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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

 
FORM 20-F/A
 
AMENDMENT NO. 1

 
(Mark One)

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934	
 	 	
or	
 	 	
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2016	
 	 	
or	
 	 	
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
 	 	
or	
 	 	
o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	

 	Date of event requiring this shell company report	
 
Commission file number: 001-36356

NORD ANGLIA EDUCATION, INC.	
(Exact name of Registrant as specified in its charter)	

N/A	
(Translation of Registrant’s name into English)	
 	
Cayman Islands	
(Jurisdiction of incorporation or organization)	
 	
Level 12, St. George’s Building, 2 Ice House Street,
Central, Hong Kong	
(Address of principal executive offices)	
 	
Andrew Fitzmaurice, Chief Executive Officer
Tel:  +852 3951 1100
E-mail:  Andrew.Fitzmaurice@nordanglia.com
Level 12, St. George’s Building
2 Ice House Street
Central, Hong Kong	
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)	
 
Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	 	Name of each exchange on which registered	
Ordinary shares, par value $0.01 per share	 	The New York Stock Exchange	
 
Securities registered or to be registered pursuant to Section 12(g) of the Act:

None	
(Title of Class)	

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Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None	
(Title of Class)	
 
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

 	104,121,876 ordinary shares, par value $0.01 per share, as of August 31, 2016.	
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
x Yes    o No
 
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
o Yes    x No
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
x Yes    o No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
x Yes    o No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	 	Accelerated filer x	
 	 	 	
Non-accelerated filer  o	 	Emerging growth company x	
 
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. o
 
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
 
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP o	 	International Financial Reporting Standards as issued
by the International Accounting Standards Board x	Other o	
 
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
o Item 17    o Item 18
 
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o Yes    x No
 
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
 
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
 
o Yes    o No

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EXPLANATORY NOTE
 
Nord Anglia Education, Inc. (the “Company”) is filing this Amendment No. 1 (this “Amendment”) to its annual report on Form 20-F for the fiscal year ended August 31, 2016 (the “Original Form 20-F”) filed with the SEC on November 29, 2016 (the “Original Filing Date”).  This Amendment amends Item 7 and Item 18 of the Original Form 20-F to disclose a related-party transaction that occurred during the Company’s fiscal year ended August 31, 2015.  The amendment to Item 18 consists of the addition of the following Note 29(i) to the Company’s audited consolidated financial statements included in this Amendment:
 
During the year ended August 31, 2015, Premier Education Holdings Limited made discretionary payments in cash to key management personnel and a non-executive director, totaling $12.8 million. The payments were made to incentivize certain key management personnel not to sell their shares. The Group was not party to, and incurred no liability in respect of, these payments. In accordance with IFRS these payments are not required to be recorded in the Group’s Consolidated Income Statement, Consolidated Statement of Comprehensive Income/(Loss) or the Consolidated Balance Sheet.
 
Disclosure of this transaction was not included in the August 31, 2015 and August 31, 2016 consolidated financial statements. The Group considers that this should have been disclosed as a related party transaction in the August 31, 2015 consolidated financial statements and with respect to the comparative period in the August 31, 2016 consolidated financial statements. The Group has corrected the disclosure by revising the consolidated financial statements.
 
As required by Rule 12b-15 under the Exchange Act, updated certifications of our principal executive officer and our principal financial officer are being filed as exhibits to this Amendment. This Amendment also includes a new Exhibit 15.1, which contains the consent of our independent registered public accounting firm with respect to this Amendment.
 
This Amendment speaks as of the Original Filing Date and, except as specifically provided above, this Amendment does not amend, update or restate any other items or sections of the Original Form 20-F and does not reflect events occurring after the Original Filing Date. The filing of this Amendment, and the inclusion of newly executed certifications, should not be understood to mean that any other statements contained in the Original Form 20-F are true and complete as of any date subsequent to the Original Filing Date.
 
Item 7.                   Major Shareholders and Related Party Transactions
 
A.            Major Shareholders
 
Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”
 
B.            Related Party Transactions
 
In June 2015, Premier Education Holdings made discretionary cash payments to Andrew Fitzmaurice, Chief Executive Officer and Director of the Company, Graeme Halder, Chief Financial Officer and Director of the Company, Philippe Lagger, Corporate Development Director of the Company, and Alan Kelsey, Chairman of the Board, in the amounts of approximately US$10,600,000, US$1,100,000, US$450,000 and US$44,000 respectively.  The payments were made to incentivize certain key management personnel not to sell their shares. The Company was not party to these payments and incurred no liability in respect of these payments.
 
