CCCL Shocker
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During the year ended December 31, 2013 we entered into foreign currency transaction agreements that resulted in significant losses to us in 2014.
During 2013, we entered into certain foreign currency transaction agreements with a financial institution related to the movement of the Renminbi against the U.S. dollar. We recorded realized and unrealized fair value gains on these agreements totaling RMB3,346,000 for the year ended December 31, 2013. In 2014, as the Renminbi depreciated against the U.S. dollar, we incurred realized and unrealized losses totaling RMB70,312,000 ($11,615,000) for the six months ended June 30, 2014 in connection with these agreements. In July 2014, Sound Treasure Limited, our largest shareholder and an affiliate of our Chief Executive Officer, agreed to assume these agreements. As a result, we will not be required to fund any losses related to these agreements, and will neither suffer any future liabilities arising under those agreements nor enjoy any benefits arising under those agreements.
