US$ | (34 | ) | 227 | 193 |
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
INCOME TAXES | ' | |||||||||
Schedule of Loss from continuing operations before income tax expense | ' | |||||||||
For the years ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Non-PRC | 1,236 | 888 | (6,777 | ) | (1,120 | ) | ||||
PRC | (1,605 | ) | (11,586 | ) | (26,157 | ) | (4,320 | ) | ||
(369 | ) | (10,698 | ) | (32,934 | ) | (5,440 | ) | |||
Schedule of income tax expense | ' | |||||||||
For the years ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Current | 13,188 | 17,490 | (11,809 | ) | (1,951 | ) | ||||
Deferred | (2,043 | ) | (11,197 | ) | 13,104 | 2,165 | ||||
11,145 | 6,293 | 1,295 | 214 | |||||||
Schedule of reconciliation of tax computed by applying the statutory income tax rate to income tax expense | ' | |||||||||
For the years ended December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
RMB’000 | RMB’000 | RMB’000 | US$’000 | |||||||
Loss from continuing operations before income tax expense | (369 | ) | (10,698 | ) | (32,934 | ) | (5,440 | ) | ||
Income tax computed at PRC statutory tax rate of 25% | (93 | ) | (2,674 | ) | (8,233 | ) | (1,360 | ) | ||
Preferential tax rates | (948 | ) | 83 | (50 | ) | (8 | ) | |||
International rate differences | 7,327 | 4,376 | 4,459 | 737 | ||||||
Additional 50% tax deduction for qualified research and development expenses | (2,660 | ) | (4,915 | ) | (7,227 | ) | (1,194 | ) | ||
Non-deductible expenses | 11,304 | 10,454 | 22,164 | 3,661 | ||||||
Other permanent difference | — | (6,626 | ) | — | — | |||||
Effect of changes in tax rates on deferred taxes | (1,586 | ) | 3,779 | 3,947 | 652 | |||||
Changes in unrecognized tax benefits | (480 | ) | — | — | — | |||||
Changes in the valuation allowance | (1,719 | ) | 276 | (2,123 | ) | (351 | ) | |||
Effect of changes in tax rates on prior year tax | — | — | (11,642 | ) | (1,923 | ) | ||||
Deferred tax adjustment | — | 1,540 | — | — | ||||||
Income tax expense | 11,145 | 6,293 | 1,295 | 214 | ||||||
Schedule of the components of deferred tax assets and liabilities | ' | |||||||||
For the years ended December 31, | ||||||||||
2012 | 2013 | |||||||||
(RMB’000) | (RMB’000) | (US$’000) | ||||||||
Deferred tax assets: | ||||||||||
Current: | ||||||||||
- Allowance for doubtful accounts | 6,096 | 1,266 | 209 | |||||||
- Deferred Revenue | 840 | 2,436 | 402 | |||||||
- Accruals | 6,690 | 3,394 | 561 | |||||||
Less: valuation allowance | — | — | — | |||||||
Net current deferred tax assets | 13,626 | 7,096 | 1,172 | |||||||
Non-current: | ||||||||||
- Tax losses | 6,481 | 394 | 65 | |||||||
- Property and equipment | 2,202 | 1,719 | 284 | |||||||
Less: valuation allowance | (2,517 | ) | (394 | ) | (65 | ) | ||||
Net non-current deferred tax assets | 6,166 | 1,719 | 284 | |||||||
Total Deferred tax assets | 19,792 | 8,815 | 1,456 | |||||||
Deferred tax liabilities: | ||||||||||
Non-current: | ||||||||||
- Property and equipment | — | 2,127 | 351 | |||||||
Net non-current deferred tax liabilities | — | 2,127 | 351 | |||||||
Total Deferred tax liabilities | — | 2,127 | 351 | |||||||
Schedule of roll-forward of accrued unrecognized tax benefits | ' | |||||||||
December 31, | ||||||||||
2012 | 2013 | |||||||||
RMB’000 | RMB’000 | US$’000 | ||||||||
Balance–beginning | 23,850 | 21,563 | 3,562 | |||||||
Increase based on tax positions related to the current year | 3,169 | 16,694 | 2,757 | |||||||
Decrease based on tax positions related to the current year | (5,456 | ) | (13,956 | ) | (2,305 | ) | ||||
Balance–ending | 21,563 | 24,301 | 4,014 |
RELATED_PARTY_BALANCES_AND_TRA1
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
RELATED PARTY BALANCES AND TRANSACTIONS | ' | |||||||||
Schedule of related party relationships | ' | |||||||||
Name of Related Parties | Relationship with the Company | |||||||||
Mr. Wang Song | The Co-Founder and Director of the Company | |||||||||
Ms. Kou Xiaohong | The Co-Founder and Director of the Company | |||||||||
Blue I.T. Technologies Limited (“Blue IT”) | A company 100% owned by Ms. Kou Xiaohong | |||||||||
Harvest Century International Ltd. (“HCI”) | A company 100% owned by Ms. Kou Xiaohong | |||||||||
Xuntong Tianxia Limited (“Xuntong”) | A company under the significant influence of a senior management of the Company | |||||||||
Jiuzhou Changxiang Technologies (Beijing) Limited (“Jiuzhou Changxiang”) | A company under the significant influence of a senior management of the Company | |||||||||
Schedule of related party balances | ' | |||||||||
Xuntong | Jiuzhou | Ms. Kou | Total | |||||||
Changxiang | Xiaohong | |||||||||
Balance as of January 1, 2012 | — | — | (18 | ) | (18 | ) | ||||
Receivables from Xuntong for services provided | 13,000 | — | — | 13,000 | ||||||
Cash received from Xuntong | (4,360 | ) | — | — | (4,360 | ) | ||||
Service fee charged by Jiuzhou Changxiang | — | (4,139 | ) | — | (4,139 | ) | ||||
Service fee paid to Jiuzhou Changxiang | — | 3,095 | — | 3,095 | ||||||
Balance as of December 31, 2012 | 8,640 | (1,044 | ) | (18 | ) | 7,578 | ||||
Cash received from Xuntong | (8,499 | ) | — | — | (8,499 | ) | ||||
Service fee charged by Jiuzhou Changxiang | — | (1,614 | ) | — | (1,614 | ) | ||||
Service fee paid to Jiuzhou Changxiang | — | 1,814 | — | 1,814 | ||||||
Balance as of December 31, 2013 | 141 | (844 | ) | (18 | ) | (721 | ) | |||
Balance as of December 31, 2013 (US$’000) | 23 | (139 | ) | (3 | ) | (119 | ) |
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
DISCONTINUED OPERATIONS | ' | |||
Schedule of breakdown of assets and liabilities attributed to discontinued operations | ' | |||
December 26, | ||||
2011 | ||||
RMB’ 000 | ||||
Current assets | 63,182 | |||
Property and equipment, net | 5 | |||
Intangible assets | 19 | |||
Goodwill | 16,989 | |||
Total assets | 80,195 | |||
Current liabilities | (48,737 | ) | ||
Deferred tax liabilities | (5 | ) | ||
Total liabilities derecognized | (48,742 | ) | ||
Total net assets (Note 4(b)) | 31,453 |
EARNINGS_LOSS_PER_SHARE_Tables
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
EARNINGS (LOSS) PER SHARE | ' | |||||||||
Schedule of basic and diluted earnings (loss) per share | ' | |||||||||
For the Year Ended | ||||||||||
December 31, | ||||||||||
2011 | 2012 | 2013 | ||||||||
(RMB’000) | (RMB’000) | (RMB’000) | (US$’000) | |||||||
Numerator: | ||||||||||
Net loss from continuing operations | (11,514 | ) | (16,991 | ) | (34,229 | ) | (5,654 | ) | ||
Income from discontinued operations | 31,977 | — | — | — | ||||||
Net income (loss) attributable to ordinary shareholders: | 20,463 | (16,991 | ) | (34,229 | ) | (5,654 | ) | |||
Denominator: | ||||||||||
Number of shares outstanding, opening | 385,843,484 | 364,813,932 | 362,102,972 | 362,102,972 | ||||||
Weighted average number of shares issued | 3,063,940 | 136,676 | 813,568 | 813,568 | ||||||
Weighted average number of shares repurchased | (6,922,907 | ) | (1,169,733 | ) | — | — | ||||
Weighted-average number of shares outstanding – Basic | 381,984,517 | 363,780,875 | 362,916,540 | 362,916,540 | ||||||
Weighted-average number of shares outstanding – Diluted | 381,984,517 | 363,780,875 | 362,916,540 | 362,916,540 | ||||||
Earnings (loss) per share-Basic | ||||||||||
- Net loss from continuing operations | (0.03 | ) | (0.05 | ) | (0.09 | ) | (0.01 | ) | ||
- Income from discontinued operations: | 0.08 | — | — | — | ||||||
0.05 | (0.05 | ) | (0.09 | ) | (0.01 | ) | ||||
Earnings (loss) per share-Diluted | ||||||||||
- Net loss from continuing operations | (0.03 | ) | (0.05 | ) | (0.09 | ) | (0.01 | ) | ||
-Income from discontinued operations: | 0.08 | — | — | — | ||||||
0.05 | (0.05 | ) | (0.09 | ) | (0.01 | ) |
FAIR_VALUE_MEASUREMENT_Tables
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
FAIR VALUE MEASUREMENT | ' | |||
Schedule of reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs | ' | |||
Investment in the Investee A | ||||
RMB’000 | ||||
Fair value at January 1, 2012 | — | |||
Investment during 2012 | 1,259 | |||
Changes in fair value | 457 | |||
Transfers in and/or out of Level 3 | — | |||
Fair value at December 31, 2012 | 1,716 | |||
Changes in fair value* | (1,716 | ) | ||
Transfers in and/or out of Level 3 | ||||
Fair value at December 31, 2013 | — | |||
Fair value at December 31, 2013 (US$’000) | — | |||
* The Company has written off the investment in Investee A, given the decline in value is other-than-temporary. | ||||
Investment in the Investee B | ||||
RMB’000 | ||||
Fair value at January 1, 2013 | — | |||
Investment during 2013 | 12,240 | |||
Changes in fair value | — | |||
Transfers in and/or out of Level 3 | — | |||
Fair value at December 31, 2013 | 12,240 | |||
Fair value at December 31, 2013 (US$’000) | 2,022 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | |||||
Dec. 31, 2013 | ||||||
COMMITMENTS AND CONTINGENCIES | ' | |||||
Schedule of future minimum lease payments under non-cancelable operating leases | ' | |||||
December 31, 2013 | ||||||
RMB’000 | US$’000 | |||||
2014 | 19,342 | 3,195 | ||||
2015 | 18,089 | 2,988 | ||||
2016 | 16,497 | 2,725 | ||||
2017 | 6,703 | 1,108 | ||||
2018 | — | — | ||||
60,631 | 10,016 |
CONDENSED_FINANCIAL_INFORMATIO1
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | ' | |||||||||||
Schedule of condensed balance sheets | ' | |||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | ||||||||||||
As of December 31, | ||||||||||||
Note | 2012 | 2013 | ||||||||||
RMB | RMB | US$ | ||||||||||
ASSETS: | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 164,024 | 117,626 | 19,431 | |||||||||
Restricted cash | 12 | — | 60,000 | 9,911 | ||||||||
Prepaid expenses and other current assets | 2,673 | 9,477 | 1,568 | |||||||||
Available-for-sale investments | 11 | — | 24,636 | 4,070 | ||||||||
Total current assets | 166,697 | 211,739 | 34,980 | |||||||||
Non-current assets: | ||||||||||||
Property and equipment, net | 11,466 | 8,359 | 1,381 | |||||||||
Long term investments | 10 | 9,033 | 13,847 | 2,287 | ||||||||
Available-for-sale investments | 11 | 82,292 | — | — | ||||||||
Investments in subsidiaries | 393,371 | 423,804 | 70,008 | |||||||||
Total non-current assets | 496,162 | 446,010 | 73,676 | |||||||||
TOTAL ASSETS | 662,859 | 657,749 | 108,656 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: | ||||||||||||
Current liabilities: | ||||||||||||
Accrued expenses and other payables | 970 | 4,616 | 763 | |||||||||
Total current liabilities | 970 | 4,616 | 763 | |||||||||
Total liabilities | 970 | 4,616 | 763 | |||||||||
As of December 31, | ||||||||||||
Note | 2012 | 2013 | ||||||||||
RMB | RMB | US$ | ||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: (CONTINUED) | ||||||||||||
Shareholders’ equity: | ||||||||||||
