Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Sep. 30, 2014 | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | FALSE |
Document Period End Date | 30-Sep-14 |
Document Fiscal Year Focus | 2014 |
Document Fiscal Period Focus | FY |
Trading Symbol | DL |
Entity Registrant Name | CHINA DISTANCE EDUCATION HOLDINGS LTD |
Entity Central Index Key | 1438644 |
Current Fiscal Year End Date | -21 |
Entity Well-known Seasoned Issuer | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Common Stock, Shares Outstanding | 142,752,873 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $118,075 | $71,919 |
Term deposits | 5,702 | 817 |
Restricted cash | 16,637 | 6 |
Accounts receivable, net of allowance for doubtful accounts of US$1,773 and US$1,250 as of September 30, 2013 and 2014, respectively | 1,637 | 3,518 |
Inventories | 449 | 698 |
Prepayment and other current assets | 3,749 | 4,087 |
Deferred tax assets, current portion | 2,116 | 1,751 |
Deferred cost | 1,248 | 1,889 |
Total current assets | 149,613 | 84,685 |
Non-current assets | ||
Property, plant and equipment, net | 10,721 | 10,202 |
Goodwill | 7,689 | 7,711 |
Other intangible assets, net | 1,384 | 1,476 |
Deposit for purchase of non-current assets | 94 | 374 |
Other non-current assets | 2,128 | 1,546 |
Total non-current assets | 22,016 | 21,309 |
Total assets | 171,629 | 105,994 |
Current liabilities | ||
Bank borrowing | 16,583 | |
Accrued expenses and other liabilities (including accrued expenses and other liabilities of the consolidated VIE without recourse to China Distance Education Holdings Limited of US$13,361 and US$ 21,275 as of September 30, 2013 and 2014, respectively) | 22,695 | 15,072 |
Income tax payable (including income tax payable of the consolidated VIE without recourse to China Distance Education Holdings Limited of US$3,661 and US$ 3,504 as of September 30, 2013 and 2014, respectively) | 4,209 | 4,282 |
Deferred revenue (including deferred revenue of the consolidated VIE without recourse to China Distance Education Holdings Limited of US$17,120 and US$23,319 as of September 30, 2013 and 2014, respectively) | 23,423 | 17,143 |
Refundable fees (including refundable fees of the consolidated VIE without recourse to China Distance Education Holdings Limited of US$4,300 and US$5,199 as of September 30, 2013 and 2014, respectively) | 5,199 | 4,300 |
Total current liabilities | 72,109 | 40,797 |
Non-current liabilities | ||
Deferred tax liabilities, non-current portion | 1,110 | 677 |
Total non-current liabilities | 1,110 | 677 |
Total liabilities | 73,219 | 41,474 |
Commitments and contingencies (Note 18) | ||
Equity | ||
Ordinary shares (par value of US$0.0001 per share at September 30, 2013 and 2014, respectively; Authorized - 480,000,000 and 500,000,000 shares at September 30, 2013 and 2014; Issued and outstanding - 135,532,141 and 142,752,873 shares at September 30, 2013 and 2014, respectively) | 14 | 14 |
Additional paid-in capital | 77,270 | 46,742 |
Accumulated other comprehensive income | 6,220 | 6,295 |
Retained earnings | 14,906 | 11,469 |
Total equity | 98,410 | 64,520 |
Total liabilities and equity | $171,629 | $105,994 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Accounts receivable, net of allowance for doubtful accounts | $1,250 | $1,773 |
Accrued expenses and other liabilities | 22,695 | 15,072 |
Income tax payable | 4,209 | 4,282 |
Deferred revenue | 23,423 | 17,143 |
Refundable fees | 5,199 | 4,300 |
Ordinary shares, par value | $0.00 | $0.00 |
Ordinary shares, Authorized | 500,000,000 | 480,000,000 |
Ordinary shares, Issued | 142,752,873 | 135,532,141 |
Ordinary shares, outstanding | 142,752,873 | 135,532,141 |
Variable Interest Entity, Primary Beneficiary | ||
Accrued expenses and other liabilities | 21,275 | 13,361 |
Income tax payable | 3,504 | 3,661 |
Deferred revenue | 23,319 | 17,120 |
Refundable fees | $5,199 | $4,300 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Sales, net of business tax, value-added tax and related surcharges | |||
Online education services | $80,545 | $58,573 | $40,281 |
Books and reference materials | 6,392 | 5,129 | 4,438 |
Others | 10,259 | 7,658 | 7,383 |
Total net revenues | 97,196 | 71,360 | 52,102 |
Cost of sales | |||
Cost of services | -35,187 | -27,073 | -20,494 |
Cost of tangible goods sold | -4,616 | -2,844 | -2,587 |
Total cost of sales | -39,803 | -29,917 | -23,081 |
Gross profit | 57,393 | 41,443 | 29,021 |
Operating expenses | |||
Selling expenses | -21,445 | -15,673 | -11,337 |
General and administrative expenses | -11,645 | -9,806 | -8,248 |
Total operating expenses | -33,090 | -25,479 | -19,585 |
Other operating income | 253 | 59 | 58 |
Operating income (loss) | 24,556 | 16,023 | 9,494 |
Interest income | 2,964 | 1,415 | 1,119 |
Interest expense | -291 | ||
Exchange gain/(loss) | 232 | -77 | -40 |
Income before income taxes | 27,461 | 17,361 | 10,573 |
Less: Income tax expense | -4,052 | -3,797 | -2,600 |
Net income from continuing operations | 23,409 | 13,564 | 7,973 |
Net income from discontinued operations | 236 | ||
Net income | 23,409 | 13,564 | 8,209 |
Net income from continuing operations | 23,409 | 13,564 | 7,973 |
Net income from discontinued operations | 236 | ||
Net income | $23,409 | $13,564 | $8,209 |
Net income attributable to ordinary shareholders | |||
Basic from continuing operations | $0.17 | $0.10 | $0.06 |
Basic from discontinued operations | $0 | ||
Basic | $0.17 | $0.10 | $0.06 |
Diluted from continuing operations | $0.17 | $0.10 | $0.06 |
Diluted from discontinued operations | $0 | ||
Diluted | $0.17 | $0.10 | $0.06 |
Weighted average shares used in calculating net income per share | |||
Basic | 139,613,967 | 135,174,562 | 133,996,737 |
Diluted | 140,497,204 | 136,399,233 | 134,363,108 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Net income | $23,409 | $13,564 | $8,209 |
Other comprehensive (loss) / income - change in cumulative foreign currency translation adjustments | -75 | 1,373 | 701 |
Comprehensive income | $23,334 | $14,937 | $8,910 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (USD $) | Total | Start-up training business | Gaokao re-take business | Ordinary shares | Additional paid-in capital | Additional paid-in capital | Additional paid-in capital | Accumulated other comprehensive income | Retained earnings/ (Cumulative deficits) |
In Thousands, except Share data | Start-up training business | Gaokao re-take business | |||||||
Beginning Balance at Sep. 30, 2011 | $72,734 | $13 | $78,804 | $4,221 | ($10,304) | ||||
Beginning Balance (in shares) at Sep. 30, 2011 | 127,800,673 | ||||||||
Net income for the year | 8,209 | 8,209 | |||||||
Foreign currency translation adjustments | 701 | 701 | |||||||
Repurchase of ordinary shares (in shares) | -1,285,464 | ||||||||
Repurchase of ordinary shares | -993 | -993 | |||||||
Options exercised (in shares) | 7,871,640 | ||||||||
Options exercised | 3,981 | 3,981 | |||||||
Stock-based compensation expense (Note 21) | 141 | 141 | |||||||
Dividends (Note 22) | -16,268 | -16,268 | |||||||
Repayment of loan to optionees in connection with exercise of options | -3,888 | -3,888 | |||||||
Ending Balance at Sep. 30, 2012 | 64,617 | 13 | 61,777 | 4,922 | -2,095 | ||||
Ending Balance (in shares) at Sep. 30, 2012 | 134,386,849 | ||||||||
Net income for the year | 13,564 | 13,564 | |||||||
Foreign currency translation adjustments | 1,373 | 1,373 | |||||||
Repurchase of ordinary shares (in shares) | -67,100 | ||||||||
Repurchase of ordinary shares | -93 | -93 | |||||||
Options exercised (in shares) | 987,392 | ||||||||
Options exercised | 603 | 1 | 602 | ||||||
Stock-based compensation expense (in shares)(Note 23) | 225,000 | ||||||||
Stock-based compensation expense (Note 21) | 625 | 625 | |||||||
Dividends (Note 22) | -16,056 | -16,056 | |||||||
Repayment of loan to optionees in connection with exercise of options | -113 | -113 | |||||||
Ending Balance at Sep. 30, 2013 | 64,520 | 14 | 46,742 | 6,295 | 11,469 | ||||
Ending Balance (in shares) at Sep. 30, 2013 | 135,532,141 | ||||||||
Net income for the year | 23,409 | 23,409 | |||||||
Foreign currency translation adjustments | -75 | -75 | |||||||
Issuance of new ordinary shares (in shares) | 6,000,000 | ||||||||
Issuance of new ordinary shares (Note 14) | 29,088 | 29,088 | |||||||
Options exercised (in shares) | 1,095,732 | ||||||||
Options exercised | 491 | 491 | |||||||
Stock-based compensation expense (in shares)(Note 23) | 125,000 | ||||||||
Stock-based compensation expense (Note 21) | 503 | 503 | |||||||
Dividends (Note 22) | -20,258 | -286 | -19,972 | ||||||
Repayment of loan to optionees in connection with exercise of options | 732 | 732 | |||||||
Ending Balance at Sep. 30, 2014 | $98,410 | $14 | $77,270 | $6,220 | $14,906 | ||||
Ending Balance (in shares) at Sep. 30, 2014 | 142,752,873 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $23,409 | $13,564 | $8,209 |
Adjustments to reconcile net income to net cash generated from operating activities: | |||
Stock-based compensation | 503 | 625 | 141 |
Gain on disposition of the discontinued operation | -297 | ||
Depreciation of property, plant and equipment | 1,808 | 1,848 | 1,606 |
Amortization of other intangible assets | 592 | 771 | 873 |
Provision of inventories | 527 | 67 | 41 |
(Reduction in allowance) provision for doubtful accounts | -517 | -371 | 211 |
Losses on disposition of property, plant and equipment | 112 | 151 | 9 |
Changes in operating assets and liabilities: | |||
Decrease in accounts receivable | 2,385 | 1,036 | 434 |
(Increase) in inventories | -281 | -89 | -328 |
Decrease (increase) in prepayments and other assets | 327 | -420 | -679 |
(Increase) decrease in deferred tax assets | -370 | 154 | -35 |
Decrease (increase) in deferred cost | 635 | -45 | 99 |
(Increase) in other non-current assets | -586 | -422 | -348 |
Increase in accrued expenses and other liabilities | 7,944 | 5,132 | 2,827 |
(Decrease) increase in income tax payable | -60 | 1,567 | 261 |
Increase in deferred revenue | 6,321 | 7,360 | 578 |
Increase in refundable fees | 910 | 674 | 898 |
Increase in deferred tax liabilities | 434 | 536 | 563 |
Net cash generated from operating activities | 44,093 | 32,138 | 15,063 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Maturity (purchase) of term deposits | -4,880 | 7,275 | |
(Placement) Withdrawal of restricted cash | -16,607 | 2,670 | |
Acquisition of property, plant and equipment | -2,241 | -2,128 | -1,662 |
Disposal of the discontinued operation, net of cash disposed | -150 | ||
Acquisition of other intangible assets | -452 | -271 | -387 |
Payment of deposit for the acquisition of non-current assets | -370 | ||
Net cash (used in) generated from investing activities | -24,180 | 4,506 | 471 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Bank borrowing | 16,062 | ||
Issuance of new ordinary shares | 29,088 | ||
Repurchase of ordinary shares | -93 | -993 | |
Proceeds from share options exercised by employees | 491 | 603 | 3,981 |
Loan to optionees in connection with exercise of options | -510 | -408 | -3,888 |
Repayment of loan to optionees in connection with exercise of options | 1,242 | 295 | |
Dividends paid to shareholders | -20,258 | -16,056 | -16,268 |
Net cash generated from (used in) financing activities | 26,115 | -15,659 | -17,168 |
Exchange rate effect on cash and cash equivalents | 128 | 1,211 | 410 |
Net increase (decrease) in cash and cash equivalents | 46,156 | 22,196 | -1,224 |
Cash and cash equivalents at beginning of the year | 71,919 | 49,723 | 50,947 |
Cash and cash equivalents at end of the year | 118,075 | 71,919 | 49,723 |
Supplemental schedule of cash flows information | |||
Income tax paid | -4,049 | -1,539 | -1,818 |
Supplemental schedule of non-cash activities | |||
Acquisition of property, plant and equipment and other intangible assets through utilization of deposits | 280 | 133 | 111 |
Income tax reversal | $782 |
ORGANIZATION_AND_BASIS_OF_PRES
ORGANIZATION AND BASIS OF PRESENTATION | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
ORGANIZATION AND BASIS OF PRESENTATION | 1 | ORGANIZATION AND BASIS OF PRESENTATION | |||||||||||
China Distance Education Holdings Limited (the “Company”) was incorporated under the law of the Cayman Islands on January 11, 2008. The Company, its subsidiaries, its consolidated variable interest entity (“VIE”) and VIE’s subsidiaries (collectively the “Group”) are primarily engaged in providing online and offline education services, and selling related products in the People’s Republic of China (“PRC”). | |||||||||||||
As of September 30, 2014, details of the Company’s subsidiaries, its VIE and VIE’s subsidiaries were as follows: | |||||||||||||
Company | Date of | Place of | Percentage of | Principal activities | |||||||||
establishment | legal ownership | ||||||||||||
establishment | by the Company | ||||||||||||
Subsidiaries: | |||||||||||||
China Distance Education Limited (“CDEL Hong Kong”) | 13-Mar-03 | Hong Kong | 100 | % | Investment holding and provision of education services | ||||||||
Practice Enterprises Network China International Links Limited (“Pencil”) | 23-Feb-10 | Hong Kong | 100 | % | Inactive | ||||||||
DL Education Service, LLC (“DL Education”) | September 27,2012 | US | 100 | % | Inactive | ||||||||
Beijing Champion Distance Education Technology Co., Ltd. (“Champion Technology”) | 5-Jan-04 | PRC | 100 | % | Provision of technical support and consultancy services and course production | ||||||||
Beijing Champion Education Technology Co., Ltd. (“Champion Education Technology”) | 23-Apr-07 | PRC | 100 | % | Software licensing and course production | ||||||||
Variable interest entity: | |||||||||||||
Beijing Champion Hi-Tech Co., Ltd. (“Beijing Champion”) | 12-Jul-00 | PRC | Nil | Provision of online education services and sales of books and reference materials | |||||||||
Subsidiaries of variable interest entity: | |||||||||||||
Beijing Caikaowang Company Ltd. (“Caikaowang”) | 28-Nov-07 | PRC | Nil | Provision of online education services | |||||||||
Beijing Champion Wangge Education Technology Co., Ltd. (“Champion Wangge”) | 24-Jun-08 | PRC | Nil | Provision of online education services | |||||||||
Beijing Zhengbao Yucai Education Technology Co., Ltd. (“Zhengbao Yucai”) | 19-Feb-09 | PRC | Nil | Provision of start-up training services | |||||||||
Beijing Haidian District Champion Training School (“Champion Training School”) | 19-Feb-09 | PRC | Nil | Provision of online and offline education services | |||||||||
The VIE arrangements | |||||||||||||
There are some uncertainties as to whether applicable PRC laws and regulations prohibit foreign investors from providing telecommunications value-added services in the PRC. As a Cayman Islands corporation, the Company is deemed a foreign legal person under PRC laws. Accordingly, Champion Technology, the Company’s wholly owned subsidiary in the PRC, as a foreign invested company, may be deemed to be ineligible to engage in education business in the PRC. | |||||||||||||
To comply with these foreign ownership restrictions, the Company operates substantially all of its online education services through its VIE, Beijing Champion, and the VIE’s subsidiaries in the PRC. The VIE and its subsidiaries hold leases and other assets necessary to provide online education services and generate all of the Company’s revenues. To provide the Company effective control over the VIE and the ability to receive substantially all of the economic benefits of the VIE and its subsidiaries, a series of contractual arrangements were entered into amongst CDEL Hong Kong, Champion Technology, Beijing Champion and Beijing Champion’s direct equity holders. | |||||||||||||
• | Agreements that transfer economic benefits to Champion Technology | ||||||||||||
Exclusive technical support and consultancy services agreement | |||||||||||||
Pursuant to the exclusive technical support and consultancy services agreement between Beijing Champion and Champion Technology, Champion Technology has the exclusive right to provide to Beijing Champion technical and consulting services. Champion Technology is entitled to charge Beijing Champion a service fee equal to its profit before such service fee and tax. This agreement will remain effective until Beijing Champion ceases its operations. | |||||||||||||
Equity pledge agreement | |||||||||||||
Pursuant to the equity pledge agreement between Beijing Champion and Champion Technology, the nominee shareholders of Beijing Champion have pledged their equity interest in Beijing Champion to Champion Technology to secure the payment obligations of Beijing Champion under the technical support and consultancy services agreement between Beijing Champion and Champion Technology. If Beijing Champion breaches its contractual obligations under that agreement, Champion Technology, as the pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. The nominee shareholders of Beijing Champion agree that, without prior written consent of Champion Technology, they will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests that would prejudice Champion Technology’s interest. This agreement will remain effective until the discharge of Beijing Champion’s contractual obligations under the exclusive technical support and consultancy services agreement as described above. | |||||||||||||
Letter of undertaking from Beijing Champion’s shareholders to Champion Technology | |||||||||||||
Pursuant to this letter addressed to Champion Technology, the shareholders of Beijing Champion undertook to, unless restricted by laws, regulations or legal procedures, (i) remit all dividends, interests, other distributions or remnant assets after liquidation, if any, they receive from Beijing Champion to Champion Technology without compensation, after paying the corresponding tax and any other required expenses, (ii) transfer all or part of their equity interests to CDEL Hong Kong at a nominal or minimal purchase price, in the event CDEL Hong Kong exercises its exclusive purchase right to acquire any or all of the equity interests in Beijing Champion, (iii) remit to Champion Technology all considerations they may receive from CDEL Hong Kong’s acquisition of any equity interests in Beijing Champion, without compensation, after paying the corresponding tax and any other required expenses and (iv) act in the best interest of Champion Technology. | |||||||||||||
• | Agreements that provide Company effective control over Beijing Champion | ||||||||||||
Exclusive purchase right contract | |||||||||||||
Pursuant to the exclusive purchase right agreement, CDEL Hong Kong has the unconditional right to purchase the entire equity interest in, or all the assets of Beijing Champion, for a purchase price equal to the net assets of Beijing Champion or the minimum price permitted by PRC laws, if and when PRC laws are amended to permit such a transaction. The term of this agreement is ten years from the date thereof and can be extended for another ten years, at the discretion of CDEL Hong Kong. On December 19, 2014, CDEL Hong Kong decided to extend the term of this agreement for another ten years and retroactively acknowledged the validity of this agreement for the period from May 9, 2014 to December 19, 2014. Through the exclusive purchase right contract, each of Beijing Champion’s shareholders irrevocably granted CDEL Hong Kong an exclusive right to acquire, at any time, for its own account or through one or more PRC individuals or entities as nominee shareholders of its choice to replace the existing shareholders of Beijing Champion. This kick-out right reinforces CDEL Hong Kong’s ability to direct the activities that most significantly impact Beijing Champion’s economic performance. | |||||||||||||
Power of attorney | |||||||||||||
Pursuant to the power of attorney, the nominee shareholders of Beijing Champion each executed an irrevocable power of attorney assigning Champion Technology or any person designated by Champion Technology as their attorney-in-fact to vote on their behalf on all matters of Beijing Champion requiring shareholder approval under PRC laws and regulations and the articles of association of Beijing Champion. | |||||||||||||
The Articles of Incorporation of Beijing Champion states that the major rights of the shareholders include the power to review and approve annual budget, operating strategy and investment plan, elect the members of board of directors and approve their compensation plan. Therefore, through the irrevocable power of attorney arrangement, Champion Technology has the ability to exercise effective control over Beijing Champion through equity holder votes and, through such votes, to also control the composition of the board of directors. | |||||||||||||
Deed of undertaking: | |||||||||||||
The Company, Mr. Zhengdong Zhu and his wife, Ms. Baohong Yin executed a deed of undertaking (“Deed”) on September 26, 2013. | |||||||||||||
Pursuant to this deed, Mr. Zhengdong Zhu and Ms. Baohong irrevocably covenanted and undertaking to the Company to abstain from (1) utilizing their status as majority shareholders of the Company to vote for the appointment or removal of a director of the Company and (2) any matters related to the Deed. This deed was terminated automatically upon the completion of the follow-on public offering on March 11, 2014 as Mr. Zhengdong Zhu and Ms. Baohong Yin no longer owned a majority of outstanding ordinary shares after the follow-on public offering. | |||||||||||||
These contractual arrangements allow the Group to effectively control Beijing Champion and its subsidiaries and to derive substantially all of the economic benefits from them. Accordingly, the Group treats Beijing Champion as a VIE and because the Group is the primary beneficiary of Beijing Champion, the Group has consolidated the financial results of Beijing Champion and its subsidiaries. | |||||||||||||
• | Risks in relation to VIE structure | ||||||||||||
The Company believes that the contractual arrangements with Beijing Champion and its shareholders are in compliance with existing PRC laws and regulations and are valid, binding and enforceable and will not result in any violation of PRC laws or regulations and the PRC regulatory authorities may take a contrary view. If the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the regulatory authorities may exercise their discretion and: | |||||||||||||
• | revoke the business and operating licenses of the Company’s PRC subsidiaries or consolidated affiliated entities; | ||||||||||||
• | restrict the rights to collect revenues from any of the Company’s PRC subsidiaries; | ||||||||||||
• | discontinue or restrict the operations of any related-party transactions among the Company’s PRC subsidiaries or consolidated affiliated entities; | ||||||||||||
• | require the Company’s PRC subsidiaries or consolidated affiliated entities to restructure the relevant ownership structure or operations; | ||||||||||||
• | take other regulatory or enforcement action is, including levying fines that could be harmful to the Company’s business; or | ||||||||||||
• | impose additional conditions or requirements with which the Company may not be able to comply. | ||||||||||||
