| AVAILABLE-FOR-SALE INVESTMENTS |
| 13. |
|
AVAILABLE-FOR-SALE INVESTMENTS |
| |
(i) |
|
Series C Preferred Shares in 51.com |
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|
On July 1, 2008, the Company entered into an agreement to purchase 18,508,208 redeemable
convertible Series C Preferred Shares of 51.com (the “Series C Preferred Shares”) in exchange
for the surrender of a promissory note of RMB34,312,761 (US$5,000,000) and cash consideration
of RMB314,370,245 (US$45,809,524). The Company has evaluated and determined that there was no
embedded derivative requiring bifurcation from the Series C Preferred Shares under the
requirements of ASC 815. The embedded conversion option, redemption option and the deemed
liquidation event did not qualify for derivative accounting because the underlying ordinary
shares into which the Series C Preferred Shares can be converted into, are neither publicly
traded nor readily convertible to cash. |
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|
The Company recorded its investment in the Series C Preferred Shares as an available-for-sale
investment. Subsequent to initial recognition, the available-for-sale investment is measured at
fair value with changes in fair value recognized in accumulated other comprehensive loss
included in shareholders’ equity. As of December 31, 2009 and 2010, the Company recorded the
investment in 51.com at a fair value of RMB400,933,182 and RMB374,838,369, respectively, with
RMB48,673,628 decrease and RMB14,467,019 (US$2,191,972) decrease, respectively, in fair value
of the investment debited, respectively, to other comprehensive loss. As at December 31, 2009
and 2010, the Company has accumulated unrealized holding gains of approximately RMB51,991,000
and RMB39,524,000 (US$5,988,000) recorded within accumulated other comprehensive income related
to its investment in 51.com. |
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(ii) |
|
Series A Preferred Shares in MET |
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|
On September 13, 2009, the Company entered into an agreement to purchase 5,000,000 redeemable
convertible Series A Preferred Shares of MET (the “Series A Preferred Shares”) in exchange for
cash consideration of 34,157,500 (US$5,000,000). The Company has evaluated and determined that
there was no embedded derivative requiring bifurcation from the Series A Preferred Shares under
the requirements of ASC 815. The embedded conversion option, redemption option and the
liquidation preference did not qualify for derivative accounting because the underlying
ordinary shares into which the Series A Preferred Shares can be converted into, are neither
publicly traded nor readily convertible to cash. |
| |
|
The Company recorded the investment in the Series A Preferred Shares as an available-for-sale
investment. Subsequent to initial recognition, the available-for-sale investment is measured at
fair value with changes in fair value recognized in accumulated other comprehensive loss
included in shareholders’ equity. As of December 31, 2009 and 2010, the Company recorded the
investment in MET at a fair value of RMB50,033,452 and RMB 48,464,292 (US$7,343,075), with an
appreciation of RMB15,909,113 and depreciation of RMB73,032 (US$11,065), respectively in fair
value of the investment (credited) debited to other comprehensive loss for the years ended
December 31, 2009 and 2010. As at December 31, 2009 and 2010, the Company has accumulated
unrealized holding gains of approximately RMB 15,909,000 and RMB 15,836,000 (US$2,399,000)
recorded within accumulated other comprehensive income related to its investment in MET. |
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