C.            Interests of Experts and Counsel
 
Not applicable.

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Item 18.                                                   Financial Statements
 
The audited consolidated financial statements as required under Item 18 are attached hereto starting on page F-1 of this annual report.
 
Item 19.                                                   Exhibits

Exhibit
Number	 	Description of Document	
1.1	 	Seventh Amended and Restated Memorandum and Articles of Association of Nord Anglia Education, Inc. dated as of March 10, 2014 (incorporated by reference to Exhibit 3.2 of our Registration Statement on Form F-1 (file No. 333-193989), as amended, filed with the Securities and Exchange Commission on March 11, 2014)	
 	 	 	
2.1	 	Indenture dated June 25, 2015 relating to the Registrant’s CHF200,000,000 5.750% Senior Secured Notes Due 2022 (incorporated by reference to Exhibit 2.1 of our annual report on Form 20-F (file No. 001-36356) filed with the Securities and Exchange Commission on December 31, 2015)	
 	 	 	
4.1	 	2014 Equity Incentive Award Plan (incorporated by reference to Exhibit 4.1 of our Registration Statement on Form S-8 (file No. 333-195020) filed with the Securities and Exchange Commission on April 3, 2014)	
 	 	 	
4.2	 	Amendment and Restatement Agreement dated January 13, 2014 related to an up to $40,000,000 Senior Revolving Facility Agreement dated March 21, 2012 (as amended on October 24, 2012) of Nord Anglia Education (UK) Holdings plc (incorporated by reference to Exhibit 10.8 of our Registration Statement on Form F-1 (file No. 333-193989), as amended, initially filed with the Securities and Exchange Commission on February 18, 2014)	
 	 	 	
4.3	 	Revolving Facility Agreement dated January 13, 2014 made between, among others, Nord Anglia Education (UK) Holdings plc, The Hongkong and Shanghai Banking Corporation Limited as mandated lead arranger and bookrunner, The Hongkong and Shanghai Banking Corporation Limited as agent and Citicorp International Limited as security agent (incorporated by reference to Exhibit 10.9 of our Registration Statement on Form F-1 (file No. 333-193989), as amended, initially filed with the Securities and Exchange Commission on February 18, 2014)	
 	 	 	
4.4	 	Credit and Guaranty Agreement dated as of March 31, 2014 of Nord Anglia Education Finance LLC (incorporated by reference to Exhibit 4.18 of our annual report on Form 20-F (file No. 001-36356) filed with the Securities and Exchange Commission on November 19, 2014)	
 	 	 	
4.5	 	Amended and Restated Credit and Guaranty Agreement dated as of June 25, 2015 of Nord Anglia Education Finance LLC (incorporated by reference to Exhibit 4.5 of our annual report on Form 20-F (file No. 001-36356) filed with the Securities and Exchange Commission on December 31, 2015)	
 	 	 	
4.6	 	Intercreditor Agreement dated as of June 25, 2015 made between, among others, Nord Anglia Education, Inc., Nord Anglia Education Finance LLC and HSBC Bank USA, N.A., HSBC Bank PLC and Citicorp International Limited (incorporated by reference to Exhibit 4.6 of our annual report on Form 20-F (file No. 001-36356) filed with the Securities and Exchange Commission on December 31, 2015)	
 	 	 	
4.7	 	Share Purchase Agreement, dated October 14, 2014, in relation to acquisition of 100% share capital of BIS Ltd. between Stellar View Limited as the Seller, the Seller Guarantors named therein, Nord Anglia Education Limited as the Purchaser Guarantor and NAE Hong Kong Limited as the Purchaser (incorporated by reference to Exhibit 2.1 of our Registration Statement on Form F-3 (file No. 333-204586), as amended, filed with the Securities and Exchange Commission on May 29, 2015)	
 	 	 	
4.8	 	Deed of Novation and Amendment, dated February 11, 2015, relating to Share Purchase Agreement dated October 14, 2014, between Stellar View Limited as the Seller, the Seller Guarantors named therein, Nord Anglia Education Limited as the Purchaser Guarantor, NAE Hong Kong Limited as the Transferor and NAE HK Holdings Limited as the Transferee (incorporated by reference to Exhibit 2.2 of our Registration Statement on Form F-3 (file No. 333-204586), as amended, filed with the Securities and Exchange Commission on May 29, 2015)	