The imposition of any of these penalties may result in a material adverse effect on the Company’s ability to conduct its business. In addition, if the imposition of any of these penalties causes the Company to lose the rights to direct the activities of the VIE and their subsidiaries or the right to receive their economic benefits, the Company would no longer be able to consolidate the financial results of the VIE and its subsidiaries. | |||||||||||||
The Company’s ability to control Beijing Champion also depends on the powers of attorney that enable Champion Technology to vote on all matters requiring shareholder approval for Beijing Champion. As noted above, the Company believes these powers of attorney are valid, binding and enforceable under existing PRC laws and regulations but may not be as effective as direct equity ownership. | |||||||||||||
Certain shareholders of Beijing Champion are also beneficial owners or directors of the Company. In addition, certain beneficial owners and directors of the Company are also directors or officers of Beijing Champion. Their interests as beneficial owners of Beijing Champion may differ from the interests of the Company as a whole. The Company cannot be certain that if conflicts of interest arise, these parties will act in the best interests of the Company or that conflicts of interests will resolve in the Company’s favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest these parties may encounter in their capacity as beneficial owners of Beijing Champion, on one hand, and as beneficial owners of the Company, on the other hand. The Company believes the shareholders of Beijing Champion will not act contrary to any of the contractual arrangements and the exclusive purchase right contract provides the Company with a mechanism to remove them as shareholders of Beijing Champion should they act to the detriment of the Company. If any conflict of interest or dispute between the Company and the shareholders of Beijing Champion arises and the Company is unable to resolve it, the Company would have to rely on legal proceedings in the PRC. Such legal proceedings could result in disruption of its business; moreover, there is substantial uncertainty as to the ultimate outcome of any such legal proceedings. | |||||||||||||
The Group’s online education business has been directly operated by (and as a result all of the Group’s revenues have been generated from) the VIE and its subsidiaries. For the years ended September 30, 2013 and 2014, Beijing Champion and its subsidiaries accounted for an aggregate of 68% and 61%, respectively, of the Group’s consolidated total assets, and 93% and 73%, respectively of the Group’s consolidated total liabilities. The assets not associated with Beijing Champion and its subsidiaries in these years primarily consisted of cash held by China Distance Education Holdings Limited. | |||||||||||||
The following financial information of the Company’s VIE and VIE’s subsidiaries as of September 30, 2013 and 2014 and for each of the three years in the period ended September 30, 2014 was included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances within VIE and VIE’s subsidiaries: | |||||||||||||
As of September 30, | |||||||||||||
2013 | 2014 | ||||||||||||
US$ | US$ | ||||||||||||
Cash and cash equivalents | 39,706 | 75,117 | |||||||||||
Prepayment and other current assets | 3,839 | 3,100 | |||||||||||
Total current assets | 54,575 | 87,205 | |||||||||||
Total assets | 72,515 | 104,569 | |||||||||||
Deferred revenue | 17,120 | 23,319 | |||||||||||
Total current liabilities | 38,442 | 53,297 | |||||||||||
Total liabilities | 38,442 | 53,297 | |||||||||||
Total equity | 34,073 | 51,272 | |||||||||||
For the years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Revenues | 52,005 | 70,942 | 96,990 | ||||||||||
Net income (1) | 14,944 | 21,062 | 31,986 | ||||||||||
Net cash provided by operating activities | 6,958 | 25,755 | 36,326 | ||||||||||
Net cash (used in)/provided by investing activities | 549 | (2,521 | ) | (850 | ) | ||||||||
Effects of exchange rate changes | 183 | 674 | (65 | ) | |||||||||
-1 | This is net income before service fees charged by Champion Technology and Champion Education Technology. | ||||||||||||
There are no consolidated VIE’s assets that are collateral for the VIE’s obligations and which can only be used to settle the VIE’s obligations. No creditor (or beneficial interest holders) of the VIE have recourse to the general credit of the Company or any of its consolidated subsidiaries. No terms in any arrangements, considering both explicit arrangements and implicit variable interests, require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE ever needs financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to the VIE through loans to the shareholders of the VIE or entrustment loans to the VIE. | |||||||||||||
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
SIGNIFICANT ACCOUNTING POLICIES | 2 | SIGNIFICANT ACCOUNTING POLICIES | |||
Basis of presentation and use of estimates | |||||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | |||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in the Group’s financial statements include, but are not limited to, revenue recognition, consolidation of VIE, income tax, allowance for doubtful accounts, impairment of goodwill and long-term assets and share-based compensation expenses. Actual results could materially differ from those estimates. | |||||
The effect of discontinued operations has been reflected in certain accounts in the consolidated financial statements for the year ended September 30, 2011 as described in Note 3. | |||||
Principles of consolidation | |||||
The consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIE and VIE’s subsidiaries. All transactions and balances among the Company, its subsidiaries, its VIE and VIE’s subsidiaries have been eliminated upon consolidation. | |||||
Foreign currency translation and transactions | |||||
The Company, DL Education, CDEL Hong Kong and Pencil’s functional currencies are United States dollars (“US$”). The Company’s PRC subsidiaries, VIE and VIE’s subsidiaries determine their functional currencies to be the Chinese Renminbi (“RMB”). The Company uses the US$ as its reporting currency and uses the monthly average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position of its PRC subsidiaries and its variable interest entities, respectively. Translation differences are recorded in accumulated other comprehensive income, a component of consolidated statements of changes in equity. | |||||
Transactions denominated in foreign currencies are remeasured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are remeasured at the balance sheet date exchange rate. Exchange gains and losses are included in the consolidated statements of comprehensive income. | |||||
Cash and cash equivalents | |||||
Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have an original maturity of three months or less when purchased. | |||||
Term deposits | |||||
Term deposits consist of deposits placed with financial institutions with an original maturity of greater than three months and less than one year. | |||||
Restricted cash | |||||
Restricted cash represents deposits not readily available to the Company. Restricted cash as of September 30, 2014 mainly represented cash pledged as security of bank borrowing. | |||||
Inventories | |||||
Inventories, consisting of paper and professional examination reference books, are stated at the lower of cost or market value. Cost is determined using the first in, first out method. | |||||
Fair value | |||||
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: | |||||
Level 1 | |||||
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. | |||||
Level 2 | |||||
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | |||||
Level 3 | |||||
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. | |||||
The Group’s financial instruments consist of cash equivalents, term deposits, restricted cash, accounts receivable, other current assets, and other current liabilities. The carrying amounts of these instruments approximate their fair values due to their short-term maturity. | |||||
The Group reviews goodwill for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, other intangible assets, and other long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow. | |||||
Allowance for doubtful accounts | |||||
An allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable based on an assessment of specific evidence indicating doubtful collection, historical experience, account balance aging and prevailing economic conditions. Accounts receivable balances are written off after all collection efforts have been exhausted. | |||||
Property, plant and equipment, net | |||||
Property, plant and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: | |||||
Category | Estimated useful life | Estimated residual value | |||
Buildings | 35 years | 5-10% | |||
Electronic and office equipment | 5 years | 5-10% | |||
Motor vehicles | 5 years | 5-10% | |||
Leasehold improvement and building improvement | Shorter of lease term or 5 years | — | |||
Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterment that extends the useful lives of property, plant and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of operations. | |||||
Goodwill | |||||
Goodwill is not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that it might be impaired. | |||||
The excess of the purchase price over the fair value of net assets acquired is recorded on the consolidated balance sheet as goodwill. In September 2011, the FASB issued an authoritative pronouncement related to testing goodwill for impairment. The guidance permits the Company to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Absent from any impairment indicators, the Group performs its annual impairment test on the last day of each fiscal year. | |||||
For the years ended September 30, 2013 and 2014, the Group performed its annual impairment test using a two-step approach. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired and the second step is not required. If the fair value of the reporting unit is less than its carrying amount, the second step of the impairment test measures the amount of the impairment loss, if any, by comparing the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess. The implied fair value of goodwill is calculated in the same manner that goodwill is calculated in a business combination, whereby the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit, with the excess purchase price over the amounts assigned to assets and liabilities representing the implied fair value of goodwill. | |||||
Other intangible assets, net | |||||
Other intangible assets are amortized using the straight-line basis over the estimated useful lives as follows: | |||||
Category | Estimated useful life | ||||
Computer software | 3~5 years | ||||
Trademarks and domain names | 10~11 years | ||||
Courseware | 1~5 years | ||||
Website | 5 years | ||||
Business contracts | 3~5 years | ||||
Copyrights | 5 years | ||||
Platform | 3.5 years | ||||
Impairment of long-lived assets | |||||
The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets. | |||||
If the intent is to hold the asset for sale and certain other criteria are met (i.e., the asset can be disposed of currently, appropriate levels of authority have approved sale, and there is an actively pursuing buyer), the impairment test is a comparison of the asset’s carrying value to its fair value less costs to sell. To the extent that the carrying value is greater than the asset’s fair value less costs to sell, an impairment loss is recognized for the difference. Assets held for sale are separately presented on the balance sheet and are no longer depreciated. | |||||
Revenue recognition | |||||
Revenues are recognized when the following four criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the service has been rendered, (iii) the fees are fixed or determinable, and (iv) collectability is reasonably assured. | |||||
Online education services | |||||
The online education service provided by the Group to its customers is an integrated service, including audio-video course content, mock examinations and online chat rooms during the subscription period. Audio-video course content, mock examinations and online chat rooms are not practical to be sold on standalone basis and have never been sold separately. | |||||
The Group earns revenues by providing online education services to customers pursuant to two types of revenue models - non-refundable course model and refundable course model. | |||||
The on-line courses using the non-refundable course model are mainly comprised of regular classes and premium classes. The revenues for the regular classes are recognized on a straight line basis over the subscription period from the month in which the customers enroll in the courses to the month in which subscribed courses terminate. For premium classes, if participants fail to pass the course examination and certain pre-agreed conditions are met, the participants can be offered by certain course fee discount to retake the same premium course. As such, the discount is proportionately applied as a deduction to revenue recognized for each of the premium classes that participants take. | |||||
For on-line courses using the refundable course model (i.e. elite classes), if the participants complete the courses and fail the professional exams and their scores are within a range provided for in the agreement, they are entitled to either a full refund or the right to retake the course. The participants must notify the Group within a pre-agreed period after the professional examinations scores are released in order to be eligible for the refund or the right to retake the course. The proceeds from the refundable course model are initially recorded as “refundable fees”. Revenues are recognized upon the expiration of the participants’ right to receive a refund or ratably over the retake course period when the participants decide to retake the course before the expiration of such right. | |||||
Most of the course participants pay course fees via online payment systems provided by third parties including internet debit or credit card payment systems and other third-party payment systems. Some participants may choose to enroll for on-line courses through the use of prepaid study cards which are purchased from distributors. The Group sells to its regional distributors prepaid study cards at a discount to the face value of the cards. Revenues are recorded using the after-discount-selling-price of the cards and recognized over the period the on-line course is available to the customers, which generally is from the enrollment date to the completion of the relevant professional examination date. Sales of prepaid study cards that are not activated for course enrollment are recognized as revenues upon expiration of the cards. Prepaid study cards that have been activated but have not been used to enroll on-line courses do not have an expiry date and will be deferred until they are used to enroll in on-line courses. Participants who enroll with the Company directly are eligible to a refund within a 7-day trial period. Revenues from direct enrollment with the Company are recognized over the period from the lapse of the 7-day trial period to the completion of the relevant professional examination date. | |||||
The Group may, at times, offer volume discounts to its regional distributors for purchases over a specified amount of prepaid cards during a specified period of time, generally, one year. The amount of future rebates relating to these volume discounts cannot be reasonably estimated and accordingly a deferred revenue balance is recognized for the maximum potential amount of volume discount. If the number of purchases specified in the volume discount provisions is not reached upon the expiry of the volume discount period, the deferred revenue relating to such volume discount for each study card is recognized as revenue over the remaining period the on-line course is available to the user who enrolls using the study card or recognized as revenue immediately if the related on-line course has been completed or the study card has expired. | |||||
The Group provides student recruiting services and online platform to government agencies which use the Group’s online platform to conduct continuing education services. The Group earns service fees as a percentage of total tuition fees based on the agreements entered into with the government agencies. Service fees are initially recorded as deferred revenue and are recognized as revenue when course participants complete the stipulated study hours and take the examinations, or on a straight line basis over the subscription period based on the terms of the agreements. | |||||
The Group also operates an Online Open Learning Platform, a proprietary education platform that allows other parties to share their educational content or deliver live courses online. After passing the Group’s quality control reviews, experts and scholars of various fields can either record their own lectures and post them on the Open Learning Platform website, or deliver real-time audio-video courses. The group offers coaching services to these lecturers and deploys a user evaluation system to ensure that these courses meet its quality and effectiveness standards. The Group pays the experts and scholars certain percentage of the service fee they received from the end users. Revenues from Open Learning Platform are recognized on gross basis, as the Group is the primary obligor in the arrangement and bears the risks and rewards, including the quality control and the services delivered. | |||||
For the years ended September 30, 2012, 2013 and 2014, the Group recognized revenues before business tax and related surcharges in connection with expired study cards amounted to US$113, US$164, and US$114, respectively. | |||||
The on-line courses service is provided by Beijing Champion and its subsidiaries which are subject to approximately 3% business tax and related surcharges. The Group records revenues net of these taxes in the consolidated statements of operations. Such business tax and related surcharges for the years ended September 30, 2012, 2013 and 2014 were US$1,331, US$1,986 and US$2,699 respectively. | |||||
Books and reference materials | |||||
The Group sells books and reference materials to distributors and end users. Revenues relating to such sales are deferred until cash is collected. Inventory costs of products delivered to distributors for which revenues have been deferred are presented as “deferred costs” on the consolidated balance sheets. | |||||
The Group also sells books and reference materials together with study cards which allow the customers to take a certain number of on-line courses for no additional charge. These sales are considered arrangements with two deliverables, consisting of the delivery of books and reference material and the on-line courses service. Because neither vendor-specific objective evidence nor third-party evidence of fair value of the deliverables exist, the Group allocates revenue to each deliverables based on their relative selling price. | |||||
Other revenues | |||||
Other revenues include sales of offline professional training, courseware production services, platform production services, and others. | |||||
Revenues from offline professional training are recognized when the training courses are provided. For offline training sponsored by government authorities, the tuition fees of the training participants are subsidized by the government. Qualified enrollments and the fees to be earned cannot be determined until the confirmation from government authorities regarding the number of students and fees is received by the Company, which is after the completion of services. Therefore, revenues from such services are recognized upon cash receipt or the receipt of confirmations from government authorities, whichever is earlier, when all the other revenue recognition criteria have been met. | |||||
Revenues from sales of courseware, which are designed and developed pursuant to the requests from customers, are recognized when the courseware or platforms are accepted by the customers. The Company has no significant remaining obligation with respect to the courseware or platforms upon the acceptance of the customers. | |||||
From time to time, the Group enters into arrangement to provide the development and maintenance of online platforms to its customers. After the development of online platforms, the Group provides support and maintenance services. The development of online platform and the support and maintenance services have never been sold separately and they do not have standalone value to the customers. Accordingly, revenues from such arrangement is accounted as a single unit of accounting and recognized ratably over the support and maintenance services period. | |||||
Revenues from other services, including magazine content production, advertising and consulting services, are recognized over the period when such services are provided. | |||||
Value added taxes | |||||
On January 1, 2012, the PRC Ministry of Finance and the State Administration of Taxation officially launched a pilot value-added tax (“VAT”) reform program (“Pilot Program”), applicable to businesses in selected industries. Businesses in the Pilot Program would pay VAT instead of business tax. The Pilot Program initially applied only to transportation industry and “modern service industries” (“Pilot Industries”) in Shanghai and subsequently was expanded to ten other provinces and municipalities between August and December 2012. | |||||
As a result, since September 1, 2012, technical and consulting service, software licensing and course production services provided by Champion Technology and Champion Education Technology, and since July 1, 2014, course production services provided by Champion Wangge were no longer subject to business tax but VAT instead. Champion Technology is VAT general taxpayer. Champion Education Technology was VAT small-scale taxpayer but was treated as general taxpayer since February 1, 2014. Champion Wangge was qualified as small-scale taxpayer since July 1, 2014. The applicable VAT rates are 6% and 3% for the entities that are general taxpayer and small-scale taxpayer, respectively. | |||||
Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in the line item of accrued expenses and other current liabilities on the consolidated balance sheets. | |||||
Pursuant to a circular jointly released by Ministry of Finance and State Administration of Taxation on December 25, 2013, the Group is subject to a VAT exemption for the proceeds received from customers for sales related to books and reference materials till December 31, 2017. As a result, the Group registered a tax exemption application at state tax bureau in February 2014 and started to enjoy such tax exemption for the relevant sales since March 2014. Prior to the filling of tax exemption application in February 2014, the Group was subject to VAT generally at a rate of 13% on the proceeds received for the sales of books and reference materials. | |||||
Cost of sales | |||||
Cost of online education services primarily includes the production costs of study cards, server and bandwidth leasing fees, lecturer fees, staff costs involved in the operation of online education services including network operation and maintenance, course production and tutor services and other direct costs of providing these services. These costs are expensed when incurred. | |||||