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 374,464,476 and 374,464,476 shares issued and outstanding as of December 31, 2012 and 2013, respectively) | 275 | 282 | 47 | |||||||||
Additional paid-in capital | 1,220,198 | 1,247,730 | 206,110 | |||||||||
Treasury stock | (73,101 | ) | (73,101 | ) | (12,075 | ) | ||||||
Statutory reserves | 1,326 | 1,326 | 219 | |||||||||
Accumulated deficit | (490,032 | ) | (524,261 | ) | (86,601 | ) | ||||||
Accumulated other comprehensive income | 16 | 3,223 | 1,157 | 193 | ||||||||
Total shareholders’ equity | 661,889 | 653,133 | 107,893 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 662,859 | 657,749 | 108,656 | |||||||||
Schedule of condensed statements of comprehensive income (loss) | ' | |||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | ||||||||||||
For the years ended December 31, | ||||||||||||
Note | 2011 | 2012 | 2013 | |||||||||
RMB | RMB | RMB | US$ | |||||||||
General and administrative expenses | (13,555 | ) | (9,210 | ) | (14,072 | ) | (2,325 | ) | ||||
Impairment of an available-for-sale investment | 11(b) | — | — | (1,217 | ) | (201 | ) | |||||
Post-acquisition settlement consideration | 4(a) | (7,158 | ) | — | — | — | ||||||
Operating loss | (20,713 | ) | (9,210 | ) | (15,289 | ) | (2,526 | ) | ||||
Interest income | 47 | 657 | 1,075 | 178 | ||||||||
Other income | — | 680 | 6 | 1 | ||||||||
Foreign exchange loss | (6,967 | ) | (2,437 | ) | (6,608 | ) | (1,092 | ) | ||||
Equity in income of subsidiaries | 16,119 | (6,681 | ) | (13,413 | ) | (2,215 | ) | |||||
Loss from continuing operations before income taxes | (11,514 | ) | (16,991 | ) | (34,229 | ) | (5,654 | ) | ||||
Net loss from continuing operations | (11,514 | ) | (16,991 | ) | (34,229 | ) | (5,654 | ) | ||||
Income from discontinued operations | 22 | 31,977 | — | — | — | |||||||
Net income/ (loss) | 20,463 | (16,991 | ) | (34,229 | ) | (5,654 | ) | |||||
Foreign currency translation | 773 | 29 | (1,975 | ) | (326 | ) | ||||||
Unrealized gain from available-for-sale investments | 90 | 1,594 | 1,821 | 301 | ||||||||
Amounts reclassified from accumulated other comprehensive income | 11 | — | (224 | ) | (1,912 | ) | (316 | ) | ||||
Total other comprehensive income, net of tax | 863 | 1,399 | (2,066 | ) | (341 | ) | ||||||
Comprehensive income/ (loss) | 21,326 | (15,592 | ) | (36,295 | ) | (5,995 | ) | |||||
Schedule of condensed statements of cash flows | ' | |||||||||||
(Amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)) | ||||||||||||
For the years ended December 31, | ||||||||||||
2011 | 2012 | 2013 | ||||||||||
RMB | RMB | RMB | US$ | |||||||||
Net cash used in operating activities | (63,412 | ) | (108,007 | ) | (40,370 | ) | (6,669 | ) | ||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (7,779 | ) | (5,716 | ) | — | — | ||||||
Deconsolidation of a consolidated VIE | (2,204 | ) | — | — | — | |||||||
Cash paid pursuant to post-acquisition settlement consideration agreement | (4,286 | ) | — | — | — | |||||||
Cash paid for available-for-sale investments | (99,190 | ) | — | — | — | |||||||
Cash paid for available-for-sale investment on behalf of a subsidiary | — | — | (12,240 | ) | (2,022 | ) | ||||||
Cash paid for long term investment (Note 10) | (6,033 | ) | (3,000 | ) | (4,815 | ) | (795 | ) | ||||
Cash received from sale of available-for-sale investments (Note 11) | — | 18,582 | 57,260 | 9,459 | ||||||||
Net cash used in investing activities | (119,492 | ) | 9,866 | 40,205 | 6,642 | |||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from employee share options exercised | 4,019 | 3,351 | 15,683 | 2,591 | ||||||||
Cash guaranteed as restricted cash | — | — | (60,000 | ) | (9,911 | ) | ||||||
Payment for repurchase of ordinary shares | (63,631 | ) | (9,463 | ) | — | — | ||||||
Payment of dividend | — | (130 | ) | — | — | |||||||
Net cash used in financing activities | (59,612 | ) | (6,242 | ) | (44,317 | ) | (7,320 | ) | ||||
Net decrease in cash and cash equivalents | (242,516 | ) | (104,383 | ) | (44,482 | ) | (7,347 | ) | ||||
Cash and cash equivalents at beginning of the year | 519,221 | 269,859 | 164,024 | 27,095 | ||||||||
Effect of foreign exchange rate changes on cash | (6,846 | ) | (1,452 | ) | (1,916 | ) | (317 | ) | ||||
Cash and cash equivalents at end of the year | 269,859 | 164,024 | 117,626 | 19,431 | ||||||||
(a) Basis of presentation | ||||||||||||
The condensed financial information of the Company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the Company used the equity method to account for investment in its subsidiaries and VIEs. The Company records its investment in its subsidiaries and VIEs under the equity method of accounting. Such investment is presented on the balance sheets as “Investment in subsidiaries” and share of their income as “Equity in income of subsidiaries” on the statements of comprehensive income (loss). The PRC subsidiary and VIEs have restrictions on their ability to pay dividends to the Company under PRC laws and regulations (Note 21). The subsidiaries and VIEs did not pay any dividends to the Company for the years presented. | ||||||||||||
Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted by reference to the consolidated financial statements. | ||||||||||||
(b) Commitments | ||||||||||||
The Company does not have a significant commitments or long-term obligations as of any of the periods presented. |
ORGANIZATION_Details
ORGANIZATION (Details) (CNY) | 1 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||||||
31-May-10 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 23, 2005 | Sep. 30, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 12, 2007 | Jun. 29, 2005 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
item | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | Beijing Jingtian | Beijing Jingtian | CCH | CCH | HCI | ChinaCache Beijing | ChinaCache Beijing | ChinaCache North America Inc. ("ChinaCache US") | ChinaCache Ireland Limited ("ChinaCache IE") | ChinaCache Networks Hong Kong Ltd. ("ChinaCache HK") | JNet Holdings Limited ("JNet Holdings") | ChinaCache Xin Run Technology (Beijing) Co., Ltd. ("Xin Run") | Metasequoia Investment Inc. ("Metasequoia") | |
employee | Exclusive Option Agreement | Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement | Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement | Exclusive technical support and service agreement/Exclusive technical consultation and training agreement/Equipment leasing agreement | Loan Agreement | employee | Exclusive Business Cooperative Agreement | Kou Xiaohong | Beijing Jingtian | |||||||||||
agreement | Loan Agreement | |||||||||||||||||||
Organization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership in the Company owned by the parent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 99.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership interest in the company transferred by CCH to HCI | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership interest held by related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
Number of employees who held equity interest in variable interest entity | ' | 2 | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable interest entity agreement term | ' | ' | '10 years | '5 years | ' | ' | '10 years | ' | '10 years | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' |
Variable interest entity renewed additional term | ' | ' | '10 years | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Service fees charged on percentage of net income | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of agreements with VIEs | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan facility provided to the Nominee Shareholders of the variable interest entity | ' | ' | ' | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | 8,500,000 | ' | ' | ' | ' | ' | ' |
Primary beneficiary of number of VIEs | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
ORGANIZATION_Details_2
ORGANIZATION (Details 2) | 12 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | CNY | CNY | CNY | USD ($) | CNY | VIEs | VIEs | VIEs | VIEs | |
USD ($) | CNY | CNY | CNY | |||||||
Organization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Pledge or collateralization of assets | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Current assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | 55,849,000 | 338,092,000 | 317,137,000 | 392,535,000 | 52,387,000 | 592,706,000 | 12,786,000 | 77,400,000 | 69,503,000 | ' |
Accounts receivable (net of allowance for doubtful accounts of RMB 24,369 and RMB 11,894 (US$1,965) as of December 31, 2012 and 2013, respectively) | 50,587,000 | 306,237,000 | 230,199,000 | ' | ' | ' | 49,217,000 | 297,947,000 | 219,324,000 | ' |
Accounts receivable, allowance for doubtful accounts (in CNY and dollars) | 1,965,000 | 11,894,000 | 25,545,000 | 2,809,000 | 4,220,000 | ' | 1,965,000 | 11,894,000 | 24,369,000 | ' |
Prepaid expenses and other current assets | 8,351,000 | 50,549,000 | 31,240,000 | ' | ' | ' | 4,274,000 | 25,871,000 | 23,393,000 | ' |
Deferred tax assets | 1,172,000 | 7,096,000 | 13,626,000 | ' | ' | ' | 1,081,000 | 6,546,000 | 12,878,000 | ' |
Amounts due from inter-companies | ' | ' | ' | ' | ' | ' | 1,041,000 | 6,300,000 | ' | ' |
Amounts due from a related party | 23,000 | 141,000 | 8,640,000 | ' | ' | ' | 23,000 | 141,000 | ' | ' |
Total current assets | 129,963,000 | 786,751,000 | 600,842,000 | ' | ' | ' | 68,422,000 | 414,205,000 | 325,098,000 | ' |
Non-current assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | ' | ' | ' | ' | ' | ' | 30,577,000 | 185,107,000 | 123,877,000 | ' |
Cloud infrastructure construction in progress | 2,021,000 | 12,236,000 | ' | ' | ' | ' | 942,000 | 5,705,000 | ' | ' |
Intangible assets, net | 919,000 | 5,563,000 | 3,368,000 | ' | ' | ' | 777,000 | 4,702,000 | ' | ' |
Long term investments | 3,543,000 | 21,450,000 | 15,136,000 | ' | ' | ' | 1,256,000 | 7,603,000 | 6,103,000 | ' |
Deferred tax assets | 284,000 | 1,719,000 | 6,166,000 | ' | ' | ' | 99,000 | 602,000 | 4,602,000 | ' |
Long term deposits and other non-current assets | 5,919,000 | 35,829,000 | 13,847,000 | ' | ' | ' | 736,000 | 4,458,000 | 3,676,000 | ' |
Total non-current assets | 62,841,000 | 380,417,000 | 300,048,000 | ' | ' | ' | 34,387,000 | 208,177,000 | 138,258,000 | ' |
TOTAL ASSETS | ' | ' | ' | ' | ' | ' | 102,809,000 | 622,382,000 | 463,356,000 | ' |
Current liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable | 33,657,000 | 203,750,000 | 106,399,000 | ' | ' | ' | 33,117,000 | 200,483,000 | 103,261,000 | ' |
Accrued employee benefits | 7,255,000 | 43,922,000 | 36,084,000 | ' | ' | ' | 5,525,000 | 33,448,000 | 26,441,000 | ' |
Accrued expenses and other payables | 25,947,000 | 157,075,000 | 57,773,000 | ' | ' | ' | 11,745,000 | 71,095,000 | 48,776,000 | ' |