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4.9	 	Transaction Agreement, dated as of April 24, 2015, by and among Nord Anglia Education, Inc., Viking Holdco, Inc., Viking Merger Subsidiary, LLC, NAE HK Holdings Limited, Meritas, LLC, Viking Holding Company, LLC, Sterling International Schools, Sterling International Schools C Corporation and the sellers listed on the schedule thereto (incorporated by reference to Exhibit 2.3 of our Registration Statement on Form F-3 (file No. 333-204586), as amended, filed with the Securities and Exchange Commission on May 29, 2015)	
 	 	 	
4.10	 	Letter Agreement, dated as of May 26, 2015, by and among Meritas, LLC, Viking Holding Company, LLC, Sterling International Schools C Corporation, Sterling International Schools, Meritas, LLC, as Sellers’ Representative, Nord Anglia Education, Inc., Viking Holdco, Inc., Viking Merger Subsidiary, LLC and NAE HK Holdings Limited (incorporated by reference to Exhibit 2.4 of our Registration Statement on Form F-3 (file No. 333-204586), as amended, filed with the Securities and Exchange Commission on May 29, 2015)	
 	 	 	
4.11*	 	Purchase and Sale Agreement, dated February 25, 2016, by and between North Broward Preparatory Schools, LLC and BMOC-MIA (FL) LLC	
 	 	 	
4.12*	 	Purchase and Sale Agreement, dated February 25, 2016, by and between Village Real Estate LLC and BMOC-HOU (TX) LP	
 	 	 	
4.13*	 	Purchase and Sale Agreement, dated February 25, 2016, by and between Collegiate Prep Realty, LLC and BMOC-ORL (FL) LLC	
 	 	 	
8.1*	 	Subsidiaries of the Registrant	
 	 	 	
12.1**	 	CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	
 	 	 	
12.2**	 	CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	
 	 	 	
13.1**	 	CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	
 	 	 	
13.2**	 	CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	
 	 	 	
15.1**	 	Consent of PricewaterhouseCoopers, Hong Kong	

*                  Previously filed with the annual report on Form 20-F on November 29, 2016.
 
**           Filed with this Amendment No. 1 on Form 20-F/A.

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SIGNATURES
 
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned to sign this Amendment to the annual report on its behalf.

 	Nord Anglia Education, Inc.	

 	By:	/s/ Andrew Fitzmaurice	
 	 	Name: Andrew Fitzmaurice	
 	 	Title: Chief Executive Officer	
 
Date:  June 9, 2017

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Contents 

 	Pages	
 	 	
Report of Independent Registered Public Accounting Firm	F-2	
 	 	
Consolidated Income Statement for the year ended August 31, 2016	F-3	
 	 	
Consolidated Statement of Comprehensive Income/(Loss) for the year ended August 31, 2016	F-4	
 	 	
Consolidated Balance Sheet as at August 31, 2016	F-5 - F-6	
 	 	
Consolidated Statement of Changes in Equity for the year ended August 31, 2016	F-7 - F-9	
 	 	
Consolidated Cash Flow Statement for the year ended August 31, 2016	F-10	
 	 	
Notes to the Financial Statements for the year ended August 31, 2016	F-11 - F-111	
 	 	
Parent Company Financial Information	F-112 - F-120	
 
F- 1 

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Report of Independent Registered Public Accounting Firm 
 
To the Board of Directors and Shareholders of Nord Anglia Education, Inc.
 
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, statement of comprehensive income/(loss), changes in equity and cash flows present fairly, in all material respects, the financial position of Nord Anglia Education, Inc. as at August 31, 2016, August 31, 2015 and September 1, 2014, and the results of their operations and their cash flows for each of the three years in the period ended August 31, 2016 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers
Hong Kong
November 29, 2016, except for Note 29(i) as to which the date is June 9, 2017
 
PricewaterhouseCoopers,22/F Prince’s Building, Central Hong Kong
T: +852 2289 8888, F: +852 2810 9888, www.pwchk.com
 
F- 2 

 

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Consolidated Income Statement 
for the three years ended August 31