The cost of books and reference materials, including direct materials used for production of books, authorship fee and printing cost, are initially deferred and recorded as “deferred cost”. The deferred costs are recognized as cost of sales when the related revenue is recognized upon cash receipt. | |||||
Advertising expenditure | |||||
Advertising expenditure is expensed when incurred and are included in “selling expenses” in the consolidated statements of operations. Advertising expenses from continuing operations were US$2,112, US$3,167 and US$6,464, and those from discontinued operations were US$26, US$ nil and US$ nil, for the years ended September 30, 2012, 2013 and 2014, respectively. | |||||
Shipping and handling costs | |||||
Shipping and handling costs of books and reference materials are classified as a component of “selling expenses” in the consolidated statements of operations. Shipping and handling costs classified as selling expenses from continuing operations were US$252, US$489 and US$703, and those from discontinued operations were US$1, US$nil and US$nil, for the years ended September 30, 2012, 2013 and 2014, respectively. | |||||
Income taxes | |||||
Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. The impact of an uncertain income tax position is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. | |||||
Share-based compensation | |||||
Share-based compensation with employees is measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, with a corresponding addition to paid-in capital. The Group recognizes compensation expense over the vesting term on a straight-line basis with the amount of compensation expense recognized at any date not less than the portion of the grant-date value of the option vested at that date. | |||||
Share-based compensation with non-employee is measured based on the fair value of options at the earlier of the performance commitment date or the date at which the non-employee’s performance is complete (hereafter referred to as the measurement date). The Group recognizes compensation expense using the graded vesting attribution method. | |||||
Share-based compensation awards which require the issuance of a variable number of shares to settle a fixed monetary amount are accounted for as liabilities. | |||||
Net income per share | |||||
Basic net income per share is computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period. Nonvested restricted shares are also participating securities as they enjoy identical dividend rights as ordinary shares. Accordingly, the Group uses the two-class method whereby undistributed net income is allocated on a pro rata basis to each participating share to the extent that each class may share in income for the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. The dilutive effect of outstanding share-based awards is reflected in the diluted net income per share by application of the treasury stock method. | |||||
Comprehensive income | |||||
Comprehensive income includes net income and foreign currency translation adjustments and is reported in the consolidated statements of comprehensive income. | |||||
Significant risks and uncertainties | |||||
Foreign currency risk | |||||
RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The cash and cash equivalents of the Group from the continuing operations included aggregate amounts of US$68,867 and US$110,342, which were denominated in RMB, at September 30, 2013 and 2014, respectively, representing 95.8% and 93.5% of the cash and cash equivalents at September 30, 2013 and 2014, respectively. | |||||
Concentration of credit risk | |||||
Financial instrument that potentially expose the Group to significant concentration of credit risk primarily consist of cash and cash equivalents, term deposits, restricted cash, accounts receivable and prepayment and other current assets. As of September 30, 2014, substantially all of the Group’s cash and cash equivalents, term deposits and restricted cash were deposited in financial institutions located in the PRC and Hong Kong. Accounts receivable are typically unsecured and are derived from revenue earned from customers in the PRC. The risk with respect to accounts receivable is mitigated by credit evaluations the Group performs on its customers and its ongoing monitoring process of outstanding balances. | |||||
There are no revenues from customers which individually represent greater than 10% of the total net revenues for any year of the three years period ended September 30, 2014. | |||||
Primarily due to the long payment cycles of government agencies, the Group had one customer that accounted for 31.4% and 21.7% of the Group’s carrying amount of accounts receivable as of September 30, 2013 and September 30, 2014 respectively. | |||||
Recently issued accounting pronouncements not yet adopted | |||||
In April, 2014, the FASB issued Accounting Standard Update 2014-08, which amends the definition of a discontinued operation in ASC 205-20 and requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued-operations criteria. The new guidance eliminates the second and third criteria of discontinued operation in ASC 205-20-45-1 and instead requires discontinued-operations treatment for disposals of a component or group of components that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results. The ASU also expands the scope of ASC 205-20 to disposals of equity method investments and businesses that, upon initial acquisition, qualify as held for sale. | |||||
The ASU also requires entities to reclassify assets and liabilities of a discontinued operation for all comparative periods presented in the statement of financial position. | |||||
Regarding the statement of cash flows, an entity must disclose, in all periods presented, either (1) operating and investing cash flows or (2) depreciation and amortization, capital expenditures, and significant operating and investing noncash items related to the discontinued operation. | |||||
The ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014. Early adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. | |||||
In May 2014, the FASB issued, ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry-specific guidance, in current U.S. generally accepted accounting principles. | |||||
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: | |||||
• | Step 1: Identify the contract(s) with a customer. | ||||
• | Step 2: Identify the performance obligations in the contract. | ||||
• | Step 3: Determine the transaction price. | ||||
• | Step 4: Allocate the transaction price to the performance obligations in the contract. | ||||
• | Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | ||||
The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Group is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements. | |||||
In June 2014, the FASB issued a new pronouncement which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. | |||||
The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. | |||||
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
DISCONTINUED OPERATIONS | 3 | DISCONTINUED OPERATIONS | |||
On September 30, 2009, Champion Wangge acquired the Gaokao retake business from Mr. Junnan Ye and Mr. Xiujie Hu, two third-party individuals. The acquired business is operated by Champion Xinlixiang, an entity established by Champion Wangge. Since such business has been in a loss position, on September 27, 2011, the Company decided to discontinue the operations of Gaokao retake business and put the related assets and business up for sale. | |||||
On May 4, 2012, the Company completed the sale of this operation for total cash proceeds of US$157. The assets sold consisted primarily of cash and cash equivalents, accounts receivable, property and equipment, prepayment and other assets. The buyer also assumed certain income tax payable, deferred revenue and accrued liabilities and other liabilities. | |||||
The following is a summary of the assets and liabilities sold as of May 4, 2012 and the related gain on disposal: | |||||
Disposed as of | |||||
May 4, | |||||
2012 | |||||
US$ | |||||
Current assets of discontinued operations: | |||||
Cash and cash equivalents | 312 | ||||
Accounts receivable, net | 14 | ||||
Prepayment and other current assets | 324 | ||||
650 | |||||
Current liabilities of discontinued operations: | |||||
Accrued expenses and other liabilities | 348 | ||||
Income tax payable | 128 | ||||
Deferred revenue, current portion | 314 | ||||
790 | |||||
Net liabilities disposed | (140 | ) | |||
Cash proceeds | 157 | ||||
Gain on disposition of the discontinued operation | 297 | ||||
Summarized operating results from the discontinued operations included in the Group’s consolidated statements of operations were as follows for the year ended September 30, 2012: | |||||
Year ended | |||||
September 30, | |||||
2012 | |||||
US$ | |||||
Revenues | 1,045 | ||||
Pre-tax (loss) from discontinued operations | (61 | ) | |||
Income tax expense | — | ||||
(Loss) from discontinued operations, net of tax | (61 | ) | |||
Gain on disposal of discontinued operation | 297 | ||||
Net income from discontinued operations attributable to China Distance Education Holding Limited, net of tax | 236 | ||||
All notes to the accompanying consolidated financial statements have reflected the effect of the discontinued operations, where applicable. |
ACCOUNTS_RECEIVABLE_NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
ACCOUNTS RECEIVABLE, NET | 4 | ACCOUNTS RECEIVABLE, NET | |||||||
Accounts receivable, net consisted of the following: | |||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Accounts receivable | 5,291 | 2,887 | |||||||
Less: allowance for doubtful accounts | (1,773 | ) | (1,250 | ) | |||||
Accounts receivable, net | 3,518 | 1,637 | |||||||
Movement of allowance for doubtful accounts was as follows: | |||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Balance at beginning of year | 2,092 | 1,773 | |||||||
Reversal of the allowance for doubtful accounts | (371 | ) | (517 | ) | |||||
Foreign currency adjustment | 52 | (6 | ) | ||||||
Balance at end of the year | 1,773 | 1,250 | |||||||
INVENTORIES_NET
INVENTORIES, NET | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
INVENTORIES, NET | 5 | INVENTORIES, NET | |||||||
Inventories consisted of the following: | |||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Books and other goods | 708 | 968 | |||||||
Paper and other raw materials | 102 | 121 | |||||||
Less: inventory provisions for slow-moving and obsolescence | (112 | ) | (640 | ) | |||||
698 | 449 | ||||||||
Inventories provision made in the years ended September 30, 2012, 2013 and 2014 were US$41, US$67 and US$527, respectively. |
PREPAYMENT_AND_OTHER_CURRENT_A
PREPAYMENT AND OTHER CURRENT ASSETS | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
PREPAYMENT AND OTHER CURRENT ASSETS | 6 | PREPAYMENT AND OTHER CURRENT ASSETS | |||||||||
Prepayment and other current assets consisted of the following: | |||||||||||
As of September 30, | |||||||||||
Notes | 2013 | 2014 | |||||||||
US$ | US$ | ||||||||||
Advance to the suppliers | -1 | 1,873 | 766 | ||||||||
Prepaid expenses | 1,034 | 1,669 | |||||||||
Interest receivable | 24 | 369 | |||||||||
Current portion of receivables related to ITAT program (Note 11) | 285 | — | |||||||||
Funds receivable | -2 | 285 | 306 | ||||||||
Deposits | 11 | 23 | |||||||||
Others | 575 | 616 | |||||||||
Prepayment and other current assets, net | 4,087 | 3,749 | |||||||||
-1 | Advance to the suppliers represents interest-free cash deposits paid to suppliers for future purchase of raw materials and finished goods. The risk of loss arising from non-performance by or bankruptcy of the suppliers is assessed prior to making the deposits and is monitored on a regular basis by management. A charge to cost of sales will be recorded in the period in which a loss incurs. To date, the Group has not experienced any loss of advances to suppliers. | ||||||||||
-2 | Funds receivable arise due to the time taken to clear customers’ payment transactions through external payment networks. When customers remit fees to the Group via external payment networks using their bank account or credit card, there is a clearing period before the cash is received by the Group which usually takes one to three business days. These fees are treated as a receivable until the cash is received. |
PROPERTY_PLANT_AND_EQUIPMENT_N
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 7 | PROPERTY, PLANT AND EQUIPMENT, NET | |||||||
Property, plant and equipment consisted of the following: | |||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Buildings | 6,051 | 6,033 | |||||||
Electronic and office equipment | 9,523 | 9,896 | |||||||
Leasehold improvement and building improvement | 681 | 511 | |||||||
Motor vehicles | 1,164 | 1,563 | |||||||
Total | 17,419 | 18,003 | |||||||
Less: Accumulated depreciation | (7,217 | ) | (7,282 | ) | |||||
10,202 | 10,721 | ||||||||
Depreciation expenses from continuing operations were US$1,606, US$1,848 and US$1,808, and from discontinued operations were US$ nil, nil and nil, for the years ended September 30, 2012, 2013 and 2014, respectively. |
GOODWILL
GOODWILL | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
GOODWILL | 8 | GOODWILL | |||||||||||||||||||||||
Goodwill was comprised of the following: | |||||||||||||||||||||||||
Years ended September 30 | |||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||
Online | Start-up | Total | Online | Start-up | Total | ||||||||||||||||||||
education | training | education | training | ||||||||||||||||||||||
service | service | service | service | ||||||||||||||||||||||
US$ | US$ | US$ | US$ | US$ | US$ | ||||||||||||||||||||
Gross amount | |||||||||||||||||||||||||
Beginning balance | 5,726 | 1,785 | 7,511 | 5,880 | 1,831 | 7,711 | |||||||||||||||||||
Exchange difference | 154 | 46 | 200 | (17 | ) | (5 | ) | (22 | ) | ||||||||||||||||
Ending balance | 5,880 | 1,831 | 7,711 | 5,863 | 1,826 | 7,689 | |||||||||||||||||||
Accumulated impairment loss | — | — | — | — | — | — | |||||||||||||||||||
Goodwill, net | 5,880 | 1,831 | 7,711 | 5,863 | 1,826 | 7,689 | |||||||||||||||||||
The Group tested its goodwill for impairment at the following reporting units level. | |||||||||||||||||||||||||
Online education service - This reporting unit provides online education services to its customers located in the PRC and Hong Kong. It includes all the subsidiaries, the VIE and VIE’s subsidiaries of the Group except for Zhengbao Yucai. The goodwill arising from the acquisitions of the entities under this reporting unit is fully allocated to this reporting unit. | |||||||||||||||||||||||||
Start-up training service - This reporting unit provides start-up training services to the Group’s customers located the PRC. It includes Zhengbao Yucai. The goodwill arising from the acquisitions of Zhengbao Yucai is fully allocated to this reporting unit. | |||||||||||||||||||||||||
Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired. The Group did not record any impairment of goodwill on online education service and start-up training service for the years ended September 30, 2012, 2013 and 2014. |
OTHER_INTANGIBLE_ASSETS_NET
OTHER INTANGIBLE ASSETS, NET | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
OTHER INTANGIBLE ASSETS, NET | 9 | OTHER INTANGIBLE ASSETS, NET | |||||||
Excluding those that had been fully amortized as of September 30, 2013 and 2014, respectively, other intangible assets consisted of the following: | |||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Computer software | 2,978 | 3,428 | |||||||
Trademarks and domain names | 1,456 | 1,499 | |||||||
Courseware | 488 | 486 | |||||||
Business contracts | 531 | 530 | |||||||
Copyrights | 664 | 662 | |||||||
Platform | 217 | 217 | |||||||
Total intangible assets | 6,334 | 6,822 | |||||||
Less: Accumulated amortization | |||||||||
Computer software | (2,275 | ) | (2,595 | ) | |||||
Trademarks and domain names | (840 | ) | (952 | ) | |||||
Courseware | (462 | ) | (486 | ) | |||||
Business contracts | (494 | ) | (530 | ) | |||||
Copyrights | (600 | ) | (658 | ) | |||||
Platform | (187 | ) | (217 | ) | |||||
Accumulated amortization | (4,858 | ) | (5,438 | ) | |||||
Intangible assets, net | 1,476 | 1,384 | |||||||
Amortization expenses from continuing operations were US$873, US$771 and US$592 and from discontinued operations were nil, for the years ended September 30, 2012, 2013 and 2014, respectively. | |||||||||
The estimated amortization expenses for the above other intangible assets for each of the following fiscal years are as follows: | |||||||||
Amortization | |||||||||
US$ | |||||||||
2015 | 410 | ||||||||
2016 | 363 | ||||||||
2017 | 296 | ||||||||
2018 | 168 | ||||||||
2019 | 95 | ||||||||
2020 and thereafter | 52 | ||||||||
1,384 | |||||||||
DEPOSITS_FOR_PURCHASE_OF_NONCU
DEPOSITS FOR PURCHASE OF NON-CURRENT ASSETS | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
DEPOSITS FOR PURCHASE OF NON-CURRENT ASSETS | 10 | DEPOSITS FOR PURCHASE OF NON-CURRENT ASSETS | |||||||
Deposits for purchase of non-current assets consisted of the following: | |||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Deposit for purchase of property, plant and equipment and other intangible assets | 374 | 94 | |||||||
374 | 94 | ||||||||
OTHER_NONCURRENT_ASSETS
OTHER NON-CURRENT ASSETS | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
OTHER NON-CURRENT ASSETS | 11 | OTHER NON-CURRENT ASSETS | |||||||||
Other non-current assets consisted of the following: | |||||||||||
As of September 30, | |||||||||||
2013 | 2014 | ||||||||||
US$ | US$ | ||||||||||
Long-term prepaid expenses | -1 | 1,207 | 1,903 | ||||||||
Long-term receivables related to ITAT program | -2 | 171 | — | ||||||||
Rental deposits | -3 | 168 | 225 | ||||||||
1,546 | 2,128 | ||||||||||
-1 | Long-term prepaid expenses represent golf club membership fee. The amortization of the long term prepaid expenses was made within a ten-year amortizing period and was recorded as “general and administrative expenses” on the consolidated statements of operations. | ||||||||||
-2 | Long-term receivables represent the non-current portion of prepaid service fee for obtaining government authorization to provide the ITAT program, an information technique application training program, for ten years, starting from 2010. The group amortized such prepayment on a straight-line basis. In 2013, the Group ceased a series of cooperation on ITAT program. As of September 30, 2014, the receivables related to ITAT program, including current portion and non-current portion had been fully settled. | ||||||||||
-3 | Rental deposits represent office rental deposits for the Group’s daily operations. These deposits are classified as non-current deposits since they will not be refunded within one year. |
ACCRUED_EXPENSES_AND_OTHER_LIA
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 | ACCRUED EXPENSES AND OTHER LIABILITIES | |||||||
The components of accrued expenses and other liabilities are as follows: | |||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Accrued expenses | 2,795 | 3,726 | |||||||
Salary and welfare payable | 2,775 | 5,222 | |||||||
Tuition fee payables to government agencies | 5,132 | 10,096 | |||||||
Remuneration payable to lecturers | 2,314 | 1,802 | |||||||
Uncertain income tax liabilities (Note 16) | 177 | 177 | |||||||
Payables to employees in connection with options exercise | 458 | 94 | |||||||
Other payable | 1,421 | 1,578 | |||||||
15,072 | 22,695 | ||||||||
Tuition fee payable to government agencies mainly represents the portion of tuition fee collected by the Group on behalf of the government agencies which provide certain continuing education courses and the Group is only responsible for the student recruiting and provision of online platform and shares certain percentage of fee tuition as service fees. |
BANK_BORROWING
BANK BORROWING | 12 Months Ended | |
Sep. 30, 2014 | ||
BANK BORROWING | 13 | BANK BORROWING |
On December 6, 2013, CDEL Hong Kong entered into a loan agreement with Deutsche Bank, AG, Singapore Branch, for a RMB100 million, approximately US$16 million, term loan facility with an 2.40% annual interest rate for a term of 18 months. The facility was secured by a term deposit of RMB100 million provided by Champion Technology, which was recorded as “restricted cash” on balance sheet as of September 30, 2014. As of September 30, 2014, such bank borrowing would mature within 12 months and accordingly was recorded as short-term liability. |
ORDINARY_SHARES
ORDINARY SHARES | 12 Months Ended | |
Sep. 30, 2014 | ||
ORDINARY SHARES | 14 | ORDINARY SHARES |
Under the share repurchase programs approved by the Company’s board of directors on November 20, 2008 and April 29, 2011, the Company is authorized to repurchase up to US$20 million worth of its issued and outstanding ADSs from time to time in open-market transactions on NYSE. During the years ended September 30, 2012, 2013 and 2014, the Company repurchased 1,285,464, 67,100 and nil ordinary shares at total considerations of US$993, US$93 and US$nil, respectively. Such shares were immediately canceled after the repurchase. | ||
On March 11, 2014, the Company completed a follow-on public offering of ADSs by the Company and certain selling shareholders. Through the follow-on public offering the Company issued and sold 6,000,000 ordinary shares, representing 1,500,000 ADSs at the price of US$21.00 per ADS. The net proceeds received by the Company, after deducting underwriting commissions and other professional service fees, amounted to US$29,088. |
RESTRICTED_NET_ASSETS
RESTRICTED NET ASSETS | 12 Months Ended | |
Sep. 30, 2014 | ||
RESTRICTED NET ASSETS | 15 | RESTRICTED NET ASSETS |
Relevant PRC statutory laws and regulations permit payments of dividends by the Group’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries. | ||
In accordance with the Regulations on Enterprises with Foreign Investment of China and their articles of association, a foreign invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts, which is included in retained earnings accounts in equity section of the consolidated balance sheets. A wholly-owned foreign invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve reaches 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. Champion Technology and Champion Education Technology were established as wholly-owned foreign invested enterprises and therefore are subject to the above mandated restrictions on distributable profits. | ||
Additionally, in accordance with the Company Law of the PRC, a domestic enterprise is required to provide statutory common reserve at least 10% of its annual after-tax profit until such reserve reaches 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. A domestic enterprise is also required to provide for discretionary surplus reserve, at the discretion of the board of directors, from the profits determined in accordance with the enterprise’s PRC statutory accounts. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. | ||