Income tax payable | 1,718,000 | 10,399,000 | 22,537,000 | ' | ' | ' | 954,000 | 5,777,000 | 15,200,000 | ' |
Liabilities for uncertain tax positions | 1,906,000 | 11,540,000 | 11,786,000 | ' | ' | ' | 1,040,000 | 6,296,000 | 4,050,000 | ' |
Amounts due to inter-companies | ' | ' | ' | ' | ' | ' | 39,081,000 | 236,584,000 | 208,743,000 | ' |
Amounts due to related parties | 142,000 | 862,000 | 1,062,000 | ' | ' | ' | 139,000 | 844,000 | 1,044,000 | ' |
Deferred government grant | 4,024,000 | 24,360,000 | ' | ' | ' | ' | 4,024,000 | 24,360,000 | ' | ' |
Total current liabilities | 84,560,000 | 511,908,000 | 235,641,000 | ' | ' | ' | 95,625,000 | 578,887,000 | 407,515,000 | ' |
Non-current liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred government grant | 4,024,000 | 24,360,000 | 3,360,000 | ' | ' | ' | ' | ' | 3,360,000 | ' |
Total non-current liabilities | 351,000 | 2,127,000 | 3,360,000 | ' | ' | ' | ' | ' | 3,360,000 | ' |
Total liabilities | ' | ' | ' | ' | ' | ' | 95,625,000 | 578,887,000 | 410,875,000 | ' |
Net revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
-Third party customers | 182,243,000 | 1,103,243,000 | 801,189,000 | 618,422,000 | ' | ' | 150,446,000 | 910,757,000 | 745,835,000 | 600,203,000 |
-Inter-companies | ' | ' | ' | ' | ' | ' | 24,223,000 | 146,640,000 | 12,588,000 | 2,353,000 |
-A related party customer | ' | ' | 12,543,000 | ' | ' | ' | ' | ' | 12,543,000 | ' |
Net profit/ (loss) | -5,654,000 | -34,229,000 | -16,991,000 | 20,463,000 | ' | ' | -2,108,000 | -12,761,000 | 20,406,000 | 43,723,000 |
Income from discontinued operations (including gain on disposal of Shanghai JNet) | ' | ' | ' | 31,977,000 | ' | ' | ' | ' | ' | 31,977,000 |
Net cash provided by operating activities | 20,060,000 | 121,437,000 | 31,898,000 | 58,666,000 | ' | ' | 16,114,000 | 97,554,000 | 51,059,000 | 94,710,000 |
Net cash used in investing activities | ($18,645,000) | -112,872,000 | -99,602,000 | -192,379,000 | ' | ' | ($14,810,000) | -89,657,000 | -49,933,000 | -73,873,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Convenience translation | ' |
Noon buying rate (in CNY per dollar) | 6.0537 |
Optical Fibers | ' |
Property and equipment | ' |
Estimated useful lives of the assets | '20 years |
Computer equipment | Minimum | ' |
Property and equipment | ' |
Estimated useful lives of the assets | '3 years |
Computer equipment | Maximum | ' |
Property and equipment | ' |
Estimated useful lives of the assets | '5 years |
Furniture, fixtures and office equipment | ' |
Property and equipment | ' |
Estimated useful lives of the assets | '5 years |
Motor vehicles | ' |
Property and equipment | ' |
Estimated useful lives of the assets | '10 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (Purchased software) | 12 Months Ended |
Dec. 31, 2013 | |
Purchased software | ' |
Intangible assets | ' |
Estimated useful life | '5 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | CNY | CNY | CNY | ||
segment | indicator | indicator | |||
class | segment | ||||
indicator | |||||
Impairment of long-lived assets and intangible assets | ' | ' | ' | ' | ' |
Number of indicators of impairment for long-lived assets | ' | 0 | 0 | 0 | ' |
Investments | ' | ' | ' | ' | ' |
Impairment of an available for sales | ' | $201,000 | 1,217,000 | 0 | 0 |
Revenue recognition | ' | ' | ' | ' | ' |
Number of class of services portfolio of content and application delivery to total solutions provided within | ' | 1 | 1 | ' | ' |
Term of master service agreement | ' | '1 year | '1 year | ' | ' |
Term of renewal option of master service agreement | ' | '1 year | '1 year | ' | ' |
Revenue recognition | ' | ' | ' | ' | ' |
Business tax expenses and related surcharges | ' | 3,949,000 | 23,906,000 | 26,377,000 | 24,215,000 |
Value-added tax | 6.00% | ' | ' | ' | ' |
Business tax rate (as a percent) | 5.00% | ' | ' | ' | ' |
Advertising expenditures | ' | ' | ' | ' | ' |
Advertising expenditures, included in sales and marketing expenses | ' | 13,000 | 81,000 | 2,196,000 | 3,159,000 |
Government grants | ' | ' | ' | ' | ' |
Unrestricted grant received | ' | 170,000 | 1,031,000 | 1,262,000 | 0 |
Share-based compensation | ' | ' | ' | ' | ' |
Estimated forfeiture rate for management group and the non-management group | ' | 0.00% | 0.00% | 0.00% | 0.00% |
Segment reporting | ' | ' | ' | ' | ' |
Number of reportable segment | ' | 1 | 1 | ' | ' |
Number of geographical segments | ' | 0 | 0 | ' | ' |
Employee benefits | ' | ' | ' | ' | ' |
Employee benefits incurred under defined contribution plans | ' | $6,778,000 | 41,036,000 | 22,064,000 | 12,939,000 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||
Dec. 31, 2012 | Dec. 31, 2011 | Jun. 13, 2012 | Jun. 13, 2011 | Dec. 31, 2011 | Dec. 31, 2011 | 18-May-12 | Dec. 31, 2012 | Dec. 31, 2012 | |
CNY | CNY | ADS | ADS | ADS | ADS | ADS | ADS | ADS | |
2011 Share Repurchase Plan | 2011 Share Repurchase Plan | 2011 Share Repurchase Plan | 2011 Share Repurchase Plan | 2012 Share Repurchase Plan | 2012 Share Repurchase Plan | 2012 Share Repurchase Plan | |||
USD ($) | USD ($) | CNY | USD ($) | USD ($) | CNY | ||||
Share Repurchase Program | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repurchases authorized | ' | ' | $10,000,000 | ' | ' | ' | $10,000,000 | ' | ' |
Period within which ADSs were to be repurchased | ' | ' | ' | '12 months | ' | ' | ' | ' | ' |
Number of shares repurchased | ' | ' | ' | ' | 1,641,311 | 1,641,311 | ' | 319,827 | 319,827 |
Shares repurchased, value | 9,470,000 | 63,631,000 | ' | ' | $10,000,000 | 63,631,000 | ' | $1,520,000 | 9,470,000 |
CONCENTRATION_OF_RISK_Details
CONCENTRATION OF RISK (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Credit risk | Credit risk | Credit risk | Credit risk | Credit risk | Credit risk | Credit risk | Credit risk | Credit risk | Credit risk | Credit risk | Credit risk | Supplier risk | Supplier risk | Supplier risk | Supplier risk | |
PRC | PRC | PRC | Hong Kong Special Administration Region | Hong Kong Special Administration Region | Hong Kong Special Administration Region | United States of America | United States of America | United States of America | Europe | Europe | Europe | Costs of bandwidth resources | Costs of bandwidth resources | Costs of bandwidth resources | Costs of bandwidth resources | |
USD ($) | CNY | CNY | USD ($) | CNY | CNY | USD ($) | CNY | CNY | USD ($) | CNY | CNY | item | Two major PRC telecom carriers | Two major PRC telecom carriers | Two major PRC telecom carriers | |
CONCENTRATION OF RISK | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amounts deposited with major financial institutions | $28,585,000 | 173,048,000 | 137,778,000 | $19,436,000 | 117,657,000 | 56,609,000 | $7,828,000 | 47,387,000 | 15,319,000 | $0 | 0 | 107,416,000 | ' | ' | ' | ' |
Percentage of concentration risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 94.00% | 94.00% | 97.00% |
Number of major PRC telecom carriers | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' |
CONCENTRATION_OF_RISK_Details_
CONCENTRATION OF RISK (Details 2) | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 |
USD ($) | CNY | CNY | CNY | Revenues | Revenues | Revenues | Revenues | Revenues | Revenues | Revenues | Revenues | Revenues | Revenues | Revenues | Accounts receivables | Accounts receivables | Accounts receivables | Accounts receivables | Accounts receivables | Accounts receivables | Accounts receivables | Accounts receivables | |
Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | Customer risk | |||||
Customer A | Customer A | Customer A | Customer A | Customer B | Customer B | Equal to or more than | Equal to or more than | Equal to or more than | Not greater than | Not greater than | Customer A | Customer A | Customer A | Customer C | Customer C | Equal to or more than | Equal to or more than | Not greater than | |||||
USD ($) | CNY | CNY | CNY | USD ($) | CNY | Customer B | Customer B | USD ($) | CNY | CNY | USD ($) | CNY | Customer B | ||||||||||
CONCENTRATION OF RISK | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold for disclosure of risk (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 10.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | 10.00% | 10.00% | ' |
Total revenues | $182,243 | 1,103,243 | 813,732 | 618,422 | $18,549 | 112,292 | 82,663 | 98,684 | $26,562 | 160,582 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable | $50,587 | 306,237 | 230,199 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,431 | 44,987 | 46,324 | $5,380 | 32,571 | ' | ' | ' |
Concentration risk (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | 10.00% |
Minimum period for which the PRC government has been pursuing economic reform policies | '20 years | '20 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of appreciation of the RMB against US$ | 2.80% | 2.80% | 1.00% | 4.60% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
CONSOLIDATION_DECONSOLIDATION_2
CONSOLIDATION (DECONSOLIDATION) OF SHANGHAI JNET (Details) | 12 Months Ended | |||||||
Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2010 | Jan. 28, 2010 | Jan. 28, 2010 | Dec. 31, 2009 | |
CNY | JNet Group | JNet Group | JNet Group | JNet Group | JNet Group | JNet Group | JNet Group | |
USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | ||
Post-acquisition settlement consideration | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding cash consideration | ' | ' | ' | ' | ' | ' | ' | 59,018,000 |
Loan receivables due from the sellers | ' | ' | ' | ' | ' | ' | ' | 65,590,000 |
Amount forgiven | ' | ' | ' | ' | ' | ' | ' | 6,588,000 |
Additional other consideration payable | ' | ' | ' | ' | ' | 1,000,000 | 6,829,000 | ' |
Percentage of audited pre-tax income earned each year from 2010 to 2012 payable on a quarterly basis to the sellers | ' | 100.00% | 100.00% | ' | ' | ' | ' | ' |
Maximum offering price per share up to which additional ordinary shares are issuable (in dollars per share) | ' | $1.03 | ' | ' | ' | ' | ' | ' |
Period subsequent to the acquisition date after which terms of the supplementary agreement were negotiated and finalized | ' | '24 months | '24 months | ' | ' | ' | ' | ' |
Additional charge as a result of the issuance of ordinary shares to the sellers | ' | 901,000 | 6,027,000 | ' | ' | ' | ' | ' |
Ordinary shares issued to the sellers | ' | 1,030,215 | 1,030,215 | ' | ' | ' | ' | ' |
Initial public offering price (in dollars per share) | ' | $0.87 | ' | ' | ' | ' | ' | ' |
Post-acquisition settlement consideration expense | 7,158,000 | ' | ' | 7,158,000 | 37,858,000 | ' | ' | ' |
CONSOLIDATION_DECONSOLIDATION_3
CONSOLIDATION (DECONSOLIDATION) OF SHANGHAI JNET (Details 2) | 12 Months Ended | 0 Months Ended | |