 	 	 	 	2014	 	2015	 	2016	 	
 	 	Note	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Revenue	 	3	 	474.6	 	573.1	 	856.0	 	
Cost of sales	 	 	 	(280.3	)	(355.8	)	(522.2	)	
 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	 	194.3	 	217.3	 	333.8	 	
 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	 	 	(96.9	)	(129.8	)	(192.7	)	
Depreciation	 	 	 	(2.0	)	(0.7	)	(0.8	)	
Amortization	 	13	 	(10.4	)	(13.9	)	(18.7	)	
Impairment	 	13	 	—	 	—	 	(1.0	)	
Other gains	 	5	 	2.1	 	12.4	 	13.4	 	
Exceptional expenses	 	4	 	(100.2	)	(18.8	)	(8.8	)	
 	 	 	 	 	 	 	 	 	 	
Total expenses	 	6	 	(207.4	)	(150.8	)	(208.6	)	
 	 	 	 	 	 	 	 	 	 	
Operating profit/(loss)	 	 	 	(13.1	)	66.5	 	125.2	 	
 	 	 	 	 	 	 	 	 	 	
Finance income	 	9	 	2.0	 	2.4	 	2.3	 	
Finance expense	 	9	 	(55.5	)	(48.7	)	(65.9	)	
 	 	 	 	 	 	 	 	 	 	
Net financing expense	 	 	 	(53.5	)	(46.3	)	(63.6	)	
 	 	 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	 	 	(66.6	)	20.2	 	61.6	 	
Income tax expense	 	10	 	(23.6	)	(12.5	)	(12.4	)	
 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the year	 	 	 	(90.2	)	7.7	 	49.2	 	
 	 	 	 	 	 	 	 	 	 	
Attributable to:	 	 	 	 	 	 	 	 	 	
Owners of the parent	 	 	 	(90.2	)	6.5	 	47.1	 	
Non-controlling interest	 	 	 	—	 	1.2	 	2.1	 	
 	 	 	 	 	 	 	 	 	 	
Earnings/(loss) per share from continuing operations attributable to the owners of the parent during the year (expressed in $ per share):	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Basic earnings/(loss) per share	 	30	 	(1.07	)	0.07	 	0.45	 	
 	 	 	 	 	 	 	 	 	 	
Diluted earnings/(loss) per share	 	30	 	(1.07	)	0.07	 	0.45	 	
 
The notes on pages F-11 to F-111 form an integral part of these financial statements.
 
F- 3 

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Consolidated Statement of Comprehensive Income/(Loss) 
for the three years ended August 31

 	 	 	 	2014	 	2015	 	2016	 	
 	 	Note	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the year	 	 	 	(90.2	)	7.7	 	49.2	 	
 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss	 	 	 	 	 	 	 	 	 	
Items that will not be reclassified to profit or loss:	 	 	 	 	 	 	 	 	 	
Actuarial losses on defined benefit pension plans	 	22	 	(5.3	)	(11.3	)	(7.2	)	
 	 	 	 	 	 	 	 	 	 	
Tax relating to items that will not be reclassified to profit or loss	 	15	 	0.2	 	0.9	 	3.3	 	
 	 	 	 	 	 	 	 	 	 	
Items that may be subsequently reclassified to profit or loss	 	 	 	 	 	 	 	 	 	
Foreign exchange translation losses	 	 	 	(9.2	)	(51.6	)	(40.9	)	
 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss for the year, net of income tax	 	 	 	(14.3	)	(62.0	)	(44.8	)	
 	 	 	 	 	 	 	 	 	 	
Total comprehensive income/(loss) for the year	 	 	 	(104.5	)	(54.3	)	4.4	 	
 	 	 	 	 	 	 	 	 	 	
Attributable to:	 	 	 	 	 	 	 	 	 	
Owners of the parent	 	 	 	(104.5	)	(55.5	)	2.3	 	
Non-controlling interest	 	 	 	—	 	1.2	 	2.1	 	
 	 	 	 	 	 	 	 	 	 	
Total comprehensive income/(loss) for the year	 	 	 	(104.5	)	(54.3	)	4.4	 	
 
The notes on pages F-11 to F-111 form an integral part of these financial statements.
 