Because the Group’s entities in the PRC can only be paid out of distributable profits reported in accordance with PRC accounting standards, the Group’s entities in the PRC are restricted from transferring a portion of their net assets to the Company. The restricted amounts include the paid-in capital and statutory reserves of the Group’s entities in the PRC. The aggregate amount of paid-in capital and statutory reserves, which represented the amount of net assets of the Group’s entities in the PRC (mainland) not available for distribution, were US$23,457and US$23,581, as of September 30, 2013 and 2014, respectively. |
INCOME_TAX
INCOME TAX | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
INCOME TAX | 16 | INCOME TAX | |||||||||||
Cayman Islands | |||||||||||||
Under current law of Cayman Islands, the Company is not subject to income or capital gains taxes. In addition, dividends payments are not subject to tax withholding in the Cayman Islands. | |||||||||||||
The United States | |||||||||||||
DL Education was established in the United States and is inactive in the years ended September 30, 2013 and 2014. Therefore there is no income that is subject to the U.S. federal income taxes and state income taxes. | |||||||||||||
Hong Kong | |||||||||||||
CDEL Hong Kong and Pencil have not recorded tax provision for Hong Kong profits tax as the companies have not had assessable profits arising in or derived from Hong Kong. | |||||||||||||
China | |||||||||||||
The Enterprise Income Tax Law (the “EIT Law”) of the PRC, which took effect on January 1, 2008, applies a uniform 25% enterprise income tax rate to all resident enterprise in China, including foreign invested enterprises. | |||||||||||||
Since 2008, Beijing Champion and Champion Technology qualified as “high and new technology enterprise strongly supported by the State” (“HNTE”) under the EIT Law, and therefore, were entitled to preferential income tax rates. In October 2011, Beijing Champion and Champion Technology renewed the HNTE qualification, and therefore, were continually entitled to the preferential income tax rate of 15% in years 2011 through 2013. As of September 30, 2014, Beijing Champion and Champion Technology were in the process to renew HNTE qualification. The Group believes Beijing Champion and Champion Technology will most likely be qualified as HNTE and accordingly be entitled to a preferential income tax rate of 15% in the years from 2014 through 2016. As a result, the Group applied 15% to determine the tax liabilities for these two entities. | |||||||||||||
Since 2012, Zhengbao Yucai obtained HNTE qualification and therefore, was entitled to preferential income tax rate of 15% in years 2012 through 2014. | |||||||||||||
Under the EIT Law and its implementation rules, a withholding tax at 10%, unless reduced by a tax treaty or arrangement, is applied on dividends received by non-PRC-resident corporate investors from PRC-resident enterprises, such as the Company’s PRC subsidiaries. Undistributed earnings prior to January 1, 2008 are exempt from such withholding tax. Under the China-HK | |||||||||||||
Tax Arrangement and the relevant regulations, a qualified Hong Kong tax resident which is the “beneficial owner” and holds 25% equity interests or more of a PRC enterprise is entitled to a reduced withholding rate of 5%. The Company believes that CDEL Hong Kong qualifies for the 5% withholding tax rate. CDEL Hong Kong’s deferred tax liabilities related to potential withholding tax were US$905 and US$1,276 as of September 30, 2013 and 2014, respectively, on the undistributed earnings from its investment in the PRC entities generated after January 1, 2008. And the related income tax expenses were US$634, US$271 and US$371 for the years ended September 30, 2012, 2013 and 2014, respectively. | |||||||||||||
In general, the PRC tax authorities have up to five years to conduct examinations of the PRC entities’ tax filings. Accordingly, the PRC entities’ tax years from 2009 to 2013 remain subject to examination by the tax authorities and US$782 was reversed for the unpaid tax liability that was accrued before 2009 tax year. | |||||||||||||
Income before income taxes from continuing operations consisted of: | |||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Non - PRC | (1,252 | ) | (2,003 | ) | (1,757 | ) | |||||||
PRC | 11,825 | 19,364 | 29,218 | ||||||||||
10,573 | 17,361 | 27,461 | |||||||||||
The current and deferred components of the income tax expense from continuing operations appearing in the consolidated statements of operations are as follows: | |||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Current tax expense | 2,074 | 3,107 | 3,988 | ||||||||||
Deferred tax expense | 526 | 690 | 64 | ||||||||||
2,600 | 3,797 | 4,052 | |||||||||||
The reconciliation of the effective tax rate and the statutory income tax rate applicable to PRC operations is as follows: | |||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Income before taxes | 10,573 | 17,361 | 27,461 | ||||||||||
Income tax expense computed a applicable tax rates of 25% | 2,643 | 4,340 | 6,865 | ||||||||||
Effect of different tax rates in different jurisdictions | 255 | 440 | 357 | ||||||||||
Non-deductible expenses | 59 | 75 | 94 | ||||||||||
Effect of tax holidays | (1,037 | ) | (1,740 | ) | (2,888 | ) | |||||||
Effect of valuation allowances | 51 | 194 | 33 | ||||||||||
Effect of tax rate changes | — | 237 | — | ||||||||||
Withholding tax on undistributed earnings | 629 | 251 | 373 | ||||||||||
Income tax reversal | — | — | (782 | ) | |||||||||
2,600 | 3,797 | 4,052 | |||||||||||
Effective income tax rate | 24.59 | % | 21.87 | % | 14.76 | % | |||||||
The aggregate amount and per share effect of the tax holidays are as follows: | |||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
The aggregate amount of tax holidays | 1,037 | 1,740 | 2,888 | ||||||||||
The aggregate effect on basic and diluted net income per share: | |||||||||||||
- Basic | 0.01 | 0.01 | 0.02 | ||||||||||
- Diluted | 0.01 | 0.01 | 0.02 | ||||||||||
Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred taxes from continuing operations are as follows: | |||||||||||||
As of September 30, | |||||||||||||
2013 | 2014 | ||||||||||||
US$ | US$ | ||||||||||||
Current deferred tax assets | |||||||||||||
Payroll payable | 409 | 794 | |||||||||||
Accrued expenses | 585 | 599 | |||||||||||
Allowance for doubtful accounts | 518 | 546 | |||||||||||
Net operating loss carry-forwards | 289 | 255 | |||||||||||
Total current deferred tax assets | 1,801 | 2,194 | |||||||||||
Less: valuation allowance | (50 | ) | (78 | ) | |||||||||
Current deferred tax assets, net | 1,751 | 2,116 | |||||||||||
Non-current deferred tax assets | |||||||||||||
Intangible assets | 48 | 19 | |||||||||||
Property, plant and equipment | 148 | 140 | |||||||||||
Net operating loss carry-forwards | 372 | 314 | |||||||||||
Total non-current deferred tax assets | 568 | 473 | |||||||||||
Less: valuation allowance | (262 | ) | (268 | ) | |||||||||
Non-current deferred tax assets, net | 306 | 205 | |||||||||||
Non-current deferred tax liabilities | |||||||||||||
Intangible assets | 78 | 39 | |||||||||||
Withholding tax on undistributed earnings | 905 | 1,276 | |||||||||||
Total non-current deferred tax liabilities | 983 | 1,315 | |||||||||||
The authoritative guidance requires that the Group recognizes the impact of a tax position in the financial statements if that position is more likely than not of being sustained upon audit by the tax authority, based on the technical merits of the position. Under PRC laws and regulations, arrangements and transactions among related parties may be subject to examination by the PRC tax authorities. If the PRC tax authorities determine that the contractual arrangements among related companies do not represent a price under normal commercial terms, they may make adjustments to the companies’ income and expenses. A transfer pricing adjustment could result in additional tax liabilities. | |||||||||||||
As a result of the Group’s assessment of its tax positions, the unrecognized tax benefit related to transfer price position prior to the year 2009 was recorded at US$173, US$177 and US$177 as of September 30, 2012, 2013 and 2014, respectively. The subsequent changes of the unrecognized tax benefit were due to foreign currency adjustment. | |||||||||||||
Reconciliation of accrued unrecognized tax benefits is as follows: | |||||||||||||
Unrecognized | |||||||||||||
tax benefits | |||||||||||||
Balance - September 30, 2012 | 173 | ||||||||||||
Foreign currency adjustment | 4 | ||||||||||||
Balance - September 30, 2013 | 177 | ||||||||||||
Foreign currency adjustment | — | ||||||||||||
Balance - September 30, 2014 | 177 | ||||||||||||
The Group does not anticipate any significant change in unrecognized tax benefits within 12 months from September 30, 2014. | |||||||||||||
In addition, uncertainties exist with respect to how the current income tax law in the PRC applies to the Group’s overall operations, and more specifically, with regard to tax residency status. The New EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the New EIT Law provide that non-resident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting and properties, occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income taxes, at a rate of 25%. |
EMPLOYEE_DEFINED_CONTRIBUTION_
EMPLOYEE DEFINED CONTRIBUTION PLAN | 12 Months Ended | |
Sep. 30, 2014 | ||
EMPLOYEE DEFINED CONTRIBUTION PLAN | 17 | EMPLOYEE DEFINED CONTRIBUTION PLAN |
Full time employees of the Group in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the PRC subsidiaries of the Group make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The Group has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were US$3,199, US$3,910 and US$5,331 for the years ended September 30, 2012, 2013 and 2014, respectively. Employee benefits from continuing operations were US$3,164, US$3,910 and US$5,331, and from discontinued operations were US$35, US$ nil and US$ nil for the years ended September 30, 2012, 2013 and 2014, respectively. | ||
Obligations for contributions to defined contribution retirement plans for full-time employee in Hong Kong, including contributions payable under the Hong Kong Mandatory Provident Fund Schemes Ordinance, are recognized as expenses in the consolidated statements of operations as incurred. The total amounts for such employee benefits were US$2, US$2 and US$2 for the years ended September 30, 2012, 2013 and 2014, respectively, which were included in continuing operations. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
COMMITMENTS AND CONTINGENCIES | 18 | COMMITMENTS AND CONTINGENCIES | |||
Operating lease commitments | |||||
Future minimum payments under non-cancelable operating leases related to offices, servers and bandwidth with initial terms of one-year or more consisted of the following at September 30, 2014: | |||||
US$ | |||||
Years ending September 30, | |||||
2015 | 3,389 | ||||
2016 | 193 | ||||
2017 | 11 | ||||
2018 | — | ||||
2019 | — | ||||
3,593 | |||||
Payments under operating leases are expensed on the straight-line basis over the periods of their respective leases. The terms of the leases do not contain rent escalation or contingent rents. For the years ended September 30, 2012, 2013 and 2014, total rental expenses from continuing operations for all operating leases amounted to US$3,346, US$3,904 and US$5,786, respectively. Rental expenses from discontinued operations for all operating leases amounted to US$314, US$ nil and US$ nil, respectively. | |||||
Legal contingencies | |||||
The group is a party in potential claims arising in the ordinary course of business. The Group does not believe that the resolution of these matters will have a material effect on its financial position or results of operations. | |||||
Assets pledged as security for bank borrowing | |||||
As disclosed in Note 13, on December 6, 2013, CDEL Hong Kong entered into a loan agreement for a RMB100 million, approximately US$16 million, term loan facility. The facility was secured by a term deposit of RMB100 million provided by Champion Technology, which was recorded as “restricted cash” on the consolidated balance sheet as of September 30, 2014. |
SEGMENT_REPORTING
SEGMENT REPORTING | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
SEGMENT REPORTING | 19 | SEGMENT REPORTING | |||||||||||
The Group operates and manages its business as a single segment that includes primarily the provision of online and offline education services and selling of related products. | |||||||||||||
The revenues attributable to the different service and product groups are as follows: | |||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Online education services | 40,281 | 58,573 | 80,545 | ||||||||||
Books and reference materials | 4,438 | 5,129 | 6,392 | ||||||||||
Offline education services | 4,507 | 4,617 | 7,817 | ||||||||||
Others | 2,876 | 3,041 | 2,442 | ||||||||||
52,102 | 71,360 | 97,196 | |||||||||||
Online education services accounted for 77.3%, 82.1% and 82.9% of the Group’s total net revenue for the years ended September 30, 2012, 2013 and 2014, respectively. Any significant reduction in sales from this service could have a substantial negative impact on the Group’s results of operations. | |||||||||||||
Geographic disclosures: | |||||||||||||
As the Group primarily generates its revenues from customers in the PRC, no geographical segments are presented. The majority of the Group’s long-lived assets are located in the PRC. |
NET_INCOME_PER_SHARE
NET INCOME PER SHARE | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
NET INCOME PER SHARE | 20 | NET INCOME PER SHARE | |||||||||||
Basic and diluted net income per share for each of the periods presented were calculated as follows: | |||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Numerator: | |||||||||||||
Net income from continuing operations | 7,973 | 13,564 | 23,409 | ||||||||||
Net income from discontinued operations, net of tax | 236 | — | — | ||||||||||
Net income | 8,209 | 13,564 | 23,409 | ||||||||||
- allocated to ordinary share - basic | 8,209 | 13,554 | 23,392 | ||||||||||
- allocated to nonvested restricted share - basic | — | 10 | 17 | ||||||||||
Denominator: | |||||||||||||
Weighted average number of ordinary shares outstanding | 133,996,737 | 135,174,562 | 139,613,967 | ||||||||||
Weighted average number of nonvested restricted share | — | 103,082 | 102,754 | ||||||||||
Plus incremental weighted average ordinary shares from assumed exercise of share options using the treasury stock method | 366,371 | 1,121,589 | 780,483 | ||||||||||
Weighted average ordinary shares outstanding used in computing diluted net income per share | 134,363,108 | 136,399,233 | 140,497,204 | ||||||||||
Basic net income per share | |||||||||||||
Basic from continuing operations | 0.06 | 0.1 | 0.17 | ||||||||||
Basic from discontinued operations (net of tax) | — | — | — | ||||||||||
Basic | 0.06 | 0.1 | 0.17 | ||||||||||
Basic net income per nonvested restricted share | |||||||||||||
Basic from continuing operations | — | 0.1 | 0.17 | ||||||||||
Basic from discontinued operations (net of tax) | — | — | — | ||||||||||
Basic | — | 0.1 | 0.17 | ||||||||||
Diluted net income per share | |||||||||||||
Diluted from continuing operations | 0.06 | 0.1 | 0.17 | ||||||||||
Diluted from discontinued operations (net of tax) | — | — | — | ||||||||||
Diluted | 0.06 | 0.1 | 0.17 | ||||||||||
SHARE_INCENTIVE_PLAN
SHARE INCENTIVE PLAN | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
SHARE INCENTIVE PLAN | 21 | SHARE INCENTIVE PLAN | |||||||||||||||
Share options | |||||||||||||||||
On April 18, 2008, the Company’s shareholders approved the “China Distance Education Holdings Limited Share Incentive Plan” (the “Prior Plan”), which permits the grant of share options and shares to its employees and non-employees (the “Participants”). The maximum number of ordinary shares that may be delivered pursuant to compensatory awards granted to the “Participants” under the Prior Plan should not exceed 11,652,556 ordinary shares of par value US$0.0001 per share. On July 2, 2008, the Company’s shareholders approved the “China Distance Education Holdings Limited 2008 Performance Incentive Plan” (the “New Plan”). Subject to any amendment of the New Plan, the maximum number of ordinary shares that may be issued pursuant to the New Plan is equal to 5% of the total number of ordinary shares issued and outstanding as of August 4, 2008, plus an automatic annual increase on October 1 of each calendar year commencing with October 1, 2008, by an amount equal to the lesser of (i) 1% of the total number of ordinary shares issued and outstanding on September 30 of the same calendar year, or (ii) such number of ordinary shares as may be determined by the Company’s board of directors. The purpose of these share incentive plans is to promote the success of the Company and the interests of its shareholders by providing a means through which the Company may grant equity-based incentives to attract, motivate, retain and reward certain officers, employees, directors and other eligible persons and to further link the interests of recipients with those of the Company’s shareholders generally. The Prior Plan will expire on April 17, 2018. The New Plan will expire on the tenth anniversary date of August 4, 2008. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest within 4 years of continuous service and have 10-year contractual terms. Share awards generally vest for 1 year. | |||||||||||||||||
On May 21, 2013, the Company’s board of directors and compensation committee approved to cancel 400,000 options that were granted to the five directors on December 2, 2008 with an exercise price per share equal to US$0.615. Since these options were fully vested and the corresponding share-based compensation was recognized before the cancellation date, no expense related to such options was recorded in the year ended September 30, 2013. | |||||||||||||||||
By the same resolution of the board of directors on May 21, 2013, 720,900 options that were granted to the selected employees on November 17, 2009 with an exercise price per share equal to US$1.87 were cancelled. This cancellation resulted in an immediate recording of the remaining share-based compensation of US$146 in the year ended September 30, 2013. | |||||||||||||||||
A summary of option activity as of September 30, 2014, and changes during the years ended September 30, 2014 are presented below: | |||||||||||||||||
Share option granted to employees and non-executive directors | Number | Weighted- | Weighted- | Aggregated | |||||||||||||
of shares | average | average | intrinsic value | ||||||||||||||
exercise price | remaining | ||||||||||||||||
contractual | |||||||||||||||||
term (years) | |||||||||||||||||
Outstanding, September 30, 2013 | 1,579,732 | US$ | 0.5 | 6.37 | 3,389 | ||||||||||||
Exercised | (1,095,732 | ) | US$ | 0.45 | |||||||||||||
Outstanding, September 30, 2014 | 484,000 | US$ | 0.35 | 5.73 | 1,528 | ||||||||||||
Exercisable at September 30, 2014 | 484,000 | US$ | 0.35 | 5.73 | 1,528 | ||||||||||||
A summary of the activities of the share option granted to non-employees as of September 30, 2014, and changes during the year ended September 30, 2014 are presented below: | |||||||||||||||||
Share option granted to non-employees | Number | Weighted- | Weighted- | Aggregated | |||||||||||||
of shares | average | average | intrinsic value | ||||||||||||||
exercise price | remaining | ||||||||||||||||
contractual | |||||||||||||||||
term (years) | |||||||||||||||||
Outstanding, September 30, 2013 | 128,200 | US$ | 0.495 | 4.55 | 275 | ||||||||||||
Exercised | — | ||||||||||||||||
Outstanding, September 30, 2014 | 128,200 | US$ | 0.345 | 3.55 | 405 | ||||||||||||
Exercisable at September 30, 2014 | 128,200 | US$ | 0.345 | 3.55 | 405 | ||||||||||||
On November 20, 2013, the Company declared a cash dividend of US$0.15 per ordinary share on its outstanding shares to shareholders as of January 8, 2014. According to the terms of the Prior and New Plan, the exercise price was duly reduced by US$0.15 for all of the outstanding options as of January 8, 2014. The change in exercise price incurred in the year ended September 30, 2014, and therefore was not reflected in the weighted-average exercise price as of September 30, 2013. | |||||||||||||||||
The total intrinsic value of options exercised during the year ended September 30, 2014 was US$3,906. As of September 30, 2014, there was no unrecognized share-based compensation cost related to share options since the share options were all fully vested. | |||||||||||||||||
Nonvested restricted shares | |||||||||||||||||
On December 3, 2012, the Company granted 225,000 nonvested restricted shares of the Company to its directors, of which 100,000 nonvested restricted shares are vested immediately on the grant date and the rest is restricted on transferability and will be forfeited if the directors cease to provide requisite service to the Company. The restriction will be removed upon the vesting of the nonvested restricted shares on the first anniversary of the issuance day. Before the removal of such restrictions, the holders of the nonvested shares shall be entitled to all rights and privileges of those of ordinary shareholders, and shall be entitled to voting rights and dividends. Therefore, these nonvested shares are considered participating securities for the purpose of net earnings per share calculation. The grant-date fair value of a nonvested restricted share was US$1.22, which was determined based on the closing price of the Company’s ADSs on NYSE on December 3, 2012. This grant resulted in a total share-based compensation of US$276, of which US$122 was recognized immediately on the grand date and US$154 was recognized ratably over the requisite service period of one year. | |||||||||||||||||
On December 3, 2013, the Company granted 125,000 nonvested restricted shares of the Company to its directors. These shares are restricted on transferability and will be forfeited if the directors cease to provide requisite service to the Company. The restriction will be removed upon the vesting of the nonvested restricted shares on the first anniversary of the issuance day. Before the removal of such restrictions, the holders of the nonvested shares shall be entitled to all rights and privileges of those of ordinary shareholders, and shall be entitled to voting rights and dividends. Therefore, these nonvested shares are considered participating securities for the purpose of net earnings per share calculation. The grant-date fair value of a nonvested restricted share was US$4.58, which was determined based on the closing price of the Company’s ADSs on NYSE on December 3, 2013. This grant resulted in a total share-based compensation of US$573, which was recognized ratably over the requisite service period of one year. | |||||||||||||||||
A summary of the nonvested restricted shares activity is as follows: | |||||||||||||||||
Number of | Weight average | Aggregated | |||||||||||||||
Nonvested restricted | grant-date | intrinsic value | |||||||||||||||
shares outstanding | fair value | ||||||||||||||||
US$ | |||||||||||||||||
Nonvested restricted shares outstanding at September 30, 2013 | 125,000 | 1.22 | $ | 330 | |||||||||||||
Granted | 125,000 | 4.58 | |||||||||||||||
Vested | (125,000 | ) | 1.22 | ||||||||||||||
Nonvested restricted shares outstanding at September 30, 2014 | 125,000 | 4.58 | $ | 438 | |||||||||||||
