Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Mar. 31, 2014

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

(6) GOODWILL AND OTHER INTANGIBLE ASSETS

(a) Goodwill

The change in the carrying amount of goodwill is as follows:

		RMB

Balance as of April 1, 2013		23,422,850
Acquisition of Xing Wei Group (Note 18)		7,589,052
Balance as of March 31, 2014		31,011,902

There were no changes in the carrying amount of goodwill during the years ended March 31, 2012 and 2013.

(b) Intangible Assets

The following table summarizes the Company’s intangible assets, as of March 31, 2013 and 2014.

	March 31, 2013
					Weighted
	Gross			Net	Average
	carrying	Accumulated		carrying	Amortization
	amount	amortization		amount	Period
	RMB	RMB		RMB	Years
ETS TOEIC license	24,126,706	(9,901,334	)	14,225,372	10
Customer relationships	1,300,000	(442,498	)	857,502	12
Total intangible assets	25,426,706	(10,343,832	)	15,082,874

	March 31, 2014
							Weighted
	Gross	Accumulated				Net	Average
	carrying	amortization				carrying	Amortization
	amount	/deduction		Impairment		amount	Period
	RMB	RMB		RMB		RMB	Years
ETS TOEIC license	24,126,706	(12,117,249	)	(12,009,457	)	—	10
Customer relationships	1,300,000	(550,833	)	—		749,167	12
Training platform	422,700	(35,225	)	—		387,475	5
Contracts in progress (i)	1,225,380	(569,087	)	—		656,293	—
Total intangible assets	27,074,786	(13,272,394	)	(12,009,457	)	1,792,935

(i) Contracts in progress of RMB 569,087 recognized at the acquisition date were subsequently deducted from billing of RMB 735,000 upon completion of certain contracts as of March 31, 2014. The balance of RMB 656,293 will be deducted from the billing of RMB 1,911,000 upon completion of the remaining contracts.

ETS TOEIC license represents the amounts paid to Educational Testing Service (“ETS”) under a master distributor agreement for the exclusive right to market, distribute, administer and sell the Test of English for International Communication (“TOEIC”) in mainland PRC for ten years commencing from March 2009. The TOEIC distributor contract with ETS was terminated on February 28, 2014 and the Company recognized an impairment loss of RMB 12,009,457 for the year ended March 31, 2014.

Amortization expenses for intangible assets recognized as cost of revenues were RMB 2,758,838, RMB 2,514,392 and RMB 2,359,475 for the year ended March 31, 2012, 2013 and 2014, respectively.

As of March 31, 2014, the estimated amortization expense for the next five years is as follows:

		March 31
		RMB
2015		192,873
2016		192,873
2017		192,873
2018		192,873
2019		157,648

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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