F- 4 

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Consolidated Balance Sheet 
as at September 1, 2014, August 31, 2015 and 2016

 	 	 	 	September 1,
2014	 	August 31,
2015	 	August 31,
2016	 	
 	 	Note	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Non-current assets	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	11	 	140.1	 	464.9	 	328.5	 	
Intangible assets	 	13	 	796.3	 	1,402.5	 	1,365.4	 	
Investments in joint ventures and associates	 	14	 	0.5	 	0.5	 	0.5	 	
Trade and other receivables	 	16	 	9.2	 	37.4	 	42.0	 	
Deferred lease expense	 	1	 	8.7	 	17.1	 	30.6	 	
Deferred tax assets	 	15	 	25.1	 	77.5	 	79.0	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	979.9	 	1,999.9	 	1,846.0	 	
Current assets	 	 	 	 	 	 	 	 	 	
Current tax assets	 	 	 	1.6	 	1.2	 	3.4	 	
Inventories	 	18	 	2.4	 	4.5	 	4.3	 	
Trade and other receivables	 	16	 	92.4	 	126.8	 	132.5	 	
Deferred lease expense	 	1	 	0.5	 	0.9	 	1.7	 	
Cash and cash equivalents (excluding bank overdrafts)	 	17	 	256.4	 	316.6	 	371.9	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	353.3	 	450.0	 	513.8	 	
Assets held for sale	 	12	 	—	 	—	 	8.3	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	353.3	 	450.0	 	522.1	 	
 	 	 	 	 	 	 	 	 	 	
Total assets	 	 	 	1,333.2	 	2,449.9	 	2,368.1	 	
 	 	 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	 	 	
Trade and other payables	 	21	 	(63.7	)	(170.7	)	(140.3	)	
Interest-bearing loans and borrowings	 	19	 	(113.4	)	(98.3	)	(5.0	)	
Finance lease liabilities	 	20	 	(0.0	)	(0.8	)	(1.2	)	
Deferred revenue	 	 	 	(322.6	)	(518.2	)	(550.0	)	
Deferred gain	 	1	 	—	 	(0.2	)	(0.2	)	
Provisions for other liabilities and charges	 	23	 	(0.5	)	(0.0	)	(0.0	)	
Current tax liabilities	 	 	 	(1.7	)	(2.7	)	(4.5	)	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	(501.9	)	(790.9	)	(701.2	)	
Non-current liabilities	 	 	 	 	 	 	 	 	 	
Interest-bearing loans and borrowings	 	19	 	(499.2	)	(1,066.3	)	(1,058.2	)	
Derivative financial instruments	 	25	 	(11.1	)	(21.6	)	(25.2	)	
Finance lease liabilities	 	20	 	—	 	(48.0	)	(63.3	)	
Other payables	 	21	 	(50.7	)	(49.6	)	(49.1	)	
Deferred revenue	 	 	 	(2.6	)	(7.0	)	(8.0	)	
Deferred gain	 	1	 	—	 	(12.4	)	(12.1	)	
Retirement benefit obligations	 	22	 	(25.8	)	(46.6	)	(48.9	)	
Provisions for other liabilities and charges	 	23	 	(1.2	)	(1.7	)	—	 	
Deferred tax liabilities	 	15	 	(47.6	)	(124.3	)	(110.2	)	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	(638.2	)	(1,377.5	)	(1,375.0	)	
 	 	 	 	 	 	 	 	 	 	
Total liabilities	 	 	 	(1,140.1	)	(2,168.4	)	(2,076.2	)	
 	 	 	 	 	 	 	 	 	 	
Net assets	 	 	 	193.1	 	281.5	 	291.9	 	
 
The notes on pages F-11 to F-111 form an integral part of these financial statements.
 
F- 5 

Table of Contents
 
Consolidated Balance Sheet
as at September 1, 2014, August 31, 2015 and 2016 (continued)

 	 	 	 	September 1,
2014	 	August 31,
2015	 	August 31,
2016	 	
 	 	Note	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Equity attributable to equity holders of the parent	 	 	 	 	 	 	 	 	 	
Share capital	 	24	 	1.0	 	1.0	 	1.0	 	
Share premium	 	24	 	597.1	 	735.2	 	736.0	 	
Other reserves	 	 	 	6.9	 	6.9	 	6.9	 	
Currency translation reserve	 	 	 	0.8	 	(50.8	)	(91.7	)	
Shareholder deficit	 	 	 	(413.2	)	(415.2	)	(365.7	)	
 	 	 	 	 	 	 	 	 	 	
Shareholders’ funds	 	 	 	192.6	 	277.1	 	286.5	 	
Non-controlling interest	 	 	 	0.5	 	4.4	 	5.4	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	193.1	 	281.5	 	291.9	 	
 
The notes on pages F-11 to F-111 form an integral part of these financial statements.
 