Nonvested restricted shares expected to vest at September 30, 2014 | 125,000 | 4.58 | $ | 438 | |||||||||||||
The total fair value of shares vested during the years ended September 30, 2012, 2013 and 2014 were $ nil, $122 and $153, respectively. The Company recorded share-based compensation expenses of $21, $250 and $503 for the years ended September 30, 2012, 2013 and 2014, respectively. As of September 30, 2014, there was $95 of share-based compensation related to nonvested shares that is expected to be recognized over a weighted average period of 0.2 year. | |||||||||||||||||
Share-based compensation expense | |||||||||||||||||
Total share-based compensation expense of share-based awards granted to employees, non-employees and non-executive directors recognized for the years ended September 30, 2012, 2013 and 2014 are as follows: | |||||||||||||||||
As of September 30, | |||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
US$ | US$ | US$ | |||||||||||||||
Cost of services | 37 | 56 | — | ||||||||||||||
General and administrative expenses | 88 | 522 | 503 | ||||||||||||||
Selling expenses | 16 | 47 | — | ||||||||||||||
141 | 625 | 503 | |||||||||||||||
CASH_DIVIDEND
CASH DIVIDEND | 12 Months Ended | |
Sep. 30, 2014 | ||
CASH DIVIDEND | 22 | CASH DIVIDEND |
On November 16, 2011, the Company approved and declared a cash dividend of US$0.12 per ordinary share on its total 135,565,361 outstanding shares as of the close of trading on December 15, 2011, resulting in payments totaling US$16,268 to shareholders. Such dividend was recorded as a reduction to additional paid-in capital since the Company had cumulative deficits at the declaration date. | ||
On November 13, 2012, the Company approved and declared a cash dividend of US$0.12 per ordinary share on its total 135,409,521 outstanding shares as of the close of trading on December 7, 2012, resulting in payments totaling US$16,056 to shareholders. Such dividend was recorded as a reduction to additional paid-in capital since the Company had cumulative deficits at the declaration date. | ||
On November 20, 2013, the Company approved and declared a cash dividend of US$0.15 per ordinary share on its total 136,409,633 outstanding shares as of the close of trading on January 8, 2014, resulting in payments totaling US$20,258 to shareholders. Such dividend was recorded as a reduction against retained earnings to the extent of the balance as of November 20, 2013 retained by the Company’s wholly owned subsidiaries in the PRC and then as a reduction against additional paid-in capital for the remainder. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | |
Sep. 30, 2014 | ||
SUBSEQUENT EVENTS | 23 | SUBSEQUENT EVENTS |
On November 18, 2014, by a resolution of the board of directors, 2,800,000 share options were granted to certain employees for an exercise price per share at US$3.74. These options shall vest subject to a four-year vesting schedule with 25% vesting in each year. | ||
On November 18, 2014, the Company approved and declared a cash dividend of US$0.20 per ordinary share on its outstanding shares to shareholders of record as of the close of trading on January 6, 2015. | ||
On January 12, 2015, the Company granted 542,372 nonvested restricted shares under the New Plan. These nonvested restricted shares are subject to a four-year vesting period with 25% vesting on the first anniversary of the issuance date and the remaining 75% vesting in six substantially equal semi-annual installments. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Basis of presentation and use of estimates | Basis of presentation and use of estimates | ||||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). | |||||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the balance sheet dates and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions reflected in the Group’s financial statements include, but are not limited to, revenue recognition, consolidation of VIE, income tax, allowance for doubtful accounts, impairment of goodwill and long-term assets and share-based compensation expenses. Actual results could materially differ from those estimates. | |||||
The effect of discontinued operations has been reflected in certain accounts in the consolidated financial statements for the year ended September 30, 2011 as described in Note 3. | |||||
Principles of consolidation | Principles of consolidation | ||||
The consolidated financial statements include the financial statements of the Company, its subsidiaries, its VIE and VIE’s subsidiaries. All transactions and balances among the Company, its subsidiaries, its VIE and VIE’s subsidiaries have been eliminated upon consolidation. | |||||
Foreign currency translation and transactions | Foreign currency translation and transactions | ||||
The Company, DL Education, CDEL Hong Kong and Pencil’s functional currencies are United States dollars (“US$”). The Company’s PRC subsidiaries, VIE and VIE’s subsidiaries determine their functional currencies to be the Chinese Renminbi (“RMB”). The Company uses the US$ as its reporting currency and uses the monthly average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position of its PRC subsidiaries and its variable interest entities, respectively. Translation differences are recorded in accumulated other comprehensive income, a component of consolidated statements of changes in equity. | |||||
Transactions denominated in foreign currencies are remeasured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are remeasured at the balance sheet date exchange rate. Exchange gains and losses are included in the consolidated statements of comprehensive income. | |||||
Cash and cash equivalents | Cash and cash equivalents | ||||
Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have an original maturity of three months or less when purchased. | |||||
Term deposits | Term deposits | ||||
Term deposits consist of deposits placed with financial institutions with an original maturity of greater than three months and less than one year. | |||||
Restricted cash | Restricted cash | ||||
Restricted cash represents deposits not readily available to the Company. Restricted cash as of September 30, 2014 mainly represented cash pledged as security of bank borrowing. | |||||
Inventories | Inventories | ||||
Inventories, consisting of paper and professional examination reference books, are stated at the lower of cost or market value. Cost is determined using the first in, first out method. | |||||
Fair value | Fair value | ||||
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: | |||||
Level 1 | |||||
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. | |||||
Level 2 | |||||
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | |||||
Level 3 | |||||
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. | |||||
The Group’s financial instruments consist of cash equivalents, term deposits, restricted cash, accounts receivable, other current assets, and other current liabilities. The carrying amounts of these instruments approximate their fair values due to their short-term maturity. | |||||
The Group reviews goodwill for impairment annually or more frequently if events or changes in circumstances indicate the possibility of impairment. For the continuing operations, other intangible assets, and other long-lived assets are measured at fair value on a nonrecurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. For discontinued operations, long-lived assets are measured at the lower of carrying amount or fair value less cost to sell. The fair value of these assets were determined using models with significant unobservable inputs which were classified as Level 3 inputs, primarily the discounted future cash flow. | |||||
Allowance for doubtful accounts | Allowance for doubtful accounts | ||||
An allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable based on an assessment of specific evidence indicating doubtful collection, historical experience, account balance aging and prevailing economic conditions. Accounts receivable balances are written off after all collection efforts have been exhausted. | |||||
Property, plant and equipment, net | Property, plant and equipment, net | ||||
Property, plant and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: | |||||
Category | Estimated useful life | Estimated residual value | |||
Buildings | 35 years | 5-10% | |||
Electronic and office equipment | 5 years | 5-10% | |||
Motor vehicles | 5 years | 5-10% | |||
Leasehold improvement and building improvement | Shorter of lease term or 5 years | — | |||
Repair and maintenance costs are charged to expense as incurred, whereas the cost of renewals and betterment that extends the useful lives of property, plant and equipment are capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the cost and accumulated depreciation from the asset and accumulated depreciation accounts with any resulting gain or loss reflected in the consolidated statements of operations. | |||||
Goodwill | Goodwill | ||||
Goodwill is not amortized, but tested for impairment annually or more frequently if event and circumstances indicate that it might be impaired. | |||||
The excess of the purchase price over the fair value of net assets acquired is recorded on the consolidated balance sheet as goodwill. In September 2011, the FASB issued an authoritative pronouncement related to testing goodwill for impairment. The guidance permits the Company to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. Absent from any impairment indicators, the Group performs its annual impairment test on the last day of each fiscal year. | |||||
For the years ended September 30, 2013 and 2014, the Group performed its annual impairment test using a two-step approach. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired and the second step is not required. If the fair value of the reporting unit is less than its carrying amount, the second step of the impairment test measures the amount of the impairment loss, if any, by comparing the implied fair value of goodwill to its carrying amount. If the carrying amount of goodwill exceeds its implied fair value, an impairment loss is recognized equal to that excess. The implied fair value of goodwill is calculated in the same manner that goodwill is calculated in a business combination, whereby the fair value of the reporting unit is allocated to all of the assets and liabilities of that unit, with the excess purchase price over the amounts assigned to assets and liabilities representing the implied fair value of goodwill. | |||||
Other intangible assets, net | Other intangible assets, net | ||||
Other intangible assets are amortized using the straight-line basis over the estimated useful lives as follows: | |||||
Category | Estimated useful life | ||||
Computer software | 3~5 years | ||||
Trademarks and domain names | 10~11 years | ||||
Courseware | 1~5 years | ||||
Website | 5 years | ||||
Business contracts | 3~5 years | ||||
Copyrights | 5 years | ||||
Platform | 3.5 years | ||||
Impairment of long-lived assets | Impairment of long-lived assets | ||||
The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss based on the fair value of the assets. | |||||
If the intent is to hold the asset for sale and certain other criteria are met (i.e., the asset can be disposed of currently, appropriate levels of authority have approved sale, and there is an actively pursuing buyer), the impairment test is a comparison of the asset’s carrying value to its fair value less costs to sell. To the extent that the carrying value is greater than the asset’s fair value less costs to sell, an impairment loss is recognized for the difference. Assets held for sale are separately presented on the balance sheet and are no longer depreciated. | |||||
Revenue recognition | Revenue recognition | ||||
Revenues are recognized when the following four criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the service has been rendered, (iii) the fees are fixed or determinable, and (iv) collectability is reasonably assured. | |||||
Online education services | |||||
The online education service provided by the Group to its customers is an integrated service, including audio-video course content, mock examinations and online chat rooms during the subscription period. Audio-video course content, mock examinations and online chat rooms are not practical to be sold on standalone basis and have never been sold separately. | |||||
The Group earns revenues by providing online education services to customers pursuant to two types of revenue models - non-refundable course model and refundable course model. | |||||
The on-line courses using the non-refundable course model are mainly comprised of regular classes and premium classes. The revenues for the regular classes are recognized on a straight line basis over the subscription period from the month in which the customers enroll in the courses to the month in which subscribed courses terminate. For premium classes, if participants fail to pass the course examination and certain pre-agreed conditions are met, the participants can be offered by certain course fee discount to retake the same premium course. As such, the discount is proportionately applied as a deduction to revenue recognized for each of the premium classes that participants take. | |||||
For on-line courses using the refundable course model (i.e. elite classes), if the participants complete the courses and fail the professional exams and their scores are within a range provided for in the agreement, they are entitled to either a full refund or the right to retake the course. The participants must notify the Group within a pre-agreed period after the professional examinations scores are released in order to be eligible for the refund or the right to retake the course. The proceeds from the refundable course model are initially recorded as “refundable fees”. Revenues are recognized upon the expiration of the participants’ right to receive a refund or ratably over the retake course period when the participants decide to retake the course before the expiration of such right. | |||||
Most of the course participants pay course fees via online payment systems provided by third parties including internet debit or credit card payment systems and other third-party payment systems. Some participants may choose to enroll for on-line courses through the use of prepaid study cards which are purchased from distributors. The Group sells to its regional distributors prepaid study cards at a discount to the face value of the cards. Revenues are recorded using the after-discount-selling-price of the cards and recognized over the period the on-line course is available to the customers, which generally is from the enrollment date to the completion of the relevant professional examination date. Sales of prepaid study cards that are not activated for course enrollment are recognized as revenues upon expiration of the cards. Prepaid study cards that have been activated but have not been used to enroll on-line courses do not have an expiry date and will be deferred until they are used to enroll in on-line courses. Participants who enroll with the Company directly are eligible to a refund within a 7-day trial period. Revenues from direct enrollment with the Company are recognized over the period from the lapse of the 7-day trial period to the completion of the relevant professional examination date. | |||||
The Group may, at times, offer volume discounts to its regional distributors for purchases over a specified amount of prepaid cards during a specified period of time, generally, one year. The amount of future rebates relating to these volume discounts cannot be reasonably estimated and accordingly a deferred revenue balance is recognized for the maximum potential amount of volume discount. If the number of purchases specified in the volume discount provisions is not reached upon the expiry of the volume discount period, the deferred revenue relating to such volume discount for each study card is recognized as revenue over the remaining period the on-line course is available to the user who enrolls using the study card or recognized as revenue immediately if the related on-line course has been completed or the study card has expired. | |||||
The Group provides student recruiting services and online platform to government agencies which use the Group’s online platform to conduct continuing education services. The Group earns service fees as a percentage of total tuition fees based on the agreements entered into with the government agencies. Service fees are initially recorded as deferred revenue and are recognized as revenue when course participants complete the stipulated study hours and take the examinations, or on a straight line basis over the subscription period based on the terms of the agreements. | |||||
The Group also operates an Online Open Learning Platform, a proprietary education platform that allows other parties to share their educational content or deliver live courses online. After passing the Group’s quality control reviews, experts and scholars of various fields can either record their own lectures and post them on the Open Learning Platform website, or deliver real-time audio-video courses. The group offers coaching services to these lecturers and deploys a user evaluation system to ensure that these courses meet its quality and effectiveness standards. The Group pays the experts and scholars certain percentage of the service fee they received from the end users. Revenues from Open Learning Platform are recognized on gross basis, as the Group is the primary obligor in the arrangement and bears the risks and rewards, including the quality control and the services delivered. | |||||
For the years ended September 30, 2012, 2013 and 2014, the Group recognized revenues before business tax and related surcharges in connection with expired study cards amounted to US$113, US$164, and US$114, respectively. | |||||
The on-line courses service is provided by Beijing Champion and its subsidiaries which are subject to approximately 3% business tax and related surcharges. The Group records revenues net of these taxes in the consolidated statements of operations. Such business tax and related surcharges for the years ended September 30, 2012, 2013 and 2014 were US$1,331, US$1,986 and US$2,699 respectively. | |||||
Books and reference materials | |||||
The Group sells books and reference materials to distributors and end users. Revenues relating to such sales are deferred until cash is collected. Inventory costs of products delivered to distributors for which revenues have been deferred are presented as “deferred costs” on the consolidated balance sheets. | |||||
The Group also sells books and reference materials together with study cards which allow the customers to take a certain number of on-line courses for no additional charge. These sales are considered arrangements with two deliverables, consisting of the delivery of books and reference material and the on-line courses service. Because neither vendor-specific objective evidence nor third-party evidence of fair value of the deliverables exist, the Group allocates revenue to each deliverables based on their relative selling price. | |||||
Other revenues | |||||
Other revenues include sales of offline professional training, courseware production services, platform production services, and others. | |||||
Revenues from offline professional training are recognized when the training courses are provided. For offline training sponsored by government authorities, the tuition fees of the training participants are subsidized by the government. Qualified enrollments and the fees to be earned cannot be determined until the confirmation from government authorities regarding the number of students and fees is received by the Company, which is after the completion of services. Therefore, revenues from such services are recognized upon cash receipt or the receipt of confirmations from government authorities, whichever is earlier, when all the other revenue recognition criteria have been met. | |||||
Revenues from sales of courseware, which are designed and developed pursuant to the requests from customers, are recognized when the courseware or platforms are accepted by the customers. The Company has no significant remaining obligation with respect to the courseware or platforms upon the acceptance of the customers. | |||||
From time to time, the Group enters into arrangement to provide the development and maintenance of online platforms to its customers. After the development of online platforms, the Group provides support and maintenance services. The development of online platform and the support and maintenance services have never been sold separately and they do not have standalone value to the customers. Accordingly, revenues from such arrangement is accounted as a single unit of accounting and recognized ratably over the support and maintenance services period. | |||||
Revenues from other services, including magazine content production, advertising and consulting services, are recognized over the period when such services are provided. | |||||
Value added taxes | Value added taxes | ||||
On January 1, 2012, the PRC Ministry of Finance and the State Administration of Taxation officially launched a pilot value-added tax (“VAT”) reform program (“Pilot Program”), applicable to businesses in selected industries. Businesses in the Pilot Program would pay VAT instead of business tax. The Pilot Program initially applied only to transportation industry and “modern service industries” (“Pilot Industries”) in Shanghai and subsequently was expanded to ten other provinces and municipalities between August and December 2012. | |||||
As a result, since September 1, 2012, technical and consulting service, software licensing and course production services provided by Champion Technology and Champion Education Technology, and since July 1, 2014, course production services provided by Champion Wangge were no longer subject to business tax but VAT instead. Champion Technology is VAT general taxpayer. Champion Education Technology was VAT small-scale taxpayer but was treated as general taxpayer since February 1, 2014. Champion Wangge was qualified as small-scale taxpayer since July 1, 2014. The applicable VAT rates are 6% and 3% for the entities that are general taxpayer and small-scale taxpayer, respectively. | |||||
Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in the line item of accrued expenses and other current liabilities on the consolidated balance sheets. | |||||
Pursuant to a circular jointly released by Ministry of Finance and State Administration of Taxation on December 25, 2013, the Group is subject to a VAT exemption for the proceeds received from customers for sales related to books and reference materials till December 31, 2017. As a result, the Group registered a tax exemption application at state tax bureau in February 2014 and started to enjoy such tax exemption for the relevant sales since March 2014. Prior to the filling of tax exemption application in February 2014, the Group was subject to VAT generally at a rate of 13% on the proceeds received for the sales of books and reference materials. | |||||
Cost of sales | Cost of sales | ||||