Dec. 31, 2011 | Dec. 26, 2011 | Dec. 26, 2011 | |
CNY | Shanghai JNet | Shanghai JNet | |
CNY | USD ($) | ||
Deconsolidation of Shanghai Jnet | ' | ' | ' |
Waiver of outstanding loan receivable balances from sellers | ' | 48,654,000 | ' |
Waiver of remaining acquisition consideration by sellers | ' | ' | 7,075,000 |
Waiver of post-acquisition settlement consideration by sellers | ' | ' | 2,803,000 |
Gain on deconsolidation | 30,716,000 | 30,716,000 | ' |
Gain on deconsolidation | ' | ' | ' |
Disposition of net assets | ' | -31,453,000 | ' |
Waiver of acquisition consideration and post-acquisition settlement consideration | ' | 62,169,000 | ' |
Gain on deconsolidation | 30,716,000 | 30,716,000 | ' |
ACCOUNTS_RECEIVABLE_NET_Detail
ACCOUNTS RECEIVABLE, NET (Details) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | |
Accounts receivable and allowance for doubtful accounts | ' | ' | ' | ' |
Accounts receivable | $52,552 | 318,131 | 255,744 | ' |
Less: allowance for doubtful accounts | -1,965 | -11,894 | -25,545 | -2,809 |
Accounts receivable, net | 50,587 | 306,237 | 230,199 | ' |
Analysis of the allowance for doubtful accounts | ' | ' | ' | ' |
Balance, beginning of year | 4,220 | 25,545 | 2,809 | ' |
Additions for the current year | 3,918 | 23,722 | 22,736 | 2,786 |
Deductions for the current year - Recovery | -17 | -103 | -32 | ' |
Deductions for the current year - Written off | -6,170 | -37,352 | ' | ' |
Balance, end of year | $1,965 | 11,894 | 25,545 | 2,809 |
PREPAID_EXPENSES_AND_OTHER_CUR2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY |
Prepaid expenses and other current assets | ' | ' | ' |
Prepaid expense for bandwidth and servers | $2,052 | 12,419 | 17,147 |
Prepaid marketing and consulting fee in connection with the Cloud infrastructure | 1,239 | 7,500 | ' |
Income tax receivable | 758 | 4,590 | ' |
Staff field advances | 425 | 2,570 | 1,444 |
Other deposit and receivables | 3,877 | 23,470 | 12,649 |
Total | $8,351 | 50,549 | 31,240 |
PROPERTY_AND_EQUIPMENT_NET_Det
PROPERTY AND EQUIPMENT, NET (Details) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | CNY | CNY | CNY | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Company excluding Shanghai JNet | Optical fibers | Optical fibers | Optical fibers | Computer equipment | Computer equipment | Computer equipment | Furniture and fixtures | Furniture and fixtures | Furniture and fixtures | Leasehold improvements | Leasehold improvements | Leasehold improvements | Motor vehicles | Motor vehicles | Motor vehicles | |
USD ($) | CNY | CNY | CNY | Cost of revenue | Cost of revenue | Cost of revenue | Cost of revenue | Sales and marketing expenses | Sales and marketing expenses | Sales and marketing expenses | Sales and marketing expenses | General and administrative expenses | General and administrative expenses | General and administrative expenses | General and administrative expenses | Research and development expenses | Research and development expenses | Research and development expenses | Research and development expenses | USD ($) | CNY | CNY | USD ($) | CNY | CNY | USD ($) | CNY | CNY | USD ($) | CNY | CNY | USD ($) | CNY | CNY | |||||
USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | ||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, at cost | $92,897,000 | 562,364,000 | 465,151,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,164,000 | 13,100,000 | 13,100,000 | $84,918,000 | 514,059,000 | 424,808,000 | $1,517,000 | 9,185,000 | 7,538,000 | $3,258,000 | 19,725,000 | 15,499,000 | $1,040,000 | 6,295,000 | 4,206,000 |
Less: accumulated depreciation | -53,135,000 | -321,662,000 | -285,860,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Less: accumulated impairment | -9,000 | -52,000 | -52,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | 39,753,000 | 240,650,000 | 179,239,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation expenses | $9,891,000 | 59,876,000 | 59,890,000 | 67,351,000 | $9,891,000 | 59,876,000 | 59,890,000 | 67,345,000 | $7,529,000 | 45,581,000 | 51,911,000 | 63,318,000 | $46,000 | 280,000 | 712,000 | 855,000 | $943,000 | 5,706,000 | 1,171,000 | 1,073,000 | $1,373,000 | 8,309,000 | 6,096,000 | 2,099,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
PROPERTY_AND_EQUIPMENT_NET_Det1
PROPERTY AND EQUIPMENT, NET (Details 2) | 12 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | |
USD ($) | CNY | CNY | CNY | Optical Fibers | Optical Fibers | Optical Fibers | Computer equipment | |
USD ($) | CNY | CNY | CNY | |||||
PROPERTY AND EQUIPMENT, NET | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment held under capital leases, gross | $2,164,000 | 13,100,000 | 60,343,000 | ' | $2,164,000 | 13,100,000 | 13,100,000 | 47,243,000 |
Less: accumulated depreciation | -640,000 | -3,875,000 | -39,662,000 | ' | ' | ' | ' | ' |
Property and equipment held under capital leases, net | 1,524,000 | 9,225,000 | 20,681,000 | ' | ' | ' | ' | ' |
Depreciation of property and equipment held under capital leases | $108,000 | 655,000 | 8,219,000 | 8,988,000 | ' | ' | ' | ' |
INTANGIBLE_ASSETS_Details
INTANGIBLE ASSETS (Details) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | CNY | CNY | Purchased software | Purchased software | Purchased software | |
USD ($) | CNY | CNY | ||||
Changes in acquired intangible assets | ' | ' | ' | ' | ' | ' |
Intangible assets at the beginning | ' | ' | ' | $556,000 | 3,368,000 | ' |
Addition | ' | ' | ' | 519,000 | 3,139,000 | 3,368,000 |
Less: amortization | -313,000 | -1,892,000 | -536,000 | -156,000 | -944,000 | ' |
Intangible assets at the end | ' | ' | ' | 919,000 | 5,563,000 | 3,368,000 |
Estimated annual amortization expense for each of the five succeeding fiscal years | ' | ' | ' | ' | ' | ' |
2014 | 215,000 | 1,301,000 | ' | ' | ' | ' |
2015 | 215,000 | 1,301,000 | ' | ' | ' | ' |
2016 | 215,000 | 1,301,000 | ' | ' | ' | ' |
2017 | 215,000 | 1,301,000 | ' | ' | ' | ' |
2018 | $59,000 | 359,000 | ' | ' | ' | ' |
LAND_USE_RIGHT_CLOUD_INFRASTRU2
LAND USE RIGHT / CLOUD INFRASTRUCTURE CONSTRUCTION IN PROGRESS (Details) | 12 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | CNY | CNY | CNY | Land use right | Land use right | Land use right | Land use right | |
USD ($) | CNY | CNY | CNY | |||||
sqm | ||||||||
Land use right | ' | ' | ' | ' | ' | ' | ' | ' |
Land use right, gross | ' | ' | ' | ' | $8,537,000 | 51,678,000 | ' | ' |
Less: accumulated amortization | ' | ' | ' | ' | -157,000 | -948,000 | ' | ' |
Land use right, net | ' | ' | ' | ' | 8,380,000 | 50,730,000 | ' | ' |
Area of asset acquired | ' | ' | ' | ' | 39,000 | 39,000 | ' | ' |
Useful life | ' | ' | ' | ' | '50 years | '50 years | ' | ' |
Amortization expense | 313,000 | 1,892,000 | ' | 536,000 | 157,000 | 948,000 | 0 | 0 |
Costs capitalized | $2,021,000 | 12,236,000 | 0 | ' | ' | ' | ' | ' |
LONG_TERM_INVESTMENTS_Details
LONG TERM INVESTMENTS (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 |
USD ($) | CNY | CNY | PRC Fund | PRC Fund | PRC Fund | PRC Fund | United States Fund | United States Fund | United States Fund | United States Fund | Maximum | |
indicator | USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | ||||
LONG TERM INVESTMENTS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long term investments | $3,543,000 | 21,450,000 | 15,136,000 | $1,256,000 | 7,603,000 | 6,103,000 | ' | $2,287,000 | 13,847,000 | 9,033,000 | ' | ' |
Additions to investment | ' | ' | ' | $247,782 | 1,500,000 | 3,000,000 | 3,103,000 | $795,000 | 4,814,000 | 3,000,000 | 6,033,000 | ' |
Percentage of interest held in fund | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% |
Number of indicators of impairment of investment | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
AVAILABLEFORSALE_INVESTMENTS_D
AVAILABLE-FOR-SALE INVESTMENTS (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | Mutual fund | Mutual fund | Mutual fund | Series A preferred shares of unlisted companies | Series A preferred shares of unlisted companies | Series A preferred shares of unlisted companies | |
USD ($) | CNY | CNY | USD ($) | CNY | CNY | ||||
AVAILABLE-FOR-SALE INVESTMENTS | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short-term available-for-sale investments | $4,070,000 | 24,636,000 | ' | $4,070,000 | 24,636,000 | ' | ' | ' | ' |
Long-term available-for-sale investments before accumulated impairment | ' | ' | ' | ' | ' | 80,576,000 | 2,305,000 | 13,956,000 | 1,716,000 |
Less: accumulated impairment | -283,000 | -1,716,000 | ' | ' | ' | ' | ' | ' | ' |
Long-term available-for-sale investments | 2,022,000 | 12,240,000 | 82,292,000 | ' | ' | ' | ' | ' | ' |
Total available-for-sale investments | $6,092,000 | 36,876,000 | 82,292,000 | ' | ' | ' | ' | ' | ' |
AVAILABLEFORSALE_INVESTMENTS_D1
AVAILABLE-FOR-SALE INVESTMENTS (Details 2) | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 04, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 28, 2011 | Apr. 28, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 14, 2013 | Aug. 14, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | CNY | CNY | Mutual fund | Mutual fund | Mutual fund | Mutual fund | Mutual fund | Mutual fund | Mutual fund | Investee A | Investee A | Investee A | Investee A | Investee A | Investee B | Investee B | Investee B | Investee B | |
USD ($) | CNY | CNY | CNY | Level one observable inputs | Level one observable inputs | Level one observable inputs | USD ($) | CNY | USD ($) | CNY | CNY | USD ($) | CNY | CNY | USD ($) | ||||
indicator | indicator | indicator | USD ($) | CNY | CNY | indicator | |||||||||||||
AVAILABLE-FOR-SALE INVESTMENTS | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of units or shares purchased | ' | ' | ' | ' | ' | ' | 9,790.59 | ' | ' | ' | 970,591 | 970,591 | ' | ' | ' | 13,971,428 | 13,971,428 | ' | ' |
Cost of investment | ' | ' | ' | ' | ' | ' | 97,931,000 | ' | ' | ' | $200,000 | 1,259,000 | ' | ' | ' | $2,000,000 | 12,240,000 | ' | ' |
Number of units or shares disposed | ' | ' | ' | 5,583.30 | 5,583.30 | 1,838.04 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Consideration received from sale of available-for-sale investments | 9,459,000 | 57,260,000 | 18,582,000 | 9,459,000 | 57,260,000 | 18,582,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reclassification of accumulated unrealized gains recorded in accumulated other comprehensive income to other income | ' | ' | ' | 233,000 | 1,413,000 | 224,000 | ' | ' | ' | ' | ' | ' | 73,000 | 499,000 | ' | ' | ' | ' | ' |
Fair value of available-for-sale investments | 6,092,000 | 36,876,000 | 82,292,000 | ' | ' | ' | ' | 4,070,000 | 24,636,000 | 80,576,600 | ' | ' | ' | ' | 1,716,000 | ' | ' | 12,240,000 | 2,022,000 |