These financial statements set out on pages F-3 to F-111 were approved by the board of Directors on November 29, 2016 and were signed on its behalf by:

A Fitzmaurice	G Halder	
Director	Director	
November 29, 2016	November 29, 2016	
Company number: MC-264950	 	
 
F- 6 

Table of Contents
 
Consolidated Statement of Changes in Equity 
for the three years ended August 31

 	 	Share
capital	 	Share
premium	 	Other
reserves	 	Currency
translation
reserves	 	Shareholders’
deficit	 	Total
parent
equity	 	Non-
controlling
interest	 	Total equity	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2013	 	67.5	 	256.5	 	6.9	 	10.0	 	(320.9	)	20.0	 	0.5	 	20.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss for the year	 	—	 	—	 	—	 	—	 	(90.2	)	(90.2	)	—	 	(90.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Currency translation differences	 	—	 	—	 	—	 	(9.2	)	—	 	(9.2	)	—	 	(9.2	)	
Actuarial losses on defined benefit pension schemes	 	—	 	—	 	—	 	—	 	(5.1	)	(5.1	)	—	 	(5.1	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss for the year	 	—	 	—	 	—	 	(9.2	)	(95.3	)	(104.5	)	—	 	(104.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Transactions with owners, recorded directly in equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from ordinary shares issued	 	1.0	 	348.6	 	—	 	—	 	—	 	349.6	 	—	 	349.6	 	
Issuance of preference shares	 	0.0	 	3.8	 	—	 	—	 	—	 	3.8	 	—	 	3.8	 	
Contribution from parent	 	—	 	14.5	 	—	 	—	 	—	 	14.5	 	—	 	14.5	 	
Transaction cost recognized directly in equity	 	—	 	(29.6	)	—	 	—	 	—	 	(29.6	)	—	 	(29.6	)	
Return of capital to pre-IPO shareholders	 	(67.5	)	4.0	 	—	 	—	 	—	 	(63.5	)	—	 	(63.5	)	
Forgiveness of loan	 	—	 	14.3	 	—	 	—	 	—	 	14.3	 	—	 	14.3	 	
Distribution to parent	 	—	 	(15.0	)	—	 	—	 	—	 	(15.0	)	—	 	(15.0	)	
Equity-settled share-based payment transactions	 	—	 	—	 	—	 	—	 	3.0	 	3.0	 	—	 	3.0	 	
Equity dividends paid	 	—	 	—	 	—	 	—	 	0.0	 	0.0	 	—	 	0.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total contributions by and distributions to owners	 	(66.5	)	340.6	 	—	 	—	 	3.0	 	277.1	 	—	 	277.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2014	 	1.0	 	597.1	 	6.9	 	0.8	 	(413.2	)	192.6	 	0.5	 	193.1	 	
 
The notes on pages F-11 to F-111 form an integral part of these financial statements.
 
F- 7 

Table of Contents
 
Consolidated Statement of Changes in Equity
for the three years ended August 31 (continued)

