Securities code: Kaiyuan Education Technology Group Co.Ltd(300338) securities abbreviation: Kaiyuan Education Technology Group Co.Ltd(300338) Announcement No.: 2022022 Kaiyuan Education Technology Group Co.Ltd(300338)
Announcement on the provision for impairment of goodwill
The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete without false records, misleading statements or major omissions.
Kaiyuan Education Technology Group Co.Ltd(300338) (hereinafter referred to as “the company”) deliberated and adopted the proposal on withdrawing the provision for impairment of goodwill at the 23rd Meeting of the Fourth Board of directors held on April 28, 2022. In 2021, the company plans to withdraw the provision for impairment of asset goodwill of 562324 million yuan. Now the relevant matters are announced as follows: I. overview of withdrawing the provision for impairment of goodwill
1. Formation of goodwill related to impairment
(1) Acquisition of 100% equity of Shanghai Hengqi Education Co., Ltd. According to the appraisal report (Kaiyuan pingbao Zi [2016] No. 1-071) issued by Kaiyuan Assets Appraisal Co., Ltd. with March 31, 2016 as the appraisal base date, the appraisal value of 100% equity of Hengqi education determined by the income method is 1209193800 yuan. The transaction amount of the company’s purchase of 100% equity of Hengqi education is 119999900 yuan, and the difference between the fair value of identifiable net assets of 131743600 yuan on the acquisition date of Hengqi Education (March 1, 2017) enjoyed by Kaiyuan instrument company is 1068256300 yuan. The original goodwill in the statement of Hengqi education company on the acquisition date was 37.154 million yuan. On April 1, 2017, Hengqi education acquired its subsidiaries Tianshui branch and Xinjiang third branch, adding 4.9056 million yuan of goodwill. Considering that the assets of Hengqi education and its subsidiaries cannot be separated, the company takes Hengqi education itself and its directly subordinate campuses as a unified asset group, and the goodwill of Hengqi education asset group is RMB 1110315900.
(2) The company acquired 70% equity of Zhongda Yingcai (Beijing) Online Education Technology Co., Ltd. (hereinafter referred to as “Zhongda Yingcai”). According to the appraisal report (Kaiyuan pingbao Zi [2016] No. 1-068) issued by Kaiyuan Assets Appraisal Co., Ltd. with March 31, 2016 as the appraisal base date, the appraisal value of 100% equity of Zhongda Yingcai determined by the income method is 261162300 yuan. The transaction amount of the company’s purchase of 70% equity of CUHK talents
It is 182 million yuan, and the difference between the fair value of identifiable net assets of 168132 million yuan on the acquisition date of Zhongda talents (March 1, 2017) enjoyed by Kaiyuan instrument company is recognized as goodwill of 1651868 million yuan.
(3) The company acquired 56% equity of Shanghai Tianhu education and training Co., Ltd. (hereinafter referred to as “Tianhu education”). According to the appraisal report (Kaiyuan pingbao Zi [2017] No. 1-112) issued by Kaiyuan Assets Appraisal Co., Ltd. with June 30, 2017 as the appraisal base date, the appraisal value of 100% equity of Tianhu education determined by the income method is RMB 211234100. The transaction amount of the company’s purchase of 56% equity of Tianhu education is 117.6 million yuan, and the difference between the fair value share of 5.7332 million yuan of identifiable net assets of Tianhu education enjoyed by Kaiyuan instrument company on the benchmark date is recognized as goodwill, i.e. 1118668 million yuan. On January 1, 2018, Tianhu education acquired its subsidiary Xuhui Branch, adding a goodwill of 4.8855 million yuan. Considering that the assets of Tianhu education and its subsidiaries cannot be separated, the company regards Tianhu itself and its directly subordinate campuses as a unified asset group, and the goodwill of Tianhu education asset group is 1167522 million yuan.
2. Composition of the above goodwill book balance unit: Yuan
Project Shanghai Hengqi education and training CUHK (Beijing) online education and Training Shanghai Tianhu education and training
Asset group of Co., Ltd. asset group of Education Technology Co., Ltd. asset group of Co., Ltd
Book balance of goodwill 1110315865721651868119511675224750
3. Reasons for withdrawing goodwill impairment provision
Due to the continuous and repeated regional impact of covid-19 epidemic in 2021, the further intensification of competition in the vocational education market and the actual operation of the company’s vocational education sector, the company judged that each subsidiary of the acquired education sector had signs of goodwill impairment provision.
