23.

CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

Under PRC laws and regulations, the Company's PRC subsidiary E-Sun Sky Computer and VIEs are restricted in their ability to transfer certain of its net assets to the Company in the form of dividend payments, loans or advances. The amounts restricted include paid up capital, retained earnings and statutory reserves, as determined pursuant to PRC generally accepted accounting principles, totaling RMB636,146 (US$102,528) as of December 31, 2014. The following is the condensed financial information of the Company on a parent company only basis.

Condensed balance sheets

	As of December 31, 2013		As of December 31, 2014		As of December 31, 2014
	RMB		RMB		US$

ASSETS
Current assets:
Cash and cash equivalents		369,936		93,748		15,109
Time deposits		121,085		372,450		60,028
Other current assets		194		5,964		962
Amounts due from intergroup companies		1,559		51,178		8,248

Total current assets		492,774		523,340		84,347

Non-current assets:
Investment in subsidiaries and VIEs		335,566		619,032		99,770
Property and equipment, net		527		462		74

Total non-current assets		336,093		619,494		99,844

TOTAL ASSETS		828,867		1,142,834		184,191

	As of December 31, 2013			As of December 31, 2014			As of December 31, 2014
	RMB			RMB			US$
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accrued payroll and welfare payable		-			62			10
Accrued expenses and other liabilities		12,098			11,217			1,807
Amounts due to intergroup companies		7,349			13,933			2,246

Total current liabilities		19,447			25,212			4,063

TOTAL LIABILITIES		19,447			25,212			4,063

Shareholders' equity :
Class A Ordinary shares, par value US$0.00005 per share, 700,000,000 shares authorized as of December 31, 2013 and 2014; 66,539,000 and 254,844,582 shares issued and outstanding as of December 31, 2013 and 2014, respectively		20			85			14
Class B Ordinary shares, par value US$0.00005 per share; 300,000,000 shares authorized as of December 31, 2013 and 2014; 262,197,451 and 96,634,529 shares issued and outstanding as of December 31, 2013 and 2014, respectively		94			36			6
Additional paid-in capital		967,233			1,106,234			178,293
Accumulated other comprehensive income		10,492			22,637			3,648
Accumulated deficit		(168,419	)		(11,370	)		(1,833	)

Total shareholder's equity		809,420			1,117,622			180,128

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		828,867			1,142,834			184,191

Condensed statements of comprehensive income

	For the years ended December 31,
	2012			2013			2014			2014
	RMB			RMB			RMB			US$

Net Revenues		-			-			-			-
Operating expenses:
Sales and marketing		-			-			(214	)		(34	)
General and administrative		(608	)		(952	)		(11,875	)		(1,914	)
Write-off of deferred offering expenses		(2,230	)		-			(3,241	)		(522	)

Total operating expenses		(2,838	)		(952	)		(15,330	)		(2,470	)
Other operating expenses		(4	)		-			-			-

Operating loss		(2,842	)		(952	)		(15,330	)		(2,470	)
Interest income		-			246			10,920			1,760
Interest expense		-			(4,712	)		-			-
Changes in fair value of derivative component of the convertible note		-			(26,809	)		-			-
Equity in profits of subsidiaries and VIEs		14,618			120,741			161,459			26,023

Income before income tax		11,776			88,514			157,049			25,313
Income tax benefit (expense)		(7,533	)		17,540			-			-

Net income		4,243			106,054			157,049			25,313

Other comprehensive income (loss)
Foreign currency translation gain (loss)		58			(5,496	)		12,145			1,957

Comprehensive income		4,301			100,558			169,194			27,270

Condensed statements of cash flows

	For the years ended December 31,
	2012		2013			2014			2014
	RMB		RMB			RMB			US$

Net cash generated from (used in) operating activities		38		7,387			(26,721	)		(4,307	)
Net cash generated from (used in) investing activities		511		(116,035	)		(293,289	)		(47,270	)
Net cash generated from financing activities		2,302		479,896			42,315			6,820
Effect of exchange rate changes on cash and cash equivalents		-		(4,812	)		1,507			243
Net increase (decrease) in cash and cash equivalents		2,851		366,436			(276,188	)		(44,514	)
Cash and cash equivalents at beginning of the year		649		3,500			369,936			59,623
Cash and cash equivalents at end of the year		3,500		369,936			93,748			15,109

Basis of presentation

Condensed financial information is used for the presentation of the Company, or the parent company. The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company's consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries and VIEs.

The parent company records its investment in its subsidiaries and VIEs under the equity method of accounting as prescribed in ASC 323, “Investments-Equity Method and Joint Ventures”. Such investments are presented on the condensed balance sheets as “Investment in subsidiaries and VIEs” and their respective profit or loss as “Equity in profits of subsidiaries and VIEs” on the condensed statements of comprehensive income. Equity method accounting ceases when the carrying amount of the investment, including any additional financial support, in a subsidiary and VIEs is reduced to zero unless the parent company has guaranteed obligations of the subsidiary and VIEs or is otherwise committed to provide further financial support. If the subsidiary and VIEs subsequently reports net income, the parent company shall resume applying the equity method only after its share of that net income equals the share of net losses not recognized during the period the equity method was suspended.

The parent company's condensed financial statements should be read in conjunction with the Group's consolidated financial statements.