 	 	Share
capital	 	Share
premium	 	Other
reserves	 	Currency
translation
reserves	 	Shareholders’
deficit	 	Total
parent
equity	 	Non-
controlling
interest	 	Total equity	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2014	 	1.0	 	597.1	 	6.9	 	0.8	 	(413.2	)	192.6	 	0.5	 	193.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income for the year	 	—	 	—	 	—	 	—	 	6.5	 	6.5	 	1.2	 	7.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive (loss)/income for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Currency translation differences	 	—	 	—	 	—	 	(51.6	)	—	 	(51.6	)	0.0	 	(51.6	)	
Actuarial losses on defined benefit pension schemes	 	—	 	—	 	—	 	—	 	(10.4	)	(10.4	)	—	 	(10.4	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive (loss)/income for the year	 	—	 	—	 	—	 	(51.6	)	(3.9	)	(55.5	)	1.2	 	(54.3	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Transactions with owners, recorded directly in equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from ordinary shares issued	 	0.0	 	148.6	 	—	 	—	 	—	 	148.6	 	—	 	148.6	 	
Transaction cost recognized directly in equity	 	—	 	(10.8	)	—	 	—	 	—	 	(10.8	)	—	 	(10.8	)	
Equity-settled share based payment transactions	 	—	 	—	 	—	 	—	 	2.3	 	2.3	 	—	 	2.3	 	
Exercise of share options	 	—	 	0.3	 	—	 	—	 	(0.3	)	—	 	—	 	—	 	
Dividend paid	 	—	 	—	 	—	 	—	 	(0.1	)	(0.1	)	—	 	(0.1	)	
Acquisition of Non-controlling interest	 	—	 	—	 	—	 	—	 	—	 	—	 	2.7	 	2.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total contributions by and distributions to owners	 	0.0	 	138.1	 	—	 	—	 	1.9	 	140.0	 	2.7	 	142.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2015	 	1.0	 	735.2	 	6.9	 	(50.8	)	(415.2	)	277.1	 	4.4	 	281.5	 	
 
The notes on pages F-11 to F-111 form an integral part of these financial statements.
 
F- 8 

Table of Contents
 
Consolidated Statement of Changes in Equity
for the three years ended August 31 (continued)

 	 	Share
capital	 	Share
premium	 	Other
reserves	 	Currency
translation
reserves	 	Shareholders’
deficit	 	Total
parent
equity	 	Non-controlling
interest	 	Total equity	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2015	 	1.0	 	735.2	 	6.9	 	(50.8	)	(415.2	)	277.1	 	4.4	 	281.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income for the year	 	—	 	—	 	—	 	—	 	47.1	 	47.1	 	2.1	 	49.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other comprehensive loss for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Currency translation differences	 	—	 	—	 	—	 	(40.9	)	—	 	(40.9	)	—	 	(40.9	)	
Actuarial losses on defined benefit pension schemes	 	—	 	—	 	—	 	—	 	(3.9	)	(3.9	)	—	 	(3.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income/(loss) for the year	 	—	 	—	 	—	 	(40.9	)	43.2	 	2.3	 	2.1	 	4.4	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Transactions with owners, recorded directly in equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Proceeds from ordinary shares issued	 	0.0	 	0.4	 	—	 	—	 	—	 	0.4	 	—	 	0.4	 	
Transaction cost recognized directly in equity	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
Equity-settled share based payment transactions	 	—	 	0.0	 	—	 	—	 	6.7	 	6.7	 	—	 	6.7	 	
Exercise of share options	 	—	 	0.4	 	—	 	—	 	(0.4	)	—	 	—	 	—	 	
Dividend paid	 	—	 	—	 	—	 	—	 	—	 	—	 	(1.1	)	(1.1	)	
Acquisition of Non-controlling interest	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total contributions by and distributions to owners	 	0.0	 	0.8	 	—	 	—	 	6.3	 	7.1	 	(1.1	)	6.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2016	 	1.0	 	736.0	 	6.9	 	(91.7	)	(365.7	)	286.5	 	5.4	 	291.9	 	
 
The notes on pages F-11 to F-111 form an integral part of these financial statements.
 
F- 9 

Table of Contents
 
Consolidated Cash Flow Statement 
for the three years ended August 31

 	 	 	 	2014	 	2015	 	2016	 	
 	 	Note	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Cash flows from operating activities	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the year before taxation	 	 	 	(66.6	)	20.2	 	61.6	 	
Adjustments for:	 	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	 	33.8	 	48.5	 	65.2	 	
Impairment	 	 	 	—	 	—	 	1.0	 	
Bad debts and other gains	 	 	 	(2.1	)	(12.4	)	(11.6	)	
Refinancing fees	 	 	 	10.0	 	—	 	—	 	
Payment of bond redemption expense and commitment fees	 	 	 	77.0	 	29.3	 	5.0	 	
Other non-cash item	 	 	 	0.9	 	(1.7	)	(6.7	)	
Difference between pension contribution paid and amounts recognized in the Consolidated Income Statement	 	 	 	—	 	(2.9	)	5.2	 	
Loss on sale of property, plant and equipment and intangible assets	 	 	 	0.1	 	0.3	 	0.4	 	
Net financial expense	 	9	 	53.5	 	46.3	 	63.6	 	
Equity settled share-based payment expenses	 	 	 	3.0	 	2.3	 	6.7	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	109.6	 	129.9	 	190.4	 	
Increase in trade and other receivables, inventories and deferred lease expense	 	 	 	(8.4	)	(27.1	)	(34.9	)	
Increase in trade and other payables, deferred revenue and deferred gain	 	 	 	31.7	 	64.2	 	66.0	 	
 	 	 	 	 	 	 	 	 	 	