In order to truly reflect the asset value and financial status of the company, in accordance with the relevant provisions of accounting supervision risk tips No. 8 – goodwill impairment, accounting standards for business enterprises and the company’s accounting policies, in accordance with the principle of prudence and in combination with the actual situation, the company has hired Kaiyuan Asset Appraisal Co., Ltd. to provide training for Hengqi education, Zhongda talents The recoverable value of the goodwill related asset groups of Tianhu education as of the benchmark date of December 31, 2021 has been evaluated, and the evaluation reports of Kaiyuan pingbao Zi [2022] No. 0346, Kaiyuan pingbao Zi [2022] No. 0315 and Kaiyuan pingbao Zi [2021] No. 0365 have been issued. The estimated future cash flow present values of the related asset groups of Hengqi education, Zhongda Yingcai and Tianhu education on the benchmark date of evaluation are 359.87 million yuan, 119.6 million yuan and 162.85 million yuan. Based on the above evaluation results, the goodwill impairment reserves of Hengqi education and Tianhu education related asset groups to be accrued by the company in 2021 are 355598 million yuan and 369153 million yuan respectively, of which the goodwill impairment losses attributable to the company should be recognized are 355598 million yuan and 206726 million yuan respectively
4. Goodwill impairment test
① Information related to the asset group or asset group combination where the goodwill is located unit: Yuan
Project assets group of Hengqi education company assets group of Zhongda Yingcai company assets group of Shanghai Tianhu company
Book balance of goodwill ① 1110315865721651868119511675224750
Balance of provision for impairment of goodwill ② 8312750946793520790532509988821
Book value of goodwill ③ = ① – 2790407710571666021429165235929
②
Unconfirmed attributable to minority shares 30714009186817396738
Goodwill value of East Equity ④
Adjusted book value of goodwill 27904077105102380030 Sinotrans Limited(601598) 2632667
Value ⑤ = ③ + ④
Book value of asset group ⑥ 1163890404011079169673993900055
Assets including overall goodwill 395429811451134592 Maiquer Group Co.Ltd(002719) 976532722
Group book value ⑦ = ⑤ + ⑥
359870 Ping An Bank Co.Ltd(000001) 1960 Ping An Bank Co.Ltd(000001) 6285000000 of asset group including goodwill
Recoverable amount ⑧
Impairment loss ⑨ = ⑦ – ⑧ 3555981145 0.003691532722
Including: goodwill to be recognized minus 3555981145 0.003691532722
Loss value ⑩ = if (⑨ ⑤, ⑤, ⑨)
The equity share of the company is 100.00%, 70.00%, 56.00%
(11)
Goodwill to be recognized by the company minus 3555981145 0. Zhejiang Jingxing Paper Joint Stock Co.Ltd(002067) 258324
Value loss (12) = (11) × ⑩
② Process, method and conclusion of goodwill impairment test
The recoverable amount of goodwill is calculated according to the present value of the estimated future cash flow. The estimated cash flow is based on the cash flow forecast for the period 20222026 approved by the company. The discount rate used in the cash flow forecast is 15.04% (2020: 14.25%), 15.36% (2020: 15.36%) for Zhongda Yingcai and 14.72% (2020: 14.92%) for Tianhu education, The cash flow after the forecast period is consistent with that in the fifth year.
Other key data used in the impairment test include: estimated selling price, sales volume, operating cost and other related expenses. The company determines the above key data based on historical experience and market development forecast. The discount rate adopted by the company is the pre tax interest rate that reflects the time value of money in the current market and the specific risks of relevant asset groups.
According to the appraisal report (Kaiyuan pingbao Zi [2022] No. 0346) issued by Kaiyuan Asset Appraisal Co., Ltd. engaged by the company, the recoverable amount of Hengqi education asset group portfolio including goodwill is 35987000000 yuan, which is lower than the book value of 39542981145 yuan. In this period, the impairment loss of goodwill should be recognized as 3555981145 yuan, Among them, the impairment loss of goodwill attributable to the company should be recognized is 3555981145 yuan.
According to the appraisal report issued by Kaiyuan Asset Appraisal Co., Ltd. (Kaiyuan pingbao Zi [2022] No. 0315), the recoverable amount of Zhongda Yingcai asset group including goodwill is 119 Shanghai Pudong Development Bank Co.Ltd(600000) 0 yuan, the book value is 11345920027 yuan, and there is no impairment loss of goodwill.
According to the appraisal report (Kaiyuan pingbao Zi [2022] No. 0365) issued by Kaiyuan Asset Appraisal Co., Ltd. engaged by the company, the recoverable amount of Tianhu education asset group portfolio including goodwill is 16285000000 yuan, which is lower than the book value of 19976532722 yuan. The goodwill impairment loss of 3691532722 yuan should be recognized in the current period, including 2067258324 yuan of goodwill impairment loss attributable to the company. 2、 Impact of the provision for impairment of goodwill on the company
As of December 31, 2021, the original value of the company’s goodwill was 141422595889 yuan, and the accumulated provision for goodwill impairment was 102809920182 yuan. During the reporting period, the company made a total provision for goodwill impairment of 5623239469 yuan. The above impairment loss will be included in the company’s profit and loss in 2021, and the company’s profit in 2021 will be reduced accordingly, resulting in a corresponding decrease of 5623239469 yuan in the net profit attributable to the shareholders of the parent company in the consolidated statement of 2021. After the withdrawal, the book value of goodwill is 38612675707 yuan. The provision for impairment of goodwill will be reflected in the company’s 2021 annual report. 3、 Explanation on the rationality of the provision for goodwill impairment this time
The provision for impairment of goodwill is made based on the principle of prudence and the actual situation of the company in accordance with the relevant provisions of the accounting standards for business enterprises and the relevant accounting policies of the company. The basis is sufficient and reasonable. After the provision for goodwill impairment is made, the company’s 2021 financial statements can more fairly reflect the company’s financial position, asset value and operating results as of December 31, 2021.
4、 Review and approval procedures and relevant opinions
(I) opinions of the board of directors
On April 28, 2022, the company held the 23rd Meeting of the Fourth Board of directors, deliberated and approved the proposal on withdrawing the provision for goodwill impairment, and agreed to withdraw the above goodwill impairment of 562324 million yuan individually. This matter needs to be submitted to the 2021 annual general meeting of shareholders of the company for deliberation and voting.
(II) opinions of independent directors
The company’s provision for impairment of goodwill is made based on the principle of prudence, which meets the requirements of relevant laws, regulations and regulatory rules and the actual situation of the company’s assets. After the provision for impairment is made, it can more fairly reflect the company’s financial situation and operating results. The decision-making procedure of withdrawing goodwill impairment provision this time complies with the provisions of relevant laws, regulations and the articles of association. Therefore, it is agreed to withdraw the provision for goodwill impairment this time and submit it to the company in 2021