Cost of online education services primarily includes the production costs of study cards, server and bandwidth leasing fees, lecturer fees, staff costs involved in the operation of online education services including network operation and maintenance, course production and tutor services and other direct costs of providing these services. These costs are expensed when incurred. | |||||
The cost of books and reference materials, including direct materials used for production of books, authorship fee and printing cost, are initially deferred and recorded as “deferred cost”. The deferred costs are recognized as cost of sales when the related revenue is recognized upon cash receipt. | |||||
Advertising expenditure | Advertising expenditure | ||||
Advertising expenditure is expensed when incurred and are included in “selling expenses” in the consolidated statements of operations. Advertising expenses from continuing operations were US$2,112, US$3,167 and US$6,464, and those from discontinued operations were US$26, US$ nil and US$ nil, for the years ended September 30, 2012, 2013 and 2014, respectively. | |||||
Shipping and handling costs | Shipping and handling costs | ||||
Shipping and handling costs of books and reference materials are classified as a component of “selling expenses” in the consolidated statements of operations. Shipping and handling costs classified as selling expenses from continuing operations were US$252, US$489 and US$703, and those from discontinued operations were US$1, US$nil and US$nil, for the years ended September 30, 2012, 2013 and 2014, respectively. | |||||
Income taxes | Income taxes | ||||
Current income taxes are provided for in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the financial statements. Net operating loss carry forwards and credits are applied using enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that a portion of or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. The impact of an uncertain income tax position is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes. | |||||
Share-based compensation | Share-based compensation | ||||
Share-based compensation with employees is measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, with a corresponding addition to paid-in capital. The Group recognizes compensation expense over the vesting term on a straight-line basis with the amount of compensation expense recognized at any date not less than the portion of the grant-date value of the option vested at that date. | |||||
Share-based compensation with non-employee is measured based on the fair value of options at the earlier of the performance commitment date or the date at which the non-employee’s performance is complete (hereafter referred to as the measurement date). The Group recognizes compensation expense using the graded vesting attribution method. | |||||
Share-based compensation awards which require the issuance of a variable number of shares to settle a fixed monetary amount are accounted for as liabilities. | |||||
Net income per share | Net income per share | ||||
Basic net income per share is computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period. Nonvested restricted shares are also participating securities as they enjoy identical dividend rights as ordinary shares. Accordingly, the Group uses the two-class method whereby undistributed net income is allocated on a pro rata basis to each participating share to the extent that each class may share in income for the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. The dilutive effect of outstanding share-based awards is reflected in the diluted net income per share by application of the treasury stock method. | |||||
Comprehensive income | Comprehensive income | ||||
Comprehensive income includes net income and foreign currency translation adjustments and is reported in the consolidated statements of comprehensive income. | |||||
Significant risks and uncertainties | Significant risks and uncertainties | ||||
Foreign currency risk | |||||
RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The cash and cash equivalents of the Group from the continuing operations included aggregate amounts of US$68,867 and US$110,342, which were denominated in RMB, at September 30, 2013 and 2014, respectively, representing 95.8% and 93.5% of the cash and cash equivalents at September 30, 2013 and 2014, respectively. | |||||
Concentration of credit risk | |||||
Financial instrument that potentially expose the Group to significant concentration of credit risk primarily consist of cash and cash equivalents, term deposits, restricted cash, accounts receivable and prepayment and other current assets. As of September 30, 2014, substantially all of the Group’s cash and cash equivalents, term deposits and restricted cash were deposited in financial institutions located in the PRC and Hong Kong. Accounts receivable are typically unsecured and are derived from revenue earned from customers in the PRC. The risk with respect to accounts receivable is mitigated by credit evaluations the Group performs on its customers and its ongoing monitoring process of outstanding balances. | |||||
There are no revenues from customers which individually represent greater than 10% of the total net revenues for any year of the three years period ended September 30, 2014. | |||||
Primarily due to the long payment cycles of government agencies, the Group had one customer that accounted for 31.4% and 21.7% of the Group’s carrying amount of accounts receivable as of September 30, 2013 and September 30, 2014 respectively. | |||||
Recently issued accounting pronouncements not yet adopted | Recently issued accounting pronouncements not yet adopted | ||||
In April, 2014, the FASB issued Accounting Standard Update 2014-08, which amends the definition of a discontinued operation in ASC 205-20 and requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued-operations criteria. The new guidance eliminates the second and third criteria of discontinued operation in ASC 205-20-45-1 and instead requires discontinued-operations treatment for disposals of a component or group of components that represents a strategic shift that has or will have a major impact on an entity’s operations or financial results. The ASU also expands the scope of ASC 205-20 to disposals of equity method investments and businesses that, upon initial acquisition, qualify as held for sale. | |||||
The ASU also requires entities to reclassify assets and liabilities of a discontinued operation for all comparative periods presented in the statement of financial position. | |||||
Regarding the statement of cash flows, an entity must disclose, in all periods presented, either (1) operating and investing cash flows or (2) depreciation and amortization, capital expenditures, and significant operating and investing noncash items related to the discontinued operation. | |||||
The ASU is effective prospectively for all disposals (except disposals classified as held for sale before the adoption date) or components initially classified as held for sale in periods beginning on or after December 15, 2014. Early adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. | |||||
In May 2014, the FASB issued, ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry-specific guidance, in current U.S. generally accepted accounting principles. | |||||
The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: | |||||
• | Step 1: Identify the contract(s) with a customer. | ||||
• | Step 2: Identify the performance obligations in the contract. | ||||
• | Step 3: Determine the transaction price. | ||||
• | Step 4: Allocate the transaction price to the performance obligations in the contract. | ||||
• | Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. | ||||
The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Group is in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements. | |||||
In June 2014, the FASB issued a new pronouncement which requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. | |||||
The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements. |
ORGANIZATION_AND_BASIS_OF_PRES1
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Details of Company's Subsidiaries and Variable Interest Entities | As of September 30, 2014, details of the Company’s subsidiaries, its VIE and VIE’s subsidiaries were as follows: | ||||||||||||
Company | Date of | Place of | Percentage of | Principal activities | |||||||||
establishment | legal ownership | ||||||||||||
establishment | by the Company | ||||||||||||
Subsidiaries: | |||||||||||||
China Distance Education Limited (“CDEL Hong Kong”) | 13-Mar-03 | Hong Kong | 100 | % | Investment holding and provision of education services | ||||||||
Practice Enterprises Network China International Links Limited (“Pencil”) | 23-Feb-10 | Hong Kong | 100 | % | Inactive | ||||||||
DL Education Service, LLC (“DL Education”) | September 27,2012 | US | 100 | % | Inactive | ||||||||
Beijing Champion Distance Education Technology Co., Ltd. (“Champion Technology”) | 5-Jan-04 | PRC | 100 | % | Provision of technical support and consultancy services and course production | ||||||||
Beijing Champion Education Technology Co., Ltd. (“Champion Education Technology”) | 23-Apr-07 | PRC | 100 | % | Software licensing and course production | ||||||||
Variable interest entity: | |||||||||||||
Beijing Champion Hi-Tech Co., Ltd. (“Beijing Champion”) | 12-Jul-00 | PRC | Nil | Provision of online education services and sales of books and reference materials | |||||||||
Subsidiaries of variable interest entity: | |||||||||||||
Beijing Caikaowang Company Ltd. (“Caikaowang”) | 28-Nov-07 | PRC | Nil | Provision of online education services | |||||||||
Beijing Champion Wangge Education Technology Co., Ltd. (“Champion Wangge”) | 24-Jun-08 | PRC | Nil | Provision of online education services | |||||||||
Beijing Zhengbao Yucai Education Technology Co., Ltd. (“Zhengbao Yucai”) | 19-Feb-09 | PRC | Nil | Provision of start-up training services | |||||||||
Beijing Haidian District Champion Training School (“Champion Training School”) | 19-Feb-09 | PRC | Nil | Provision of online and offline education services | |||||||||
Financial Information of Company's VIE and VIE's Subsidiaries | The following financial information of the Company’s VIE and VIE’s subsidiaries as of September 30, 2013 and 2014 and for each of the three years in the period ended September 30, 2014 was included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances within VIE and VIE’s subsidiaries: | ||||||||||||
As of September 30, | |||||||||||||
2013 | 2014 | ||||||||||||
US$ | US$ | ||||||||||||
Cash and cash equivalents | 39,706 | 75,117 | |||||||||||
Prepayment and other current assets | 3,839 | 3,100 | |||||||||||
Total current assets | 54,575 | 87,205 | |||||||||||
Total assets | 72,515 | 104,569 | |||||||||||
Deferred revenue | 17,120 | 23,319 | |||||||||||
Total current liabilities | 38,442 | 53,297 | |||||||||||
Total liabilities | 38,442 | 53,297 | |||||||||||
Total equity | 34,073 | 51,272 | |||||||||||
For the years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Revenues | 52,005 | 70,942 | 96,990 | ||||||||||
Net income (1) | 14,944 | 21,062 | 31,986 | ||||||||||
Net cash provided by operating activities | 6,958 | 25,755 | 36,326 | ||||||||||
Net cash (used in)/provided by investing activities | 549 | (2,521 | ) | (850 | ) | ||||||||
Effects of exchange rate changes | 183 | 674 | (65 | ) | |||||||||
-1 | This is net income before service fees charged by Champion Technology and Champion Education Technology. |
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Schedule of Estimated Useful Lives of Property, Plant and Equipment | Property, plant and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, as follows: | ||||
Category | Estimated useful life | Estimated residual value | |||
Buildings | 35 years | 5-10% | |||
Electronic and office equipment | 5 years | 5-10% | |||
Motor vehicles | 5 years | 5-10% | |||
Leasehold improvement and building improvement | Shorter of lease term or 5 years | — | |||
Schedule Of Estimated Useful Lives Of Other Intangible Assets | Other intangible assets are amortized using the straight-line basis over the estimated useful lives as follows: | ||||
Category | Estimated useful life | ||||
Computer software | 3~5 years | ||||
Trademarks and domain names | 10~11 years | ||||
Courseware | 1~5 years | ||||
Website | 5 years | ||||
Business contracts | 3~5 years | ||||
Copyrights | 5 years | ||||
Platform | 3.5 years |
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Assets And Liabilities of Discontinued Operations | The following is a summary of the assets and liabilities sold as of May 4, 2012 and the related gain on disposal: | ||||
Disposed as of | |||||
May 4, | |||||
2012 | |||||
US$ | |||||
Current assets of discontinued operations: | |||||
Cash and cash equivalents | 312 | ||||
Accounts receivable, net | 14 | ||||
Prepayment and other current assets | 324 | ||||
650 | |||||
Current liabilities of discontinued operations: | |||||
Accrued expenses and other liabilities | 348 | ||||
Income tax payable | 128 | ||||
Deferred revenue, current portion | 314 | ||||
790 | |||||
Net liabilities disposed | (140 | ) | |||
Cash proceeds | 157 | ||||
Gain on disposition of the discontinued operation | 297 | ||||
Operating Results From Discontinued Operations | Summarized operating results from the discontinued operations included in the Group’s consolidated statements of operations were as follows for the year ended September 30, 2012: | ||||
Year ended | |||||
September 30, | |||||
2012 | |||||
US$ | |||||
Revenues | 1,045 | ||||
Pre-tax (loss) from discontinued operations | (61 | ) | |||
Income tax expense | — | ||||
(Loss) from discontinued operations, net of tax | (61 | ) | |||
Gain on disposal of discontinued operation | 297 | ||||
Net income from discontinued operations attributable to China Distance Education Holding Limited, net of tax | 236 | ||||
ACCOUNTS_RECEIVABLE_NET_Tables
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accounts Receivable, Net | Accounts receivable, net consisted of the following: | ||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Accounts receivable | 5,291 | 2,887 | |||||||
Less: allowance for doubtful accounts | (1,773 | ) | (1,250 | ) | |||||
Accounts receivable, net | 3,518 | 1,637 | |||||||
Movement Of Allowance For Doubtful Accounts | Movement of allowance for doubtful accounts was as follows: | ||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Balance at beginning of year | 2,092 | 1,773 | |||||||
Reversal of the allowance for doubtful accounts | (371 | ) | (517 | ) | |||||
Foreign currency adjustment | 52 | (6 | ) | ||||||
Balance at end of the year | 1,773 | 1,250 | |||||||
INVENTORIES_NET_Tables
INVENTORIES, NET (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventories | Inventories consisted of the following: | ||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Books and other goods | 708 | 968 | |||||||
Paper and other raw materials | 102 | 121 | |||||||
Less: inventory provisions for slow-moving and obsolescence | (112 | ) | (640 | ) | |||||
698 | 449 | ||||||||
PREPAYMENT_AND_OTHER_CURRENT_A1
PREPAYMENT AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Prepayment And Other Current Assets | Prepayment and other current assets consisted of the following: | ||||||||||
As of September 30, | |||||||||||
Notes | 2013 | 2014 | |||||||||
US$ | US$ | ||||||||||
Advance to the suppliers | -1 | 1,873 | 766 | ||||||||
Prepaid expenses | 1,034 | 1,669 | |||||||||
Interest receivable | 24 | 369 | |||||||||
Current portion of receivables related to ITAT program (Note 11) | 285 | — | |||||||||
Funds receivable | -2 | 285 | 306 | ||||||||
Deposits | 11 | 23 | |||||||||
Others | 575 | 616 | |||||||||
Prepayment and other current assets, net | 4,087 | 3,749 | |||||||||
-1 | Advance to the suppliers represents interest-free cash deposits paid to suppliers for future purchase of raw materials and finished goods. The risk of loss arising from non-performance by or bankruptcy of the suppliers is assessed prior to making the deposits and is monitored on a regular basis by management. A charge to cost of sales will be recorded in the period in which a loss incurs. To date, the Group has not experienced any loss of advances to suppliers. | ||||||||||
-2 | Funds receivable arise due to the time taken to clear customers’ payment transactions through external payment networks. When customers remit fees to the Group via external payment networks using their bank account or credit card, there is a clearing period before the cash is received by the Group which usually takes one to three business days. These fees are treated as a receivable until the cash is received. |
PROPERTY_PLANT_AND_EQUIPMENT_N1
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant And Equipment | Property, plant and equipment consisted of the following: | ||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Buildings | 6,051 | 6,033 | |||||||
Electronic and office equipment | 9,523 | 9,896 | |||||||
Leasehold improvement and building improvement | 681 | 511 | |||||||
Motor vehicles | 1,164 | 1,563 | |||||||
Total | 17,419 | 18,003 | |||||||
Less: Accumulated depreciation | (7,217 | ) | (7,282 | ) | |||||
10,202 | 10,721 | ||||||||
GOODWILL_Tables
GOODWILL (Tables) | 12 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||
Goodwill | Goodwill was comprised of the following: | ||||||||||||||||||||||||
Years ended September 30 | |||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||
Online | Start-up | Total | Online | Start-up | Total | ||||||||||||||||||||
education | training | education | training | ||||||||||||||||||||||
service | service | service | service | ||||||||||||||||||||||
US$ | US$ | US$ | US$ | US$ | US$ | ||||||||||||||||||||
Gross amount | |||||||||||||||||||||||||
Beginning balance | 5,726 | 1,785 | 7,511 | 5,880 | 1,831 | 7,711 | |||||||||||||||||||
Exchange difference | 154 | 46 | 200 | (17 | ) | (5 | ) | (22 | ) | ||||||||||||||||
Ending balance | 5,880 | 1,831 | 7,711 | 5,863 | 1,826 | 7,689 | |||||||||||||||||||
Accumulated impairment loss | — | — | — | — | — | — | |||||||||||||||||||
Goodwill, net | 5,880 | 1,831 | 7,711 | 5,863 | 1,826 | 7,689 | |||||||||||||||||||
OTHER_INTANGIBLE_ASSETS_NET_Ta
OTHER INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Composition Of Other Intangible Assets | other intangible assets consisted of the following: | ||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Computer software | 2,978 | 3,428 | |||||||
Trademarks and domain names | 1,456 | 1,499 | |||||||
Courseware | 488 | 486 | |||||||
Business contracts | 531 | 530 | |||||||
Copyrights | 664 | 662 | |||||||
Platform | 217 | 217 | |||||||
Total intangible assets | 6,334 | 6,822 | |||||||
Less: Accumulated amortization | |||||||||
Computer software | (2,275 | ) | (2,595 | ) | |||||
Trademarks and domain names | (840 | ) | (952 | ) | |||||
Courseware | (462 | ) | (486 | ) | |||||
Business contracts | (494 | ) | (530 | ) | |||||
Copyrights | (600 | ) | (658 | ) | |||||
Platform | (187 | ) | (217 | ) | |||||
Accumulated amortization | (4,858 | ) | (5,438 | ) | |||||
Intangible assets, net | 1,476 | 1,384 | |||||||
Estimated Amortization Expenses for Other Intangible Assets | The estimated amortization expenses for the above other intangible assets for each of the following fiscal years are as follows: | ||||||||
Amortization | |||||||||
US$ | |||||||||
2015 | 410 | ||||||||
2016 | 363 | ||||||||
2017 | 296 | ||||||||
2018 | 168 | ||||||||
2019 | 95 | ||||||||
2020 and thereafter | 52 | ||||||||
1,384 | |||||||||
DEPOSITS_FOR_PURCHASE_OF_NONCU1
DEPOSITS FOR PURCHASE OF NON-CURRENT ASSETS (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Deposits for Purchase of Non-Current Assets | Deposits for purchase of non-current assets consisted of the following: | ||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Deposit for purchase of property, plant and equipment and other intangible assets | 374 | 94 | |||||||
374 | 94 | ||||||||
OTHER_NONCURRENT_ASSETS_Tables
OTHER NON-CURRENT ASSETS (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
Other Non-Current Assets | Other non-current assets consisted of the following: | ||||||||||
As of September 30, | |||||||||||
2013 | 2014 | ||||||||||
US$ | US$ | ||||||||||
Long-term prepaid expenses | -1 | 1,207 | 1,903 | ||||||||
Long-term receivables related to ITAT program | -2 | 171 | — | ||||||||
Rental deposits | -3 | 168 | 225 | ||||||||
1,546 | 2,128 | ||||||||||
-1 | Long-term prepaid expenses represent golf club membership fee. The amortization of the long term prepaid expenses was made within a ten-year amortizing period and was recorded as “general and administrative expenses” on the consolidated statements of operations. | ||||||||||
-2 | Long-term receivables represent the non-current portion of prepaid service fee for obtaining government authorization to provide the ITAT program, an information technique application training program, for ten years, starting from 2010. The group amortized such prepayment on a straight-line basis. In 2013, the Group ceased a series of cooperation on ITAT program. As of September 30, 2014, the receivables related to ITAT program, including current portion and non-current portion had been fully settled. | ||||||||||
-3 | Rental deposits represent office rental deposits for the Group’s daily operations. These deposits are classified as non-current deposits since they will not be refunded within one year. |
ACCRUED_EXPENSES_AND_OTHER_LIA1
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accrued Expenses And Other Liabilities | The components of accrued expenses and other liabilities are as follows: | ||||||||
As of September 30, | |||||||||
2013 | 2014 | ||||||||
US$ | US$ | ||||||||
Accrued expenses | 2,795 | 3,726 | |||||||
Salary and welfare payable | 2,775 | 5,222 | |||||||
Tuition fee payables to government agencies | 5,132 | 10,096 | |||||||
Remuneration payable to lecturers | 2,314 | 1,802 | |||||||
Uncertain income tax liabilities (Note 16) | 177 | 177 | |||||||
Payables to employees in connection with options exercise | 458 | 94 | |||||||
Other payable | 1,421 | 1,578 | |||||||
15,072 | 22,695 | ||||||||
INCOME_TAX_Tables
INCOME TAX (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Income (Loss) Before Income Taxes From Continuing Operations | Income before income taxes from continuing operations consisted of: | ||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Non - PRC | (1,252 | ) | (2,003 | ) | (1,757 | ) | |||||||
PRC | 11,825 | 19,364 | 29,218 | ||||||||||
10,573 | 17,361 | 27,461 | |||||||||||
Current and Deferred Components of Income Tax Expense from Continuing Operations | The current and deferred components of the income tax expense from continuing operations appearing in the consolidated statements of operations are as follows: | ||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Current tax expense | 2,074 | 3,107 | 3,988 | ||||||||||
Deferred tax expense | 526 | 690 | 64 | ||||||||||
2,600 | 3,797 | 4,052 | |||||||||||
Reconciliation of Effective Tax Rate and Statutory Income Tax Rate Applicable to PRC Operations | The reconciliation of the effective tax rate and the statutory income tax rate applicable to PRC operations is as follows: | ||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Income before taxes | 10,573 | 17,361 | 27,461 | ||||||||||