Change in fair value of mutual fund recorded in other comprehensive income | ' | ' | ' | ' | ' | ' | ' | 15,000 | 93,000 | 1,370,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of indicators of impairment of investment | ' | ' | ' | 0 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 |
Period from the issuance date on or after which the company has the right to request redemption | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '5 years | ' | ' | ' | '5 years | '5 years | ' | ' |
Redemption price as a percentage of original issuance price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120.00% | 120.00% | ' | ' | ' | 120.00% | 120.00% | ' | ' |
Change in fair value of Series A preferred shares of unlisted companies recorded in other comprehensive income | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 457,000 | ' | ' | 0 | ' |
Impairment of available-for-sale investments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $283,000 | 1,716,000 | ' | ' | ' | ' | ' |
SHORTTERM_LOAN_Details
SHORT-TERM LOAN (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Jun. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2013 |
USD ($) | CNY | Short-term loan | Short-term loan | Short-term loan | |
USD ($) | CNY | ||||
subsidiary | subsidiary | ||||
Short-term loan | ' | ' | ' | ' | ' |
Number of subsidiary of the entity that the short-term loan agreement provided working capital to | ' | ' | 1 | 1 | ' |
Commitment of loan amounts | $9,911,000 | 60,000,000 | $10,000,000 | 60,000,000 | ' |
Interest rate (as a percent) | ' | ' | 5.60% | 5.60% | 6.72% |
Maturity term | ' | ' | '6 months | '6 months | ' |
Fixed deposit from Chinacache Holdings pledged to secure the loan | ' | ' | $10,000,000 | 60,000,000 | ' |
ACCRUED_EXPENSES_AND_OTHER_PAY2
ACCRUED EXPENSES AND OTHER PAYABLES (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
USD ($) | CNY | CNY | |
ACCRUED EXPENSES AND OTHER PAYABLES | ' | ' | ' |
Business tax and other tax payables | $1,948,000 | 11,793,000 | 16,276,000 |
Payables for purchase of property and equipment | 6,583,000 | 39,853,000 | 13,224,000 |
Advance from a potential buyer of part of the Cloud infrastructure | 12,389,000 | 75,000,000 | ' |
Advance from customers | 1,995,000 | 12,079,000 | 11,669,000 |
Other accrued expenses | 3,032,000 | 18,350,000 | 16,604,000 |
Total | $25,947,000 | 157,075,000 | 57,773,000 |
DEFERRED_GOVERNMENT_GRANT_Deta
DEFERRED GOVERNMENT GRANT (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | CNY | CNY | |
Deferred government grant | ' | ' | ' |
Beginning | $555,000 | 3,360,000 | ' |
Received | 3,469,000 | 21,000,000 | 3,360,000 |
Ending | 4,024,000 | 24,360,000 | 3,360,000 |
Recognize in one year | $4,024,000 | 24,360,000 | ' |
SHAREBASED_COMPENSATION_Detail
SHARE-BASED COMPENSATION (Details) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 16, 2008 | Aug. 09, 2011 | Feb. 26, 2011 | 28-May-09 | Dec. 31, 2013 | 20-May-10 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jul. 02, 2012 | Dec. 31, 2013 | Mar. 26, 2013 | Mar. 26, 2013 | Jul. 02, 2012 | Dec. 31, 2013 | Jun. 20, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Jan. 02, 2012 | Jan. 02, 2012 | |
Options | Options | Options | Options | Options | Options | Options | Options | Options | 2007 and 2008 Option Plans | 2007 and 2008 Option Plans | 2007 and 2008 Option Plans | 2007 Plan | 2008 Plan | 2008 Plan | 2008 Plan | 2010 Plan | 2010 Plan | 2010 Plan | 2010 Plan | 2010 Plan | 2010 Plan | 2010 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2011 Plan | 2010 Plan and 2011 | 2010 Plan and 2011 | |
Minimum | Minimum | Minimum | Maximum | Maximum | Maximum | Options | Options | Options | Options | Options | Options | Options | Options | Options | Options | Options | Options | Options | Options | Minimum | Maximum | Maximum | Options | Options | Options | Options | Options | Options | Options | Options | Options | Options | Options | ||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | schedule | Vesting schedule one | Vesting schedule two | CNY | employee | schedule | Minimum | Maximum | Vesting schedule one | Vesting schedule two | Vesting schedule three | USD ($) | CNY | schedule | Vesting schedule one | Vesting schedule two | Vesting schedule three | Vesting schedule four | USD ($) | CNY | ||||||||||||
employee | employee | ||||||||||||||||||||||||||||||||||||
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate number of shares that can be purchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,000,000 | ' | ' | 8,600,000 | ' | 9,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 22,000,000 | ' | ' | ' | ' | ' | ' |
Specified percentage of total issued and outstanding ordinary shares which can be issued under the plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Threshold percentage of the unissued ordinary shares reserved in the Award Pool to the total then issued and outstanding ordinary shares, under which the shares reserved in the Award Pool shall be increased automatically | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ordinary shares reserved in the Award Pool to the then issued and outstanding ordinary shares, immediately after automatic increase pursuant to the plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Expiration term of options granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | '9 years | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | '10 years | ' | ' | ' | '8 years | ' | '9 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of different vesting schedules | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' |
Percentage of options vesting on the stated vesting commencement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' |
Percentage of options vesting on the first anniversary of the stated vesting commencement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | 25.00% | 33.00% | ' | ' |
Percentage of options vesting on the second anniversary of the stated vesting commencement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | 33.00% | ' | ' |
Percentage of options vesting on the third anniversary of the stated vesting commencement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | 33.00% | ' | ' |
Percentage of options vesting on the fourth anniversary of the stated vesting commencement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' |
Percentage of options vesting each quarter for the second anniversary of the stated vesting commencement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.25% | ' | ' | ' |
Percentage of options vesting each quarter for the third anniversary of the stated vesting commencement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.25% | ' | ' | ' |
Percentage of options vesting each quarter for the fourth anniversary of the stated vesting commencement date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.25% | ' | ' | ' |
Number of share options authorized for accelerated vesting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | 800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,758,336 | 2,758,336 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation cost reversed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $487,000 | 2,948,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of the award on the modification date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 277,000 | 1,676,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of employees for whom accelerated vesting of share options authorized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net incremental stock-based compensation (in CNY or dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,776,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $501,000 | 3,121,300 |
Exercise price of certain options before modification (in dollars per shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.41 | ' |
Exercise price (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.24 | ' |
Options granted (in shares) | 9,471,008 | 2,130,000 | 25,954,666 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price (in CNY or dollars per share) | ' | ' | ' | $0.24 | $0.24 | $0.24 | $0.41 | $0.41 | $0.41 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options to purchase ordinary shares, outstanding (in shares) | 37,911,574 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of ordinary shares available for future grant | 3,717,467 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
SHAREBASED_COMPENSATION_Detail1
SHARE-BASED COMPENSATION (Details 2) (Options) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jul. 08, 2013 | 21-May-12 | Jun. 20, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | |
USD ($) | CNY | CNY | CNY | Minimum | Minimum | Minimum | Maximum | Maximum | Maximum | Employees | Employees | Employees | Employees | Employees | Employees | Employees | Employees | Employees | Employees | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | USD ($) | CNY | ADS | |||||
USD ($) | ||||||||||||||||||||
Number of options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 36,514,758 | 36,514,758 | 40,285,702 | 40,285,702 | ' | ' | ' |
Granted (in shares) | 9,471,008 | 9,471,008 | 2,130,000 | 25,954,666 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,471,008 | 9,471,008 | 2,130,000 | 2,130,000 | ' | ' | ' |
Exercised (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -11,277,280 | -11,277,280 | -2,406,272 | -2,406,272 | ' | ' | ' |
Forfeited (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,304,912 | -2,304,912 | -3,494,672 | -3,494,672 | ' | ' | ' |
Outstanding at the end of the period (in shares) | 37,911,574 | 37,911,574 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,403,574 | 32,403,574 | 36,514,758 | 36,514,758 | 40,285,702 | 40,285,702 | ' |
Vested and expected to vest at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32,403,574 | 32,403,574 | 36,514,758 | 36,514,758 | ' | ' | ' |
Exercisable at the end of the period (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 17,824,031 | 17,824,031 | 15,410,254 | 15,410,254 | ' | ' | ' |
Weighted average Exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars per shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.22 | ' | $0.33 | ' | ' | ' | ' |
Granted (in dollars per shares) | ' | ' | ' | ' | $0.24 | $0.24 | $0.24 | $0.41 | $0.41 | $0.41 | ' | ' | ' | $0.24 | ' | $0.27 | ' | ' | ' | ' |
Exercised (in dollars per shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.20 | ' | $0.22 | ' | ' | ' | ' |
Forfeited (in dollars per shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.24 | ' | $0.30 | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars per shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.23 | ' | $0.22 | ' | $0.33 | ' | ' |
