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

ACQUISITION

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ACQUISITION
 12 Months Ended
Mar. 31, 2015
ACQUISITION  
ACQUISITION

(19)ACQUISITION

 

On October 31, 2013, ATA Inc. acquired the entire equity interest of Xing Wei and its wholly owned subsidiary Zhi Xing (collectively the “Xing Wei Group”) for cash consideration of USD 3.19 million (equivalent RMB 19,612,120). Xing Wei Group provides training solutions as well as mobile training platforms for corporations in the PRC. The Company expected the acquisition will provide the Company a more comprehensive set of service offerings, which will enable it to deepen its existing client relationships in the PRC.

 

The Company paid the selling shareholder of Xing Wei Group USD 3.19 million in cash on November 1, 2013.

 

This acquisition was accounted for under the acquisition method and resulted in Xing Wei Group becoming consolidated subsidiaries of the Company.

 

The acquired business contributed net revenue of RMB 305,607 and net loss of RMB 1,702,306 to the Company for the period from October 31, 2013 to March 31, 2014. The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on April 1, 2012:

 

 

 

Pro forma year
ended March 31,
2013(Unaudited)

 

Pro forma year
ended March 31,
2014(Unaudited)

 

 

 

RMB

 

RMB

 

 

 

 

 

 

 

Net revenue

 
367,598,801 

 
386,386,238 

 

Net income

 
20,640,931 

 
23,342,382 

 

 

The Company had no material, nonrecurring pro forma adjustment directly attributable to the business combination included in the reported pro forma net revenue and net income.

 

Acquisition related costs of RMB 676,237 were included in the general and administration expenses in the Company’s consolidated statement of comprehensive income for the year ended March 31, 2014.

 

The following table summarizes the consideration paid to acquire Xing Wei Group and the amounts of identifiable assets acquired and liabilities assumed at the acquisition date:

 

 

 

October 31, 2013

 

 

 

RMB

 

Fair value of consideration transferred:

 

 

 

Cash

 
19,612,120

 

 

 

 

 

Fair values of identifiable assets acquired and liabilities assumed:

 

 

 

Cash

 
9,785,414

 

Accounts receivable and other current assets

 
710,300

 

Contracts in progress

 
1,225,380

 

Property and equipment

 
165,168

 

Training platform

 
422,700

 

Accrued expenses and other current liabilities

 
(285,894

)

 

 

 

 

Total identifiable net assets

 
12,023,068

 

 

 

 

 

Goodwill

 
7,589,052

 

 

 

 

 

 

 
19,612,120

 

 

 

 

 

 

The goodwill represents the workforce of the acquired business and synergies expected to arise after the Company’s acquisition of Xing Wei Group and expanding the product offering of testing services. All of the goodwill was assigned to the enterprise level. The goodwill is not expected to be deductible for income tax purpose.