Income tax expense computed a applicable tax rates of 25% | 2,643 | 4,340 | 6,865 | ||||||||||
Effect of different tax rates in different jurisdictions | 255 | 440 | 357 | ||||||||||
Non-deductible expenses | 59 | 75 | 94 | ||||||||||
Effect of tax holidays | (1,037 | ) | (1,740 | ) | (2,888 | ) | |||||||
Effect of valuation allowances | 51 | 194 | 33 | ||||||||||
Effect of tax rate changes | — | 237 | — | ||||||||||
Withholding tax on undistributed earnings | 629 | 251 | 373 | ||||||||||
Income tax reversal | — | — | (782 | ) | |||||||||
2,600 | 3,797 | 4,052 | |||||||||||
Effective income tax rate | 24.59 | % | 21.87 | % | 14.76 | % | |||||||
Aggregate Amount and per Share Effect of Tax Holidays | The aggregate amount and per share effect of the tax holidays are as follows: | ||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
The aggregate amount of tax holidays | 1,037 | 1,740 | 2,888 | ||||||||||
The aggregate effect on basic and diluted net income per share: | |||||||||||||
- Basic | 0.01 | 0.01 | 0.02 | ||||||||||
- Diluted | 0.01 | 0.01 | 0.02 | ||||||||||
Components of Deferred Taxes from Continuing Operations | The components of deferred taxes from continuing operations are as follows: | ||||||||||||
As of September 30, | |||||||||||||
2013 | 2014 | ||||||||||||
US$ | US$ | ||||||||||||
Current deferred tax assets | |||||||||||||
Payroll payable | 409 | 794 | |||||||||||
Accrued expenses | 585 | 599 | |||||||||||
Allowance for doubtful accounts | 518 | 546 | |||||||||||
Net operating loss carry-forwards | 289 | 255 | |||||||||||
Total current deferred tax assets | 1,801 | 2,194 | |||||||||||
Less: valuation allowance | (50 | ) | (78 | ) | |||||||||
Current deferred tax assets, net | 1,751 | 2,116 | |||||||||||
Non-current deferred tax assets | |||||||||||||
Intangible assets | 48 | 19 | |||||||||||
Property, plant and equipment | 148 | 140 | |||||||||||
Net operating loss carry-forwards | 372 | 314 | |||||||||||
Total non-current deferred tax assets | 568 | 473 | |||||||||||
Less: valuation allowance | (262 | ) | (268 | ) | |||||||||
Non-current deferred tax assets, net | 306 | 205 | |||||||||||
Non-current deferred tax liabilities | |||||||||||||
Intangible assets | 78 | 39 | |||||||||||
Withholding tax on undistributed earnings | 905 | 1,276 | |||||||||||
Total non-current deferred tax liabilities | 983 | 1,315 | |||||||||||
Reconciliation of Accrued Unrecognized Tax Benefits | Reconciliation of accrued unrecognized tax benefits is as follows: | ||||||||||||
Unrecognized | |||||||||||||
tax benefits | |||||||||||||
Balance - September 30, 2012 | 173 | ||||||||||||
Foreign currency adjustment | 4 | ||||||||||||
Balance - September 30, 2013 | 177 | ||||||||||||
Foreign currency adjustment | — | ||||||||||||
Balance - September 30, 2014 | 177 | ||||||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
Operating Lease Commitments | Future minimum payments under non-cancelable operating leases related to offices, servers and bandwidth with initial terms of one-year or more consisted of the following at September 30, 2014: | ||||
US$ | |||||
Years ending September 30, | |||||
2015 | 3,389 | ||||
2016 | 193 | ||||
2017 | 11 | ||||
2018 | — | ||||
2019 | — | ||||
3,593 | |||||
SEGMENT_REPORTING_Tables
SEGMENT REPORTING (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Revenues Attributable To The Different Service And Product Groups | The revenues attributable to the different service and product groups are as follows: | ||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Online education services | 40,281 | 58,573 | 80,545 | ||||||||||
Books and reference materials | 4,438 | 5,129 | 6,392 | ||||||||||
Offline education services | 4,507 | 4,617 | 7,817 | ||||||||||
Others | 2,876 | 3,041 | 2,442 | ||||||||||
52,102 | 71,360 | 97,196 | |||||||||||
NET_INCOME_PER_SHARE_Tables
NET INCOME PER SHARE (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Basic and diluted net income per share | Basic and diluted net income per share for each of the periods presented were calculated as follows: | ||||||||||||
Years ended September 30, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
US$ | US$ | US$ | |||||||||||
Numerator: | |||||||||||||
Net income from continuing operations | 7,973 | 13,564 | 23,409 | ||||||||||
Net income from discontinued operations, net of tax | 236 | — | — | ||||||||||
Net income | 8,209 | 13,564 | 23,409 | ||||||||||
- allocated to ordinary share - basic | 8,209 | 13,554 | 23,392 | ||||||||||
- allocated to nonvested restricted share - basic | — | 10 | 17 | ||||||||||
Denominator: | |||||||||||||
Weighted average number of ordinary shares outstanding | 133,996,737 | 135,174,562 | 139,613,967 | ||||||||||
Weighted average number of nonvested restricted share | — | 103,082 | 102,754 | ||||||||||
Plus incremental weighted average ordinary shares from assumed exercise of share options using the treasury stock method | 366,371 | 1,121,589 | 780,483 | ||||||||||
Weighted average ordinary shares outstanding used in computing diluted net income per share | 134,363,108 | 136,399,233 | 140,497,204 | ||||||||||
Basic net income per share | |||||||||||||
Basic from continuing operations | 0.06 | 0.1 | 0.17 | ||||||||||
Basic from discontinued operations (net of tax) | — | — | — | ||||||||||
Basic | 0.06 | 0.1 | 0.17 | ||||||||||
Basic net income per nonvested restricted share | |||||||||||||
Basic from continuing operations | — | 0.1 | 0.17 | ||||||||||
Basic from discontinued operations (net of tax) | — | — | — | ||||||||||
Basic | — | 0.1 | 0.17 | ||||||||||
Diluted net income per share | |||||||||||||
Diluted from continuing operations | 0.06 | 0.1 | 0.17 | ||||||||||
Diluted from discontinued operations (net of tax) | — | — | — | ||||||||||
Diluted | 0.06 | 0.1 | 0.17 | ||||||||||
SHARE_INCENTIVE_PLAN_Tables
SHARE INCENTIVE PLAN (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Summary of Option Activity | A summary of option activity as of September 30, 2014, and changes during the years ended September 30, 2014 are presented below: | ||||||||||||||||
Share option granted to employees and non-executive directors | Number | Weighted- | Weighted- | Aggregated | |||||||||||||
of shares | average | average | intrinsic value | ||||||||||||||
exercise price | remaining | ||||||||||||||||
contractual | |||||||||||||||||
term (years) | |||||||||||||||||
Outstanding, September 30, 2013 | 1,579,732 | US$ | 0.5 | 6.37 | 3,389 | ||||||||||||
Exercised | (1,095,732 | ) | US$ | 0.45 | |||||||||||||
Outstanding, September 30, 2014 | 484,000 | US$ | 0.35 | 5.73 | 1,528 | ||||||||||||
Exercisable at September 30, 2014 | 484,000 | US$ | 0.35 | 5.73 | 1,528 | ||||||||||||
Share Options, NonEmployees | A summary of the activities of the share option granted to non-employees as of September 30, 2014, and changes during the year ended September 30, 2014 are presented below: | ||||||||||||||||
Share option granted to non-employees | Number | Weighted- | Weighted- | Aggregated | |||||||||||||
of shares | average | average | intrinsic value | ||||||||||||||
exercise price | remaining | ||||||||||||||||
contractual | |||||||||||||||||
term (years) | |||||||||||||||||
Outstanding, September 30, 2013 | 128,200 | US$ | 0.495 | 4.55 | 275 | ||||||||||||
Exercised | — | ||||||||||||||||
Outstanding, September 30, 2014 | 128,200 | US$ | 0.345 | 3.55 | 405 | ||||||||||||
Exercisable at September 30, 2014 | 128,200 | US$ | 0.345 | 3.55 | 405 | ||||||||||||
Summary of The Nonvested Restricted Shares Activity | A summary of the nonvested restricted shares activity is as follows: | ||||||||||||||||
Number of | Weight average | Aggregated | |||||||||||||||
Nonvested restricted | grant-date | intrinsic value | |||||||||||||||
shares outstanding | fair value | ||||||||||||||||
US$ | |||||||||||||||||
Nonvested restricted shares outstanding at September 30, 2013 | 125,000 | 1.22 | $ | 330 | |||||||||||||
Granted | 125,000 | 4.58 | |||||||||||||||
Vested | (125,000 | ) | 1.22 | ||||||||||||||
Nonvested restricted shares outstanding at September 30, 2014 | 125,000 | 4.58 | $ | 438 | |||||||||||||
Nonvested restricted shares expected to vest at September 30, 2014 | 125,000 | 4.58 | $ | 438 | |||||||||||||
Share-Based Compensation Expense Of Share-Based Awards Granted | Total share-based compensation expense of share-based awards granted to employees, non-employees and non-executive directors recognized for the years ended September 30, 2012, 2013 and 2014 are as follows: | ||||||||||||||||
As of September 30, | |||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
US$ | US$ | US$ | |||||||||||||||
Cost of services | 37 | 56 | — | ||||||||||||||
General and administrative expenses | 88 | 522 | 503 | ||||||||||||||
Selling expenses | 16 | 47 | — | ||||||||||||||
141 | 625 | 503 | |||||||||||||||
Details_of_Subsidiaries_and_Va
Details of Subsidiaries and Variable Interest Entities (Detail) | 12 Months Ended |
Sep. 30, 2014 | |
China Distance Education Limited (CDEL Hong Kong) | |
Variable Interest Entity [Line Items] | |
Date of establishment | 13-Mar-03 |
Percentage of legal ownership by the Company | 100.00% |
Principal activities | Investment holding and provision of education services |
Practice Enterprises Network China International Links Limited (Pencil) | |
Variable Interest Entity [Line Items] | |
Date of establishment | 23-Feb-10 |
Percentage of legal ownership by the Company | 100.00% |
Principal activities | Inactive |
DL Education Service , LLC ("DL Education") | |
Variable Interest Entity [Line Items] | |
Date of establishment | 27-Sep-12 |
Percentage of legal ownership by the Company | 100.00% |
Principal activities | Inactive |
Beijing Champion Distance Education Technology Co., Ltd. ("Champion Technology") | |
Variable Interest Entity [Line Items] | |
Date of establishment | 5-Jan-04 |
Percentage of legal ownership by the Company | 100.00% |
Principal activities | Provision of technical support and consultancy services and course production |
Beijing Champion Education Technology Co Ltd (Champion Education Technology) | |
Variable Interest Entity [Line Items] | |
Date of establishment | 23-Apr-07 |
Percentage of legal ownership by the Company | 100.00% |
Principal activities | Software licensing and course production |
Beijing Champion Hi-Tech Co Ltd (Beijing Champion) | |
Variable Interest Entity [Line Items] | |
Date of establishment | 12-Jul-00 |
Percentage of legal ownership by the Company | |
Principal activities | Provision of online education services and sales of books and reference materials |
Beijing Caikaowang Company Ltd (Caikaowang) | |
Variable Interest Entity [Line Items] | |
Date of establishment | 28-Nov-07 |
Percentage of legal ownership by the Company | |
Principal activities | Provision of online education services |
Beijing Champion Wangge Education Technology Co Ltd (Champion Wangge) | |
Variable Interest Entity [Line Items] | |
Date of establishment | 24-Jun-08 |
Percentage of legal ownership by the Company | |
Principal activities | Provision of online education services |
Beijing Zhengbao Yucai Education Technology Co Ltd (Zhengbao Yucai) | |
Variable Interest Entity [Line Items] | |
Date of establishment | 19-Feb-09 |
Percentage of legal ownership by the Company | |
Principal activities | Provision of start-up training services |
Beijing Haidian District Champion Training School (Champion Training School) | |
Variable Interest Entity [Line Items] | |
Date of establishment | 19-Feb-09 |
Percentage of legal ownership by the Company | |
Principal activities | Provision of online and offline education services |
Recovered_Sheet1
Organization and Basis of Presentation - Additional Information (Detail) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Basis Of Presentation And Organization [Line Items] | ||
Exclusive purchase right contract term | 10 years | |
Beijing Champion Hi-Tech Co Ltd (Beijing Champion) | ||
Basis Of Presentation And Organization [Line Items] | ||
Percent of assets | 61.00% | 68.00% |
Percent of liabilities | 73.00% | 93.00% |
Financial_Information_of_VIE_a
Financial Information of VIE and VIE's Subsidiaries (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |||
Variable Interest Entity [Line Items] | ||||||
Cash and cash equivalents | $118,075 | $71,919 | ||||
Prepayment and other current assets | 3,749 | 4,087 | ||||
Total current assets | 149,613 | 84,685 | ||||
Total assets | 171,629 | 105,994 | ||||
Total current liabilities | 72,109 | 40,797 | ||||
Total liabilities | 73,219 | 41,474 | ||||
Revenues | 97,196 | 71,360 | 52,102 | |||
Net income | 23,409 | 13,564 | 8,209 | |||
Net cash provided by operating activities | 44,093 | 32,138 | 15,063 | |||
Net cash (used in)/provided by investing activities | -24,180 | 4,506 | 471 | |||
Effects of exchange rate changes | 128 | 1,211 | 410 | |||
Consolidated VIE | ||||||
Variable Interest Entity [Line Items] | ||||||
Cash and cash equivalents | 75,117 | 39,706 | ||||
Prepayment and other current assets | 3,100 | 3,839 | ||||
Total current assets | 87,205 | 54,575 | ||||
Total assets | 104,569 | 72,515 | ||||
Deferred revenue | 23,319 | 17,120 | ||||
Total current liabilities | 53,297 | 38,442 | ||||
Total liabilities | 53,297 | 38,442 | ||||
Total equity | 51,272 | 34,073 | ||||
Revenues | 96,990 | 70,942 | 52,005 | |||
Net income | 31,986 | [1] | 21,062 | [1] | 14,944 | [1] |
Net cash provided by operating activities | 36,326 | 25,755 | 6,958 | |||
Net cash (used in)/provided by investing activities | -850 | -2,521 | 549 | |||
Effects of exchange rate changes | ($65) | $674 | $183 | |||
[1] | This is net income before service fees charged by Champion Technology and Champion Education Technology. |
Property_Plant_and_Equipment_E
Property, Plant and Equipment Estimated Useful Lives of Assets (Detail) | 12 Months Ended |
Sep. 30, 2014 | |
Building | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 35 years |
Building | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated residual value | 5.00% |
Building | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated residual value | 10.00% |
Electronic And Office Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Electronic And Office Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated residual value | 5.00% |
Electronic And Office Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated residual value | 10.00% |
Motor vehicles | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Motor vehicles | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated residual value | 5.00% |
Motor vehicles | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated residual value | 10.00% |
Leasehold Improvement And Building Improvement | |
Property, Plant and Equipment [Line Items] | |
Leasehold improvement and building improvement | Shorter of lease term or 5 years |
Other_Intangible_Assets_Estima
Other Intangible Assets Estimated Useful Lives (Detail) | 12 Months Ended |
Sep. 30, 2014 | |
Computer Software | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 3 years |
Computer Software | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Trademarks and domain names | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 10 years |
Trademarks and domain names | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 11 years |
Courseware | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 1 year |
Courseware | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Website | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Business Contracts | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 3 years |
Business Contracts | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Copyrights | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 5 years |
Platform | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 3 years 6 months |
Recovered_Sheet2
Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Significant Accounting Policies [Line Items] | |||
Advertising expenses from continuing operations | $6,464 | $3,167 | $2,112 |
Advertising expense from discontinued operations | 26 | ||
Shipping and handling costs from continuing operations | 703 | 489 | 252 |
Shipping and handling costs from discontinued operations | 1 | ||
Cash and cash equivalents from the continuing operations and discontinued operations, denominated in RMB | 110,342 | 68,867 | |
Foreign currency risk, cash and cash equivalents, represented amount, percent | 93.50% | 95.80% | |
Accounts Receivable | Concentration Risk Customer One | |||
Significant Accounting Policies [Line Items] | |||
One customers accounts receivable, Maximum percentage | 21.70% | 31.40% | |
Beijing Champion Hi-Tech Co Ltd (Beijing Champion) | |||
Significant Accounting Policies [Line Items] | |||
Recognized revenues before business tax and related surcharges in connection with expired study cards | 114 | 164 | 113 |
Business tax and related surcharges, percent | 3.00% | 3.00% | 3.00% |
Business tax and related surcharges, amount | $2,699 | $1,986 | $1,331 |
PRC value added tax ("VAT"), general rate | 13.00% | ||
Beijing Champion Distance Education Technology Co., Ltd. ("Champion Technology") | |||
Significant Accounting Policies [Line Items] | |||
PRC value added tax ("VAT"), general rate | 6.00% | ||
Beijing Champion Education Technology Co Ltd (Champion Education Technology) | |||
Significant Accounting Policies [Line Items] | |||
PRC value added tax ("VAT"), general rate | 3.00% |
Discontinued_Operations_Additi
Discontinued Operations - Additional Information (Detail) (Gaokao re-take business, USD $) | 4-May-12 |
In Thousands, unless otherwise specified | |
Gaokao re-take business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Total cash proceeds from sale of discontinued operations | $157 |
Assets_and_Liabilities_of_The_
Assets and Liabilities of The Discontinued Operations (Detail) (Gaokao re-take business, USD $) | 4-May-12 |
In Thousands, unless otherwise specified | |
Gaokao re-take business | |
Current assets of discontinued operations: | |
Cash and cash equivalents | $312 |
Accounts receivable, net | 14 |
Prepayment and other current assets | 324 |
Current assets of discontinued operations | 650 |
Current liabilities of discontinued operations: | |
Accrued expenses and other liabilities | 348 |
Income tax payable | 128 |
Deferred revenue, current portion | 314 |
Current liabilities of discontinued operations | 790 |
Net liabilities disposed | -140 |
Cash proceeds | 157 |
Gain on disposition of the discontinued operation | $297 |
Operating_Results_From_Discont
Operating Results From Discontinued Operations Included in Group's Consolidated Statement of Operations (Detail) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2012 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Net income from discontinued operations attributable to China Distance Education Holding Limited, net of tax | $236 |
Gaokao re-take business | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Revenues | 1,045 |
Pre-tax (loss) from discontinued operations | -61 |
Income tax expense | 0 |
(Loss) from discontinued operations, net of tax | -61 |
Gain on disposal of discontinued operation | 297 |
Net income from discontinued operations attributable to China Distance Education Holding Limited, net of tax | $236 |
Accounts_Receivable_Net_Detail
Accounts Receivable Net (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Accounts Receivable, Net, Current [Abstract] | ||
Accounts receivable | $2,887 | $5,291 |
Less: allowance for doubtful accounts | -1,250 | -1,773 |
Accounts receivable, net | $1,637 | $3,518 |
Movement_of_Allowance_For_Doub
Movement of Allowance For Doubtful Accounts (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at beginning of year | $1,773 | $2,092 |
Reversal of the allowance for doubtful accounts | -517 | -371 |
Foreign currency adjustment | -6 | 52 |
Balance at end of the year | $1,250 | $1,773 |
Inventories_Net_Detail
Inventories Net (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ||
Books and other goods | $968 | $708 |
Paper and other raw materials | 121 | 102 |
Less: inventory provisions for slow-moving and obsolescence | -640 | -112 |
Inventories, total | $449 | $698 |
Inventories_Net_Additional_Inf
Inventories Net - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Inventory [Line Items] | |||
Inventories provision | $527 | $67 | $41 |
Recovered_Sheet3
Prepayment and Other Current Assets (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 | ||
In Thousands, unless otherwise specified | ||||
Prepaid Expense and Other Assets, Current [Abstract] | ||||
Advance to the suppliers | $766 | [1] | $1,873 | [1] |
Prepaid expenses | 1,669 | 1,034 | ||
Interest receivable | 369 | 24 | ||
Current portion of receivables related to ITAT program (Note 11) | 285 | |||
Funds receivable | 306 | [2] | 285 | [2] |
Deposits | 23 | 11 | ||
Others | 616 | 575 | ||
Prepayment and other current assets, net | $3,749 | $4,087 | ||
[1] | Advance to the suppliers represents interest-free cash deposits paid to suppliers for future purchase of raw materials and finished goods. The risk of loss arising from non-performance by or bankruptcy of the suppliers is assessed prior to making the deposits and is monitored on a regular basis by management. A charge to cost of sales will be recorded in the period in which a loss incurs. To date, the Group has not experienced any loss of advances to suppliers. | |||
[2] | Funds receivable arise due to the time taken to clear customers' payment transactions through external payment networks. When customers remit fees to the Group via external payment networks using their bank account or credit card, there is a clearing period before the cash is received by the Group which usually takes one to three business days. These fees are treated as a receivable until the cash is received. |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Total | $18,003 | $17,419 |
Less: Accumulated depreciation | -7,282 | -7,217 |
Property, Plant and Equipment, Net | 10,721 | 10,202 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Total | 6,033 | 6,051 |
Electronic And Office Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | 9,896 | 9,523 |
Leasehold Improvement And Building Improvement | ||
Property, Plant and Equipment [Line Items] | ||
Total | 511 | 681 |
Motor vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Total | $1,563 | $1,164 |
Property_Plant_and_Equipment_A
Property, Plant and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Property, Plant and Equipment [Line Items] | |||
Depreciation expenses from continuing operations | $1,808 | $1,848 | $1,606 |
Depreciation expenses from discontinued operations |
Goodwill_Detail
Goodwill (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Goodwill [Line Items] | ||
Beginning balance | $7,711 | $7,511 |
Exchange difference | -22 | 200 |
Ending balance | 7,689 | 7,711 |
Accumulated impairment loss | 0 | 0 |
Goodwill, net | 7,689 | 7,711 |
Online Education Service | ||
Goodwill [Line Items] | ||
Beginning balance | 5,880 | 5,726 |
Exchange difference | -17 | 154 |
Ending balance | 5,863 | 5,880 |
Accumulated impairment loss | 0 | 0 |
Goodwill, net | 5,863 | 5,880 |
Beijing Zhengbao Yucai Education Technology Co Ltd (Zhengbao Yucai) | Startup Training Service | ||
Goodwill [Line Items] | ||