Vested and expected to vest at the end of the period (in dollars per shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.23 | ' | $0.22 | ' | ' | ' | ' |
Exercisable at the end of the period (in dollars per shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.21 | ' | $0.19 | ' | ' | ' | ' |
Weighted average remaining contractual term (Years) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the begining of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years 9 months 11 days | '6 years 9 months 11 days | '7 years 8 months 12 days | '7 years 8 months 12 days | '8 years 6 months 29 days | '8 years 6 months 29 days | ' |
Vested and expected to vest at the end of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years 9 months 11 days | '6 years 9 months 11 days | '7 years 8 months 12 days | '7 years 8 months 12 days | ' | ' | ' |
Exercisable at the end of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years 1 month 28 days | '7 years 1 month 28 days | '7 years 1 month 28 days | '7 years 1 month 28 days | ' | ' | ' |
Outstanding at the end of the period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 years 9 months 11 days | '6 years 9 months 11 days | '7 years 8 months 12 days | '7 years 8 months 12 days | '8 years 6 months 29 days | '8 years 6 months 29 days | ' |
Aggregate intrinsic value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding at the beginning of the period (in dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $840,000 | ' | $1,035,000 | ' | ' | ' | ' |
Vested and expected to vest at the end of the period (in dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,479,000 | ' | 840,000 | ' | ' | ' | ' |
Exercisable at the end of the period (in dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,211,000 | ' | 840,000 | ' | ' | ' | ' |
Outstanding at the end of the period (in dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,479,000 | ' | 840,000 | ' | 1,035,000 | ' | ' |
Closing price of ordinary shares (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.56 | ' | ' | ' | ' | ' | $8.91 |
Total intrinsic value of stock options exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,560,000 | ' | 440,000 | ' | 3,470,000 | ' | ' |
Share-based compensation expense (in CNY or dollars) | 1,957,000 | 11,852,000 | 16,088,000 | 26,956,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized share-based compensation cost (in CNY or dollars) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,117,000 | 12,818,000 | ' | ' | ' | ' | ' |
Period over which unrecognized share-based compensation cost are expected to be recognized | ' | ' | ' | ' | '3 months | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assumptions used in calculation of estimated fair value of options | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Suboptimal exercise factor | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.8 | 2.2 | 2.2 | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rates (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.66% | 1.73% | 2.21% | ' | ' | ' | ' | ' | ' | ' |
Expected volatility (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 61.26% | 67.50% | 71.20% | ' | ' | ' | ' | ' | ' | ' |
Expected dividend yield (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.00% | 0.00% | 0.00% | ' | ' | ' | ' | ' | ' | ' |
Weighted average fair value of share option (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.14 | $0.17 | $0.24 | ' | ' | ' | ' | ' | ' | ' |
Total fair value of options vested | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $571,301 | 3,458,482 | ' | 2,202,839 | ' | 36,918,136 | ' |
SHAREBASED_COMPENSATION_Detail2
SHARE-BASED COMPENSATION (Details 3) (Restricted shares, USD $) | 0 Months Ended | 12 Months Ended |
Jul. 08, 2013 | Dec. 31, 2013 | |
Share-based compensation | ' | ' |
Shares issued (in shares) | 8,448,992 | 8,448,992 |
Number of ordinary shares | ' | ' |
Granted (in shares) | 8,448,992 | 8,448,992 |
Forfeited (in shares) | ' | 1,689,798 |
Outstanding at the end of the period (in shares) | ' | 6,759,194 |
Vested and expected to vest at the end of the period (in shares) | ' | 6,759,194 |
Weighted average grant date fair value | ' | ' |
Granted (in dollars per share) | ' | $0.24 |
Forfeited (in dollars per share) | ' | $0.24 |
Outstanding at the end of the period (in dollars per share) | ' | $0.24 |
Vested and expected to vest at the end of the period (in dollars per share) | ' | $0.24 |
Vesting on each of June 1, 2014, 2015 and 2016, respectively | ' | ' |
Share-based compensation | ' | ' |
Vesting rights (as a percent) | ' | 60.00% |
Vesting on June 1, 2014 and 2015 | ' | ' |
Share-based compensation | ' | ' |
Vesting rights (as a percent) | ' | 40.00% |
Vesting rights, subject to fiscal year revenue (as a percent) | ' | 50.00% |
Vesting rights, based on EBIDTA (as a percent) | ' | 50.00% |
SHAREBASED_COMPENSATION_Detail3
SHARE-BASED COMPENSATION (Details 4) (Options) | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 20, 2011 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Maximum | Maximum | Maximum | Non-employees | Non-employees | Non-employees | Non-employees | ADS | ||||
USD ($) | USD ($) | USD ($) | USD ($) | CNY | USD ($) | CNY | Non-employees | ||||
USD ($) | |||||||||||
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options granted (in shares) | 9,471,008 | 2,130,000 | 25,954,666 | ' | ' | ' | 1,100,000 | ' | ' | ' | ' |
Exercise price (in dollars per share) | ' | ' | ' | $0.41 | $0.41 | $0.41 | $0.41 | ' | ' | ' | ' |
Weighted average exercise price (in dollars per share) | ' | ' | ' | ' | ' | ' | $0.16 | ' | ' | ' | ' |
Options to purchase ordinary shares, outstanding (in shares) | 37,911,574 | ' | ' | ' | ' | ' | ' | 3,028,000 | ' | ' | ' |
Options to purchase ordinary shares, exercisable (in shares) | ' | ' | ' | ' | ' | ' | ' | 3,028,000 | ' | ' | ' |
Estimated fair value of options granted (in CNY or dollars) | ' | ' | ' | ' | ' | ' | ' | 1,615,000 | ' | ' | ' |
Closing price of ordinary shares (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $0.56 | ' | $8.91 |
Options outstanding with exercise price below the closing price of the entity's ordinary share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 3,028,000 | 3,028,000 | ' |
Aggregate intrinsic value (in CNY or dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $1,237,000 | 7,487,000 | ' |
SHAREBASED_COMPENSATION_Detail4
SHARE-BASED COMPENSATION (Details 5) (Options) | 12 Months Ended | |||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | Cost of revenues | Cost of revenues | Cost of revenues | Cost of revenues | Sales and marketing expenses | Sales and marketing expenses | Sales and marketing expenses | Sales and marketing expenses | General and administration expenses | General and administration expenses | General and administration expenses | General and administration expenses | Research and development expenses | Research and development expenses | Research and development expenses | Research and development expenses | |
USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | USD ($) | CNY | CNY | CNY | |||||
Share-based compensation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total compensation expense | $1,957 | 11,852 | 16,088 | 26,956 | $275 | 1,665 | 2,896 | 4,047 | $636 | 3,853 | 6,917 | 9,669 | $633 | 3,833 | 3,219 | 8,968 | $413 | 2,501 | 3,056 | 4,272 |
ACCUMULATED_OTHER_COMPREHENSIV2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) | 12 Months Ended | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
USD ($) | CNY | CNY | Foreign currency translation | Foreign currency translation | Unrealized holding gain on available-for-sale Investment | Unrealized holding gain on available-for-sale Investment | |
CNY | USD ($) | CNY | USD ($) | ||||
Movement in accumulated other comprehensive income | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of period | ' | 3,223 | ' | 1,170 | ($34) | 1,453 | $227 |
Other comprehensive income before reclassification | ' | -154 | ' | -1,975 | ' | 1,821 | ' |
Amounts reclassified from accumulated other comprehensive income | -316 | -1,912 | -224 | ' | ' | -1,912 | ' |
Balance at the end of period | $193 | 1,157 | 3,223 | -205 | ($34) | 1,362 | $227 |
MAINLAND_CHINA_EMPLOYEE_CONTRI1
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN (Details) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | CNY | CNY | CNY | |
MAINLAND CHINA EMPLOYEE CONTRIBUTION PLAN | ' | ' | ' | ' |
Total expenses for the plan | $6,778,000 | 41,036,000 | 22,064,000 | 12,939,000 |
INCOME_TAXES_Details
INCOME TAXES (Details) | 12 Months Ended | |||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 |
USD ($) | CNY | CNY | CNY | United States of America | United States of America | Hong Kong | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | PRC | |
ChinaCache North America, Inc. | CALIFORNIA | China Cache Networks (Hong Kong) Limited | HNTE | ChinaCache Beijing | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | Beijing Blue IT | ||||||||
Maximum | ChinaCache North America, Inc. | HNTE | HNTE | HNTE | HNTE | HNTE | HNTE | Key Software Enterprise | Key Software Enterprise | Key Software Enterprise | ||||||||||
Tax Year 2010 to 2015 | Tax Year 2012 to 2014 | Tax Year 2013 and 2014 | ||||||||||||||||||
Income taxes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
State Income Tax (as a percent) | ' | ' | ' | ' | ' | 8.84% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign statutory corporate income tax rate (as a percent) | ' | ' | ' | ' | 35.00% | ' | 16.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Statutory tax rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | 25.00% | 25.00% | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferential tax rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | 10.00% | 10.00% | 10.00% |
Initial period of HNTE status | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of HNTE status upon renewal | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | '3 years | ' | ' | ' | ' | ' | ' | ' |
Loss from continuing operations before income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-PRC | ($1,120) | -6,777 | 888 | 1,236 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
PRC | -4,320 | -26,157 | -11,586 | -1,605 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss from continuing operations before income taxes | -5,440 | -32,934 | -10,698 | -369 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current | -1,951 | -11,809 | 17,490 | 13,188 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred | 2,165 | 13,104 | -11,197 | -2,043 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax expense (benefit) | $214 | 1,295 | 6,293 | 11,145 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
USD ($) | CNY | CNY | CNY | |
INCOME TAXES | ' | ' | ' | ' |
Percentage of tax deduction for qualified research and development expenses | 50.00% | 50.00% | 50.00% | 50.00% |
Reconciliation of tax computed by applying statutory income tax rate to the income tax expense | ' | ' | ' | ' |
Loss from continuing operations before income tax expense | ($5,440) | -32,934 | -10,698 | -369 |
Income tax computed at PRC statutory tax rate of 25% | -1,360 | -8,233 | -2,674 | -93 |
Preferential tax rates | -8 | -50 | 83 | -948 |
International rate differences | 737 | 4,459 | 4,376 | 7,327 |
Additional 50% tax deduction for qualified research and development expenses | -1,194 | -7,227 | -4,915 | -2,660 |
Non-deductible expenses | 3,661 | 22,164 | 10,454 | 11,304 |
Other permanent difference | ' | ' | -6,626 | ' |
Effect of changes in tax rates on deferred taxes | 652 | 3,947 | 3,779 | -1,586 |
Changes in unrecognized tax benefits | ' | ' | ' | -480 |
Changes in the valuation allowance | -351 | -2,123 | 276 | -1,719 |
Deferred tax adjustment | ' | ' | 1,540 | ' |
Effect of changes in tax rates on prior year tax | -1,923 | -11,642 | ' | ' |
Income tax expense (benefit) | $214 | 1,295 | 6,293 | 11,145 |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | USD ($) | CNY | CNY |
Deferred tax assets, Current: | ' | ' | ' |
Allowance for doubtful accounts | $209 | 1,266 | 6,096 |
Deferred Revenue | 402 | 2,436 | 840 |
Accruals | 561 | 3,394 | 6,690 |
Net current deferred tax assets | 1,172 | 7,096 | 13,626 |
Deferred tax assets, Non-current: | ' | ' | ' |
Tax losses | 65 | 394 | 6,481 |
Property and equipment | 284 | 1,719 | 2,202 |
Less: valuation allowance | -65 | -394 | -2,517 |
Net non-current deferred tax assets | 284 | 1,719 | 6,166 |
Total Deferred tax assets | 1,456 | 8,815 | 19,792 |
Deferred tax liabilities, Non-current: | ' | ' | ' |
Property and equipment | 351 | 2,127 | ' |
Net non-current deferred tax liabilities | 351 | 2,127 | ' |
Total deferred tax liabilities | $351 | 2,127 | ' |
INCOME_TAXES_Details_4
INCOME TAXES (Details 4) (PRC Subsidiaries) | Dec. 31, 2013 | Dec. 31, 2013 |
USD ($) | CNY | |
Income taxes | ' | ' |
Net tax operating losses | $7,449,000 | 45,092,000 |
INCOME_TAXES_Details_5
INCOME TAXES (Details 5) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | CNY | CNY | |
INCOME TAXES | ' | ' | ' |
Unrecognized tax benefits | $4,014,000 | 24,301,000 | 21,563,000 |
Unrecognized tax benefits related to tax loss carryforwards | 2,108,000 | 12,761,000 | 9,777,000 |
Period in which the amount of unrecognized tax benefits will change | '12 months | '12 months | ' |
Penalty expense (reversal) | -20,000 | -123,000 | 2,797,000 |
Interest expense (reversal) | 274,000 | 1,657,000 | 1,304,000 |
Roll-forward of accrued unrecognized tax benefits | ' | ' | ' |
Balance-beginning | 3,562,000 | 21,563,000 | 23,850,000 |
Increase based on tax positions related to the current year | 2,757,000 | 16,694,000 | 3,169,000 |
Decrease based on tax positions related to the current year | -2,305,000 | -13,956,000 | -5,456,000 |
Balance-ending | $4,014,000 | 24,301,000 | 21,563,000 |
RELATED_PARTY_BALANCES_AND_TRA2
RELATED PARTY BALANCES AND TRANSACTIONS (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Mr. Wang Song | ' |
Related party balances and transactions | ' |
Relationship with the Company | 'The Co-Founder and Director of the Company |
Ms. Kou Xiaohong | ' |
Related party balances and transactions | ' |
Relationship with the Company | 'The Co-Founder and Director of the Company |
Blue I.T. Technologies Limited ("Blue IT") | ' |
Related party balances and transactions | ' |
Relationship with the Company | 'A company 100% owned by Ms. Kou Xiaohong |
Harvest Century International Ltd. ("HCI") | ' |
Related party balances and transactions | ' |
Relationship with the Company | 'A company 100% owned by Ms. Kou Xiaohong |
Xuntong Tianxia Limited ("Xuntong") | ' |
Related party balances and transactions | ' |
Relationship with the Company | 'A company under the significant influence of a senior management of the Company |
Jiuzhou Changxiang Technologies (Beijing) Limited ("Jiuzhou Changxiang") | ' |
Related party balances and transactions | ' |
Relationship with the Company | 'A company under the significant influence of a senior management of the Company |
RELATED_PARTY_BALANCES_AND_TRA3
RELATED PARTY BALANCES AND TRANSACTIONS (Details 2) (Ms. Kou Xiaohong) | 12 Months Ended |
Dec. 31, 2013 | |
Blue I.T. Technologies Limited ("Blue IT") | ' |
Related party balances and transactions | ' |
Percentage ownership held by related party | 100.00% |
Harvest Century International Ltd. ("HCI") | ' |
Related party balances and transactions | ' |
Percentage ownership held by related party | 100.00% |
RELATED_PARTY_BALANCES_AND_TRA4
RELATED PARTY BALANCES AND TRANSACTIONS (Details 3) | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
CNY | CNY | USD ($) | Xuntong | Xuntong | Xuntong | Jiuzhou Changxiang | Jiuzhou Changxiang | Jiuzhou Changxiang | Ms. Kou Xiaohong | Ms. Kou Xiaohong | Ms. Kou Xiaohong | Ms. Kou Xiaohong | |
CNY | CNY | USD ($) | CNY | CNY | USD ($) | USD ($) | CNY | CNY | CNY | ||||
Changes in related party balances | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | 7,578 | -18 | ($119) | 8,640 | ' | $23 | -1,044 | ' | ($139) | ($3) | -18 | -18 | -18 |
Receivables from related party for services provided | ' | 13,000 | ' | ' | 13,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Cash received from related party | -8,499 | -4,360 | ' | -8,499 | -4,360 | ' | ' | ' | ' | ' | ' | ' | ' |
Service fee charged by related party | -1,614 | -4,139 | ' | ' | ' | ' | -1,614 | -4,139 | ' | ' | ' | ' | ' |
Service fee paid to related party | 1,814 | 3,095 | ' | ' | ' | ' | 1,814 | 3,095 | ' | ' | ' | ' | ' |
Balance at the end of the period | -721 | 7,578 | ($119) | 141 | 8,640 | $23 | -844 | -1,044 | ($139) | ($3) | -18 | -18 | -18 |
REPURCHASE_OF_ORDINARY_SHARES_
REPURCHASE OF ORDINARY SHARES (Details) (ADS) | 12 Months Ended | ||
Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | |
2011 Share Repurchase Plan | 2012 Share Repurchase Plan | 2012 Share Repurchase Plan | |
CNY | USD ($) | CNY | |
Repurchase of ordinary shares | ' | ' | ' |
Number of shares repurchased | 1,641,311 | 319,827 | 319,827 |
Shares repurchased, value | 63,631,000 | $1,520,000 | 9,470,000 |
RESTRICTED_NET_ASSETS_Details
RESTRICTED NET ASSETS (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
USD ($) | CNY | CNY | |
RESTRICTED NET ASSETS | ' | ' | ' |
Minimum percentage of after tax profits to be allocated to general reserve fund | 10.00% | 10.00% | ' |
Maximum threshold, expressed as a percentage of an entity's general reserve fund to its registered capital, for which allocations of after-tax profits to the general reserve fund are required | 50.00% | 50.00% | ' |
Amount appropriated to the statutory reserve funds | $219,000 | 1,326,000 | 1,326,000 |
Amounts restricted include paid-in capital and statutory reserves of the Company's PRC Subsidiaries and the equity of the VIEs | $47,509,000 | 287,607,000 | ' |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details) (Shanghai JNet, CNY) | Dec. 26, 2011 |
In Thousands, unless otherwise specified | |
Shanghai JNet | ' |
Breakdown of assets and liabilities attributed to discontinued operations | ' |
Current assets | 63,182 |
Property and equipment, net | 5 |
Intangible assets | 19 |
Goodwill | 16,989 |
Total assets | 80,195 |
Current liabilities | -48,737 |
Deferred tax liabilities | -5 |
Total liabilities derecognized | -48,742 |
Total net assets | 31,453 |
EARNINGS_LOSS_PER_SHARE_Detail
EARNINGS (LOSS) PER SHARE (Details) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2011 | Dec. 31, 2013 | |
USD ($) | CNY | CNY | CNY | Ordinary shares | Ordinary shares | |
CNY | ||||||
Numerator: | ' | ' | ' | ' | ' | ' |
Net loss from continuing operations | ($5,654,000) | -34,229,000 | -16,991,000 | -11,514,000 | ' | ' |
Income from discontinued operations | ' | ' | ' | 31,977,000 | ' | ' |
Net (loss) income attributable to ordinary shareholders: | -5,654,000 | -34,229,000 | -16,991,000 | 20,463,000 | ' | ' |
Denominator: | ' | ' | ' | ' | ' | ' |
Number of shares outstanding, opening | 362,102,972 | 362,102,972 | 364,813,932 | 385,843,484 | ' | ' |
Weighted average number of shares issued | 813,568 | 813,568 | 136,676 | 3,063,940 | ' | ' |
Weighted average number of shares repurchased | ' | ' | -1,169,733 | -6,922,907 | ' | ' |
Weighted-average number of shares outstanding - Basic | 362,916,540 | 362,916,540 | 363,780,875 | 381,984,517 | ' | ' |
Weighted-average number of shares outstanding - Diluted | 362,916,540 | 362,916,540 | 363,780,875 | 381,984,517 | ' | ' |
Earnings (loss) per share-Basic | ' | ' | ' | ' | ' | ' |
Net loss from continuing operations (in CNY or dollars per share) | ($0.01) | -0.09 | -0.05 | -0.03 | ' | ' |
Income from discontinued operations: (in CNY or dollars per share) | ' | ' | ' | 0.08 | ' | ' |
Basic (in CNY or dollars per share) | ($0.01) | -0.09 | -0.05 | 0.05 | ' | ' |
Earnings (loss) per share-Diluted | ' | ' | ' | ' | ' | ' |
Net loss from continuing operations (in CNY or dollars per share) | ($0.01) | -0.09 | -0.05 | -0.03 | ' | ' |
Income from discontinued operations: (in CNY or dollars per share) | ' | ' | ' | 0.08 | ' | ' |
Diluted (in CNY or dollars per share) | ($0.01) | -0.09 | -0.05 | 0.05 | ' | ' |
Consideration received from issuance of share | ' | ' | ' | ' | 0 | ' |
Number of shares not used in the settlement of stock option awards | ' | ' | ' | ' | ' | 1,084,224 |
FAIR_VALUE_MEASUREMENT_Details
FAIR VALUE MEASUREMENT (Details) (JNet Group acquisition) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2010 | |
JNet Group acquisition | ' | ' |
Fair value measurement | ' | ' |
Pre-tax income estimation period | '3 years | ' |
Discount rate (as a percent) | ' | 17.00% |
FAIR_VALUE_MEASUREMENT_Details1
FAIR VALUE MEASUREMENT (Details 2) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | |
Investee A | Investee A | Investee B | Investee B | |
CNY | CNY | CNY | USD ($) | |
Reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs | ' | ' | ' | ' |
Fair value at the beginning of the period | 1,716,000 | ' | ' | $2,022,000 |
Investment | ' | 1,259,000 | 12,240,000 | ' |
Changes in fair value | -1,716,000 | 457,000 | ' | ' |
Fair value at the end of the period | ' | 1,716,000 | 12,240,000 | $2,022,000 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | CNY | CNY | CNY | |
COMMITMENTS AND CONTINGENCIES | ' | ' | ' | ' |
Total rental expense under all operating leases | $3,272,000 | 19,806,000 | 15,621,000 | 5,626,000 |
Future minimum lease payments under non-cancelable operating leases in relation to office premises | ' | ' | ' | ' |