Beginning balance | 1,831 | 1,785 |
Exchange difference | -5 | 46 |
Ending balance | 1,826 | 1,831 |
Accumulated impairment loss | 0 | 0 |
Goodwill, net | $1,826 | $1,831 |
Composition_of_Other_Intangibl
Composition of Other Intangible Assets (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ||
Total intangible assets | $6,822 | $6,334 |
Less: Accumulated amortization | -5,438 | -4,858 |
Other intangible assets, Net | 1,384 | 1,476 |
Computer Software | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ||
Total intangible assets | 3,428 | 2,978 |
Less: Accumulated amortization | -2,595 | -2,275 |
Trademarks and domain names | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ||
Total intangible assets | 1,499 | 1,456 |
Less: Accumulated amortization | -952 | -840 |
Courseware | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ||
Total intangible assets | 486 | 488 |
Less: Accumulated amortization | -486 | -462 |
Business Contracts | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ||
Total intangible assets | 530 | 531 |
Less: Accumulated amortization | -530 | -494 |
Copyrights | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ||
Total intangible assets | 662 | 664 |
Less: Accumulated amortization | -658 | -600 |
Platform | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ||
Total intangible assets | 217 | 217 |
Less: Accumulated amortization | ($217) | ($187) |
Other_Intangible_Assets_Net_Ad
Other Intangible Assets, Net - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Finite-Lived Intangible Assets And Liabilities [Line Items] | |||
Amortization expenses from continuing operations | $592 | $771 | $873 |
Amortization expenses from discontinuing operations |
Estimated_Amortization_Expense
Estimated Amortization Expenses for Other Intangible Assets (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets And Liabilities [Line Items] | ||
2015 | $410 | |
2016 | 363 | |
2017 | 296 | |
2018 | 168 | |
2019 | 95 | |
2020 and thereafter | 52 | |
Other intangible assets, Net | $1,384 | $1,476 |
Deposits_for_NonCurrent_Assets
Deposits for Non-Current Assets (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
Property, Plant and Equipment [Line Items] | ||
Deposit for purchase of non-current assets | $94 | $374 |
Property, Plant And Equipment and Other Intangible Assets | ||
Property, Plant and Equipment [Line Items] | ||
Deposit for purchase of non-current assets | $94 | $374 |
Other_NonCurrent_Assets_Detail
Other Non-Current Assets (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 | ||
In Thousands, unless otherwise specified | ||||
Other Assets Noncurrent [Line Items] | ||||
Long-term prepaid expenses | $1,903 | [1] | $1,207 | [1] |
Long-term receivables related to ITAT program | 171 | [2] | ||
Rental deposits | 225 | [3] | 168 | [3] |
Other Assets, Miscellaneous, Total | $2,128 | $1,546 | ||
[1] | Long-term prepaid expenses represent golf club membership fee. The amortization of the long term prepaid expenses was made within a ten-year amortizing period and was recorded as "general and administrative expenses" on the consolidated statements of operations. | |||
[2] | Long-term receivables represent the non-current portion of prepaid service fee for obtaining government authorization to provide the ITAT program, an information technique application training program, for ten years, starting from 2010. The group amortized such prepayment on a straight-line basis. In 2013, the Group ceased a series of cooperation on ITAT program. As of September 30, 2014, the receivables related to ITAT program, including current portion and non-current portion had been fully settled. | |||
[3] | Rental deposits represent office rental deposits for the Group's daily operations. These deposits are classified as non-current deposits since they will not be refunded within one year. |
Other_NonCurrent_Assets_Parent
Other Non-Current Assets (Parenthetical) (Detail) | 12 Months Ended |
Sep. 30, 2014 | |
Other Assets Noncurrent [Line Items] | |
Period over which golf club membership fee is valid | 10 years |
Components_of_Accrued_Expenses
Components of Accrued Expenses and Other Liabilities (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses and Other Current Liabilities [Line Items] | ||
Accrued expenses | $3,726 | $2,795 |
Salary and welfare payable | 5,222 | 2,775 |
Tuition fee payables to government agencies | 10,096 | 5,132 |
Remuneration payable to lecturers | 1,802 | 2,314 |
Uncertain income tax liabilities (Note 16) | 177 | 177 |
Payables to employees in connection with options exercise | 94 | 458 |
Other payable | 1,578 | 1,421 |
Accrued expenses and other liabilities | $22,695 | $15,072 |
Bank_Borrowing_Additional_Info
Bank Borrowing - Additional Information (Detail) (Term Loan) | 0 Months Ended | |||
In Millions, unless otherwise specified | Dec. 06, 2013 | Dec. 06, 2013 | Dec. 06, 2013 | Dec. 06, 2013 |
China Distance Education Limited (CDEL Hong Kong) | China Distance Education Limited (CDEL Hong Kong) | China Distance Education Limited (CDEL Hong Kong) | Beijing Champion Distance Education Technology Co., Ltd. ("Champion Technology") | |
USD ($) | CNY | CNY | ||
Debt Instrument [Line Items] | ||||
Term loan agreement value | $16 | 100 | ||
Term loan agreement interest rate | 2.40% | 2.40% | ||
Term loan maturity period | 18 months | |||
Term deposit used as collateral | 100 |
Ordinary_Shares_Additional_Inf
Ordinary Shares - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 11, 2014 | Apr. 29, 2011 | Nov. 20, 2008 | |
Class of Stock [Line Items] | ||||||
Stock repurchase program, authorized amount, value | $20,000,000 | $20,000,000 | ||||
Repurchase of ordinary shares | 93,000 | 993,000 | ||||
Net proceeds from issuance of shares | 29,088,000 | |||||
Ordinary shares | ||||||
Class of Stock [Line Items] | ||||||
Repurchase of ordinary shares, shares | 67,100 | 1,285,464 | ||||
Number of shares issued and sold | 6,000,000 | |||||
ADS Shares | Follow-on Public Offering | ||||||
Class of Stock [Line Items] | ||||||
Number of shares issued and sold | 6,000,000 | |||||
Price per share sold | $21 | |||||
Net proceeds from issuance of shares | $29,088,000 | |||||
ADS Shares | Follow-on Public Offering | Selling Shareholders | ||||||
Class of Stock [Line Items] | ||||||
Number of shares issued and sold | 1,500,000 |
Restricted_Net_Assets_Addition
Restricted Net Assets - Additional Information (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Restricted Assets And Liabilities Relating To Securitization [Line Items] | ||
Minimum required percent of annual after-tax profit, general reserve | 10.00% | |
Required reserve, percent of respective registered capital | 50.00% | |
Minimum required percent of annual after-tax profit, statutory common reserve | 10.00% | |
Aggregate amount of paid-in capital and statutory reserves not available for distribution | $23,581 | $23,457 |
Income_Tax_Additional_Informat
Income Tax - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2011 |
Income Tax Disclosure [Line Items] | ||||
Income tax rate | 25.00% | 25.00% | 25.00% | |
Withholding tax on undistributed earnings | 1,276 | 905 | ||
Income tax expenses | 4,052 | 3,797 | 2,600 | |
Income tax reverse | 782 | |||
Unrecognized tax benefits | 177 | 177 | 173 | |
Beijing Champion Hi-Tech Co Ltd (Beijing Champion) | ||||
Income Tax Disclosure [Line Items] | ||||
Preferential income tax rate | 15.00% | 15.00% | 15.00% | |
Beijing Champion Distance Education Technology Co., Ltd. ("Champion Technology") | ||||
Income Tax Disclosure [Line Items] | ||||
Preferential income tax rate | 15.00% | 15.00% | 15.00% | 15.00% |
China Distance Education Limited (CDEL Hong Kong) | ||||
Income Tax Disclosure [Line Items] | ||||
Withholding tax rate | 5.00% | |||
Withholding tax on undistributed earnings | 1,276 | 905 | ||
Income tax expenses | 371 | 271 | 634 |
Income_Loss_before_Income_Taxe
Income (Loss) before Income Taxes from Continuing Operations (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Before Income Taxes [Line Items] | |||
Non - PRC | ($1,757) | ($2,003) | ($1,252) |
PRC | 29,218 | 19,364 | 11,825 |
Income before income taxes | $27,461 | $17,361 | $10,573 |
Current_and_Deferred_Component
Current and Deferred Components of Income Tax Expense from Continuing Operations (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Components Of Income Tax Expense Benefit [Line Items] | |||
Current tax expense | $3,988 | $3,107 | $2,074 |
Deferred tax (benefit)/expense | 64 | 690 | 526 |
Income Tax Expense, Total | $4,052 | $3,797 | $2,600 |
Reconciliation_of_Effective_Ta
Reconciliation of Effective Tax Rate (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Schedule of Effective Tax Rate Reconciliation [Line Items] | |||
Income before taxes | $27,461 | $17,361 | $10,573 |
Income tax expense computed a applicable tax rates of 25% | 6,865 | 4,340 | 2,643 |
Effect of different tax rates in different jurisdictions | 357 | 440 | 255 |
Non-deductible expenses | 94 | 75 | 59 |
Effect of tax holidays | -2,888 | -1,740 | -1,037 |
Effect of valuation allowances | 33 | 194 | 51 |
Effect of tax rate changes | 237 | ||
Withholding tax on undistributed earnings | 373 | 251 | 629 |
Income tax reversal | -782 | ||
Income Tax Expense, Total | $4,052 | $3,797 | $2,600 |
Effective income tax rate | 14.76% | 21.87% | 24.59% |
Reconciliation_of_Effective_Ta1
Reconciliation of Effective Tax Rate (Parenthetical) (Detail) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Schedule of Effective Tax Rate Reconciliation [Line Items] | |||
Income tax expense, applicable tax rates | 25.00% | 25.00% | 25.00% |
Aggregate_Amount_and_Per_Share
Aggregate Amount and Per Share Effect of Tax Holidays (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
The aggregate amount of tax holidays | $2,888 | $1,740 | $1,037 |
Basic | |||
The aggregate effect on basic and diluted net income per share: | $0.02 | $0.01 | $0.01 |
Diluted | |||
The aggregate effect on basic and diluted net income per share: | $0.02 | $0.01 | $0.01 |
Components_of_Deferred_Taxes_f
Components of Deferred Taxes from Continuing Operations (Detail) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Income Tax Assets And Liabilities [Line Items] | ||
Payroll payable | $794 | $409 |
Accrued expenses | 599 | 585 |
Allowance for doubtful accounts | 546 | 518 |
Net operating loss carry-forwards | 255 | 289 |
Total current deferred tax assets | 2,194 | 1,801 |
Less: valuation allowance | -78 | -50 |
Current deferred tax assets, net | 2,116 | 1,751 |
Intangible assets | 19 | 48 |
Property, plant and equipment | 140 | 148 |
Net operating loss carry-forwards | 314 | 372 |
Total non-current deferred tax assets | 473 | 568 |
Less: valuation allowance | -268 | -262 |
Non-current deferred tax assets, net | 205 | 306 |
Intangible assets | 39 | 78 |
Withholding tax on undistributed earnings | 1,276 | 905 |
Total non-current deferred tax liabilities | $1,315 | $983 |
Reconciliation_of_Accrued_Unre
Reconciliation of Accrued Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2014 |
Schedule of Unrecognized Tax Benefits [Line Items] | ||
Beginning balance | $173 | $177 |
Foreign currency adjustment | 4 | |
Ending balance | $177 | $177 |
Recovered_Sheet4
Employee Defined Contribution Plan - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Total contributions to the government, employee benefits, expensed as incurred | $5,331 | $3,910 | $3,199 |
Employee Benefits From Continuing Operations | 5,331 | 3,910 | 3,164 |
Employee benefits from discontinued operations | 35 | ||
Employee benefits, mandatory contributions to defined contribution retirement plans for full time employees in Hong Kong | $2 | $2 | $2 |
Operating_Lease_Commitments_De
Operating Lease Commitments (Detail) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies [Line Items] | |
2015 | $3,389 |
2016 | 193 |
2017 | 11 |
2018 | 0 |
2019 | 0 |
Operating leases, future minimum payments due, total | $3,593 |
Recovered_Sheet5
Commitments and Contingencies - Additional Information (Detail) | 12 Months Ended | |||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 06, 2013 | Dec. 06, 2013 | Dec. 06, 2013 | |
USD ($) | USD ($) | USD ($) | China Distance Education Limited (CDEL Hong Kong) | China Distance Education Limited (CDEL Hong Kong) | Beijing Champion Distance Education Technology Co., Ltd. ("Champion Technology") | |
Term Loan | Term Loan | Term Loan | ||||
USD ($) | CNY | CNY | ||||
Commitment And Contingencies [Line Items] | ||||||
Operating leases rent expenses, continuing operations | $5,786,000 | $3,904,000 | $3,346,000 | |||
Operating leases rent expenses, discontinued operations | 314,000 | |||||
Term loan agreement value | 16,000,000 | 100,000,000 | ||||
Term deposit used as collateral | 100,000,000 |
Revenues_Attributable_to_Diffe
Revenues Attributable to Different Service and Product Groups (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Segment Reporting Information [Line Items] | |||
Revenues | $97,196 | $71,360 | $52,102 |
Online Education Service | |||
Segment Reporting Information [Line Items] | |||
Revenues | 80,545 | 58,573 | 40,281 |
Books And Reference Materials | |||
Segment Reporting Information [Line Items] | |||
Revenues | 6,392 | 5,129 | 4,438 |
Offline Education Service | |||
Segment Reporting Information [Line Items] | |||
Revenues | 7,817 | 4,617 | 4,507 |
Others | |||
Segment Reporting Information [Line Items] | |||
Revenues | $2,442 | $3,041 | $2,876 |
Segment_Reporting_Additional_I
Segment Reporting - Additional Information (Detail) (Online Education Service, Sales Revenue, Net) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Online Education Service | Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Percentage of total contract revenue from Online education services, percent | 82.90% | 82.10% | 77.30% |
Basic_and_Diluted_Net_Income_p
Basic and Diluted Net Income per Share (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share Disclosure [Line Items] | |||
Net income from continuing operations | $23,409 | $13,564 | $7,973 |
Net income from discontinued operations, net of tax | 236 | ||
Net income (attributable to China Distance Education Holdings Limited | 23,409 | 13,564 | 8,209 |
Allocated to ordinary share - basic | 23,392 | 13,554 | 8,209 |
Allocated to nonvested restricted share - basic | $17 | $10 | |
Weighted average number of ordinary shares outstanding | 139,613,967 | 135,174,562 | 133,996,737 |
Weighted average number of nonvested restricted share | 102,754 | 103,082 | |
Plus incremental weighted average ordinary shares from assumed exercise of share options using the treasury stock method | 780,483 | 1,121,589 | 366,371 |
Weighted average ordinary shares outstanding used in computing diluted net income per share | 140,497,204 | 136,399,233 | 134,363,108 |
Basic net income per share, Basic from continuing operations | $0.17 | $0.10 | $0.06 |
Basic net income per share, Basic from discontinued operations (net of tax) | $0 | ||
Basic net income per share, Basic | $0.17 | $0.10 | $0.06 |
Basic net income per nonvested restricted share, Basic from continuing operations | $0.17 | $0.10 | |
Basic net income per nonvested restricted share, Basic from discontinued operations (net of tax) | $0 | $0 | $0 |
Basic net income per nonvested restricted share, Basic | $0.17 | $0.10 | |
Diluted from continuing operations | $0.17 | $0.10 | $0.06 |
Diluted from discontinued operations (net of tax) | $0 | ||
Diluted net income per share, Diluted | $0.17 | $0.10 | $0.06 |
Share_Incentive_Plan_Additiona
Share Incentive Plan - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Jul. 02, 2008 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Jan. 08, 2014 | Apr. 18, 2008 | Dec. 03, 2013 | Dec. 03, 2012 | Dec. 02, 2013 | 21-May-13 | Nov. 17, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Maximum number of ordinary shares that may be issued pursuant to the Prior Plan, shares | 11,652,556 | ||||||||||
Ordinary shares, par value | $0.00 | $0.00 | 0.0001 | ||||||||
Maximum number of ordinary shares that may be issued pursuant to the New Plan, percent | 5.00% | ||||||||||
Total share base compensation | $503 | $625 | $141 | ||||||||
Total intrinsic value of options exercised | 3,906 | ||||||||||
Nonvested restricted shares granted | 125,000 | ||||||||||
Shares vested on grant date | 125,000 | ||||||||||
Grant date fair value non vested restricted share | $4.58 | ||||||||||
Share-based compensation expenses | 503 | 625 | 141 | ||||||||
Non Employee | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Dividends payable, amount per share | $0.15 | ||||||||||
Authorized reduction in exercise price of outstanding options | $0.15 | ||||||||||
Employee Stock Option | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 4 years | ||||||||||
Contractual terms | 10 years | ||||||||||
Share Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Vesting period | 1 year | ||||||||||
Options Cancelled | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total share base compensation | 146 | ||||||||||
Non Vested Restricted Stock Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Nonvested restricted shares granted | 125,000 | 225,000 | |||||||||
Shares vested on grant date | 100,000 | ||||||||||
Grant date fair value non vested restricted share | $4.58 | $1.22 | |||||||||
Total share base compensation | 573 | 276 | |||||||||
Share-based compensation expenses | 122 | 154 | |||||||||
Share-based compensation requisite service period | 1 year | 1 year | |||||||||
Nonvested Shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Share-based compensation expenses | 503 | 250 | 21 | ||||||||
Total fair value of shares vested | 153 | 122 | |||||||||
Share-based compensation related to nonvested shares that is expected to be recognized | $95 | ||||||||||
Share-based compensation related to nonvested shares that is expected to be recognized, weighted average period | 2 months 12 days | ||||||||||
Director | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Options cancelled | 400,000 | ||||||||||
Employees | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Options cancelled | 720,900 | ||||||||||
Exercise price per share | $1.87 |
Summary_of_Option_Activity_Det
Summary of Option Activity (Detail) (Employees, USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares, Outstanding, Beginning | 1,579,732 | |
Number of shares, Exercised | -1,095,732 | |
Number of shares, Outstanding, Ending | 484,000 | 1,579,732 |
Number of shares, Exercisable | 484,000 | |
Weighted-average exercise price, Outstanding, Beginning | $0.50 | |
Weighted-average exercise price, Exercised | $0.45 | |
Weighted-average exercise price, Outstanding, Ending | $0.35 | $0.50 |
Weighted-average exercise price: Exercisable | $0.35 | |
Weighted-average remaining contractual term (years), Outstanding | 5 years 8 months 23 days | 6 years 4 months 13 days |
Weighted-average remaining contractual term (years), Exercisable | 5 years 8 months 23 days | |
Aggregated intrinsic value, Outstanding, Beginning | $3,389 | |
Aggregated intrinsic value, Outstanding, Ending | 1,528 | 3,389 |
Aggregated intrinsic value, Exercisable | $1,528 |
Share_Options_Nonemployees_Det
Share Options, Nonemployees (Detail) (Non Employee, USD $) | 12 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Non Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares, Outstanding, Beginning | 128,200 | |
Number of shares, Exercised | 0 | |
Number of shares, Outstanding, Ending | 128,200 | 128,200 |
Number of shares, Exercisable | 128,200 | |
Weighted-average exercise price, Outstanding, Beginning | $0.50 | |
Weighted-average exercise price, Exercised | $0 | |
Weighted-average exercise price, Outstanding, Ending | $0.35 | $0.50 |
Weighted-average exercise price: Exercisable | $0.35 | |
Weighted-average remaining contractual term (years), Outstanding | 3 years 6 months 18 days | 4 years 6 months 18 days |
Weighted-average remaining contractual term (years), Exercisable | 3 years 6 months 18 days | |
Aggregated intrinsic value, Outstanding, Beginning | $275 | |
Aggregated intrinsic value, Outstanding, Ending | 405 | 275 |
Aggregated intrinsic value, Exercisable | $405 |
Nonvested_Restricted_Shares_Ac
Nonvested Restricted Shares Activity (Detail) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Nonvested restricted shares outstanding, Beginning balance | 125,000 | |
Granted | 125,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | -125,000 | |
Nonvested restricted shares outstanding, Ending balance | 125,000 | |
Nonvested restricted shares, Expected to vest | 125,000 | |
Weighted average grant-date fair value, outstanding Beginning balance | $1.22 | |
Weighted average grant-date fair value, Granted | $4.58 | |
Weighted average grant-date fair value, Vested | $1.22 | |
Weighted average grant-date fair value, outstanding Ending balance | $4.58 | |
Weighted average grant-date fair value, Expected to vest | $4.58 | |
Aggregated intrinsic value, Nonvested restricted shares outstanding | 438,000 | 330,000 |
Aggregated intrinsic value, Expected to vest | $438,000 |
Total_ShareBased_Compensation_
Total Share-Based Compensation Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total share-based compensation expense | $503 | $625 | $141 |
Cost of Services | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total share-based compensation expense | 56 | 37 | |
General and Administrative Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total share-based compensation expense | 503 | 522 | 88 |
Selling Expense | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total share-based compensation expense | $47 | $16 |
Cash_Dividend_Additional_Infor
Cash Dividend - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Nov. 20, 2013 | Nov. 13, 2012 | Nov. 16, 2011 | Sep. 30, 2014 | Sep. 30, 2013 | Jan. 08, 2014 | Dec. 07, 2012 | Dec. 15, 2011 |
Cash dividend declared per ordinary share | $0.15 | $0.12 | $0.12 | |||||
Ordinary shares, outstanding | 142,752,873 | 135,532,141 | 136,409,633 | 135,409,521 | 135,565,361 | |||
Dividends | $20,258 | $16,056 | $16,268 | $20,258 | $16,056 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 12 Months Ended | 0 Months Ended | |||
Sep. 30, 2014 | Dec. 03, 2013 | Dec. 03, 2012 | Nov. 18, 2014 | Jan. 12, 2015 | |
Subsequent Event [Line Items] | |||||
Nonvested restricted shares granted | 125,000 | ||||
Non Vested Restricted Stock Awards | |||||
Subsequent Event [Line Items] | |||||
Nonvested restricted shares granted | 125,000 | 225,000 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Share options granted | 2,800,000 | ||||
Share options granted to selected employees exercise, price | $3.74 | ||||
Vesting period | 4 years | ||||
Vesting schedule | 25.00% | ||||
Dividends payable, date declared | 18-Nov-14 | ||||
Dividends payable, amount per share | $0.20 | ||||
Dividends payable, date of record | 6-Jan-15 | ||||
Subsequent Event | Non Vested Restricted Stock Awards | |||||
Subsequent Event [Line Items] | |||||
Vesting period | 4 years | ||||
Nonvested restricted shares granted | 542,372 | ||||
Subsequent Event | Non Vested Restricted Stock Awards | First anniversary | |||||
Subsequent Event [Line Items] | |||||
Vesting schedule | 25.00% | ||||
Subsequent Event | Non Vested Restricted Stock Awards | Six substantially equal semi-annual installments | |||||
Subsequent Event [Line Items] | |||||
Vesting schedule | 75.00% |