2014 | 3,195,000 | 19,342,000 | ' | ' |
2015 | 2,988,000 | 18,089,000 | ' | ' |
2016 | 2,725,000 | 16,497,000 | ' | ' |
2017 | 1,108,000 | 6,703,000 | ' | ' |
Total | 10,016,000 | 60,631,000 | ' | ' |
Purchase Commitments | ' | ' | ' | ' |
Outstanding purchase commitments in relation to bandwidth | $29,940,000 | 181,245,000 | ' | ' |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (Subsequent event, USD $) | 0 Months Ended | 0 Months Ended | ||||
Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 19, 2014 | Feb. 19, 2014 | |
Institutional Investors | Ordinary shares | Ordinary shares | ADS | Metasequoia | Metasequoia | |
Institutional Investors | Institutional Investors | NetCloud | NetCloud | |||
Series A Preferred Shares | ||||||
Minimum | ||||||
SUBSEQUENT EVENTS | ' | ' | ' | ' | ' | ' |
Amount of convertible loan receivable | ' | ' | ' | ' | $500,000 | ' |
Rate added to the US prime rate (as a percent) | ' | ' | ' | ' | 2.00% | ' |
Description of variable interest rate basis | ' | ' | ' | ' | 'US Prime rate | ' |
Term of loan | ' | ' | ' | ' | '24 months | ' |
Amount of convertible portion of loan receivable | ' | ' | ' | ' | ' | 2,500,000 |
Value of shares issued | $55,000,000 | ' | ' | ' | ' | ' |
Number of shares issued | ' | ' | 53,855,569 | 3,365,973 | ' | ' |
Purchase price (in dollars per share) | ' | ' | $1.02 | $16.34 | ' | ' |
Number of shares agreed to be repurchased | ' | 28,960,922 | ' | ' | ' | ' |
CONDENSED_FINANCIAL_INFORMATIO2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details) | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
In Thousands, unless otherwise specified | USD ($) | CNY | USD ($) | CNY | CNY | CNY | Parent | Parent | Parent | Parent | Parent | Parent |
USD ($) | CNY | USD ($) | CNY | CNY | CNY | |||||||
Current assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | $55,849 | 338,092 | $52,387 | 317,137 | 392,535 | 592,706 | $19,431 | 117,626 | $27,095 | 164,024 | 269,859 | 519,221 |
Restricted cash | 9,911 | 60,000 | ' | ' | ' | ' | 9,911 | 60,000 | ' | ' | ' | ' |
Prepaid expenses and other current assets | 8,351 | 50,549 | ' | 31,240 | ' | ' | 1,568 | 9,477 | ' | 2,673 | ' | ' |
Available-for-sale investments | 4,070 | 24,636 | ' | ' | ' | ' | 4,070 | 24,636 | ' | ' | ' | ' |
Total current assets | 129,963 | 786,751 | ' | 600,842 | ' | ' | 34,980 | 211,739 | ' | 166,697 | ' | ' |
Non-current assets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | ' | ' | ' | ' | ' | ' | 1,381 | 8,359 | ' | 11,466 | ' | ' |
Long term investments | 3,543 | 21,450 | ' | 15,136 | ' | ' | 2,287 | 13,847 | ' | 9,033 | ' | ' |
Available-for-sale investments | 2,022 | 12,240 | ' | 82,292 | ' | ' | ' | ' | ' | 82,292 | ' | ' |
Investments in subsidiaries | ' | ' | ' | ' | ' | ' | 70,008 | 423,804 | ' | 393,371 | ' | ' |
Total non-current assets | 62,841 | 380,417 | ' | 300,048 | ' | ' | 73,676 | 446,010 | ' | 496,162 | ' | ' |
TOTAL ASSETS | 192,804 | 1,167,168 | ' | 900,890 | ' | ' | 108,656 | 657,749 | ' | 662,859 | ' | ' |
Current liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued expenses and other payables | 25,947 | 157,075 | ' | 57,773 | ' | ' | 763 | 4,616 | ' | 970 | ' | ' |
Total current liabilities | 84,560 | 511,908 | ' | 235,641 | ' | ' | 763 | 4,616 | ' | 970 | ' | ' |
Total liabilities | 84,911 | 514,035 | ' | 239,001 | ' | ' | 763 | 4,616 | ' | 970 | ' | ' |
Shareholders' equity: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ordinary shares (US$0.0001 par value; 1,000,000,000 and 1,000,000,000 shares authorized; 374,464,476 and 374,464,476 shares issued and outstanding as of December 31, 2012 and 2013, respectively) | 47 | 282 | ' | 275 | ' | ' | 47 | 282 | ' | 275 | ' | ' |
Additional paid-in capital | 206,110 | 1,247,730 | ' | 1,220,198 | ' | ' | 206,110 | 1,247,730 | ' | 1,220,198 | ' | ' |
Treasury stock | -12,075 | -73,101 | ' | -73,101 | ' | ' | -12,075 | -73,101 | ' | -73,101 | ' | ' |
Statutory reserves | 219 | 1,326 | ' | 1,326 | ' | ' | 219 | 1,326 | ' | 1,326 | ' | ' |
Accumulated deficit | -86,601 | -524,261 | ' | -490,032 | ' | ' | -86,601 | -524,261 | ' | -490,032 | ' | ' |
Accumulated other comprehensive income | 193 | 1,157 | ' | 3,223 | ' | ' | 193 | 1,157 | ' | 3,223 | ' | ' |
Total shareholders' equity | 107,893 | 653,133 | ' | 661,889 | 667,509 | 678,839 | 107,893 | 653,133 | ' | 661,889 | ' | ' |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $192,804 | 1,167,168 | ' | 900,890 | ' | ' | $108,656 | 657,749 | ' | 662,859 | ' | ' |
CONDENSED_FINANCIAL_INFORMATIO3
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Parenthetical) (Details 2) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed Balance Sheet Statements, Captions [Line Items] | ' | ' |
Ordinary shares, par value (in dollars per share) | $0.00 | $0.00 |
Ordinary shares, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, shares issued (in shares) | 374,464,476 | 374,464,476 |
Ordinary shares, shares outstanding (in shares) | 374,464,476 | 374,464,476 |
Parent | ' | ' |
Condensed Balance Sheet Statements, Captions [Line Items] | ' | ' |
Ordinary shares, par value (in dollars per share) | $0.00 | $0.00 |
Ordinary shares, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Ordinary shares, shares issued (in shares) | 374,464,476 | 374,464,476 |
Ordinary shares, shares outstanding (in shares) | 374,464,476 | 374,464,476 |
CONDENSED_FINANCIAL_INFORMATIO4
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details 3) | 12 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | CNY | CNY | CNY | Parent | Parent | Parent | Parent | |
USD ($) | CNY | CNY | CNY | |||||
Condensed statements of comprehensive income (loss) | ' | ' | ' | ' | ' | ' | ' | ' |
General and administrative expenses | ($25,368,000) | -153,568,000 | -106,115,000 | -57,308,000 | ($2,325,000) | -14,072,000 | -9,210,000 | -13,555,000 |
Impairment of an available-for-sale investment | 201,000 | 1,217,000 | 0 | 0 | 201,000 | 1,217,000 | ' | ' |
Post-acquisition settlement consideration | ' | ' | ' | -7,158,000 | ' | ' | ' | -7,158,000 |
Operating income/ (loss) | -5,854,000 | -35,441,000 | -7,963,000 | 8,228,000 | -2,526,000 | -15,289,000 | -9,210,000 | -20,713,000 |
Interest income | 415,000 | 2,513,000 | 1,844,000 | 2,233,000 | 178,000 | 1,075,000 | 657,000 | 47,000 |
Other income | 1,137,000 | 6,886,000 | -1,758,000 | -5,165,000 | 1,000 | 6,000 | 680,000 | ' |
Foreign exchange loss | -546,000 | -3,308,000 | -1,481,000 | -4,411,000 | -1,092,000 | -6,608,000 | -2,437,000 | -6,967,000 |
Equity in income of subsidiaries | ' | ' | ' | ' | -2,215,000 | -13,413,000 | -6,681,000 | 16,119,000 |
Loss from continuing operations before income taxes | -5,440,000 | -32,934,000 | -10,698,000 | -369,000 | -5,654,000 | -34,229,000 | -16,991,000 | -11,514,000 |
Net loss from continuing operations | -5,654,000 | -34,229,000 | -16,991,000 | -11,514,000 | -5,654,000 | -34,229,000 | -16,991,000 | -11,514,000 |
Income from discontinued operations | ' | ' | ' | 31,977,000 | ' | ' | ' | 31,977,000 |
Net income/ (loss) | -5,654,000 | -34,229,000 | -16,991,000 | 20,463,000 | -5,654,000 | -34,229,000 | -16,991,000 | 20,463,000 |
Foreign currency translation | -326,000 | -1,975,000 | 29,000 | 773,000 | -326,000 | -1,975,000 | 29,000 | 773,000 |
Unrealized holding gain on available-for-sale investments | 301,000 | 1,821,000 | 1,594,000 | 90,000 | 301,000 | 1,821,000 | 1,594,000 | 90,000 |
Amounts reclassified from accumulated other comprehensive income | -316,000 | -1,912,000 | -224,000 | ' | -316,000 | -1,912,000 | -224,000 | ' |
Total other comprehensive income (loss), net of tax | -341,000 | -2,066,000 | 1,399,000 | 863,000 | -341,000 | -2,066,000 | 1,399,000 | 863,000 |
Comprehensive income/ (loss) | ($5,995,000) | -36,295,000 | -15,592,000 | 21,326,000 | ($5,995,000) | -36,295,000 | -15,592,000 | 21,326,000 |
CONDENSED_FINANCIAL_INFORMATIO5
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details 4) | 12 Months Ended | |||||||
Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | CNY | CNY | CNY | Parent | Parent | Parent | Parent | |
USD ($) | CNY | CNY | CNY | |||||
Condensed statements of cash flows | ' | ' | ' | ' | ' | ' | ' | ' |
Net cash used in operating activities | $20,060,000 | 121,437,000 | 31,898,000 | 58,666,000 | ($6,669,000) | -40,370,000 | -108,007,000 | -63,412,000 |
Cash flows from investing activities: | ' | ' | ' | ' | ' | ' | ' | ' |
Purchases of property and equipment | -16,176,000 | -97,926,000 | -102,391,000 | -77,563,000 | ' | ' | -5,716,000 | -7,779,000 |
Deconsolidation of a consolidated VIE | ' | ' | ' | -2,204,000 | ' | ' | ' | -2,204,000 |
Cash paid pursuant to post-acquisition settlement consideration agreement | ' | ' | ' | -4,286,000 | ' | ' | ' | -4,286,000 |
Cash paid for available-for-sale investments | ' | ' | ' | -99,190,000 | ' | ' | ' | -99,190,000 |
Cash paid for available for-sale investment on behalf of a subsidiary | ' | ' | ' | ' | -2,022,000 | -12,240,000 | ' | ' |
Cash paid for long term investment (Note 10) | -1,043,000 | -6,314,000 | -6,000,000 | -9,136,000 | -795,000 | -4,815,000 | -3,000,000 | -6,033,000 |
Cash received from sale of available-for-sale investments (Note 11) | 9,459,000 | 57,260,000 | 18,582,000 | ' | 9,459,000 | 57,260,000 | 18,582,000 | ' |
Net cash used in investing activities | -18,645,000 | -112,872,000 | -99,602,000 | -192,379,000 | 6,642,000 | 40,205,000 | 9,866,000 | -119,492,000 |
Cash flows from financing activities: | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from employee share options exercised | 2,591,000 | 15,683,000 | 3,351,000 | 4,019,000 | 2,591,000 | 15,683,000 | 3,351,000 | 4,019,000 |
Cash gauranteed as restricted cash | -9,911,000 | -60,000,000 | ' | ' | -9,911,000 | -60,000,000 | ' | ' |
Payment for repurchase of ordinary shares | ' | ' | -9,463,000 | -63,631,000 | ' | ' | -9,463,000 | -63,631,000 |
Payment of dividend | ' | ' | -130,000 | ' | ' | ' | -130,000 | ' |
Net cash (used in)/ provided by financing activities | 2,591,000 | 15,683,000 | -6,242,000 | -59,612,000 | -7,320,000 | -44,317,000 | -6,242,000 | -59,612,000 |
Net (decrease)/ increase in cash and cash equivalents | 4,006,000 | 24,248,000 | -73,946,000 | -193,325,000 | -7,347,000 | -44,482,000 | -104,383,000 | -242,516,000 |
Cash and cash equivalents at beginning of the year | 52,387,000 | 317,137,000 | 392,535,000 | 592,706,000 | 27,095,000 | 164,024,000 | 269,859,000 | 519,221,000 |
Effect of foreign exchange rate changes on cash | -544,000 | -3,293,000 | -1,452,000 | -6,846,000 | -317,000 | -1,916,000 | -1,452,000 | -6,846,000 |
Cash and cash equivalents at end of the year | $55,849,000 | 338,092,000 | 317,137,000 | 392,535,000 | $19,431,000 | 117,626,000 | 164,024,000 | 269,859,000 |