Cash generated from operations	 	 	 	132.9	 	167.0	 	221.5	 	
 	 	 	 	 	 	 	 	 	 	
Payment of bond redemption expense and commitment fees	 	 	 	(77.0	)	(29.3	)	(5.0	)	
Interest paid	 	 	 	(73.4	)	(31.2	)	(62.5	)	
Tax paid	 	 	 	(25.2	)	(19.9	)	(28.9	)	
 	 	 	 	 	 	 	 	 	 	
Net cash generated from/(used in) operating activities	 	 	 	(42.7	)	86.6	 	125.1	 	
 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities	 	 	 	 	 	 	 	 	 	
Proceeds from sale of property, plant and equipment	 	 	 	0.1	 	0.5	 	167.3	 	
Purchase of intangible assets	 	 	 	(0.7	)	(1.7	)	(1.4	)	
Acquisition of subsidiary, net of cash acquired	 	2	 	(35.1	)	(647.1	)	(33.6	)	
Acquisition of property, plant and equipment	 	 	 	(53.6	)	(62.3	)	(94.3	)	
Interest received	 	 	 	2.0	 	1.6	 	2.2	 	
 	 	 	 	 	 	 	 	 	 	
Net cash generated from/(used in) investing activities	 	 	 	(87.3	)	(709.0	)	40.2	 	
 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities	 	 	 	 	 	 	 	 	 	
Proceeds from the issue of share capital	 	24	 	323.8	 	126.2	 	0.4	 	
Transaction cost on issue of shares	 	 	 	—	 	(7.3	)	(1.7	)	
Proceeds from new loan	 	 	 	577.0	 	471.1	 	81.0	 	
Proceeds from bond	 	 	 	—	 	217.7	 	—	 	
Repayment of borrowings	 	 	 	(697.2	)	(107.7	)	(90.1	)	
Distribution to parent	 	 	 	(15.0	)	—	 	—	 	
Share capital redemption	 	24	 	(63.5	)	—	 	—	 	
Dividend paid	 	 	 	(0.0	)	(0.1	)	(1.1	)	
 	 	 	 	 	 	 	 	 	 	
Net cash (used in)/generated from financing activities	 	 	 	125.1	 	699.9	 	(11.5	)	
 	 	 	 	 	 	 	 	 	 	
Net increase/(decrease) in cash and cash equivalents	 	 	 	(4.9	)	77.5	 	153.8	 	
Cash and cash equivalents at September 1	 	 	 	171.1	 	166.2	 	225.9	 	
Effect of exchange rate fluctuations on cash held	 	 	 	(0.0	)	(17.8	)	(7.8	)	
 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at August 31, (including overdrafts)	 	 	 	166.2	 	225.9	 	371.9	 	
Bank overdrafts	 	 	 	90.2	 	90.7	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at August 31, (excluding overdrafts)	 	17	 	256.4	 	316.6	 	371.9	 	
 
The notes on pages F-11 to F-111 form an integral part of these financial statements.
 
F- 10 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 
 
1                                          Accounting policies
 
General information
 
Nord Anglia Education, Inc. (“the Company”) was incorporated in the Cayman Islands on December 14, 2011 as an exempt company with limited liability under Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The address of its registered office is Offices of Maples Corporate Services, Ugland House, PO Box 309, Grand Cayman, KY1-1104, Cayman Islands.
 
The main activities of the Company is an investment holding and its subsidiaries (together “the Group”) are operating Premium Schools worldwide.
 
Basis of preparation
 
The consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The Group has elected to prepare its parent Company financial statements in accordance with IFRS (see Note 32). The consolidated financial statements and Company financial statements are presented in US dollar, generally rounded to the nearest million. They are prepared on the historical cost basis, except for certain financial instruments and pension assets that have been measured at fair value.
 
The consolidated financial statements for the three years ended August 31, 2016 represent the consolidated financial statements of the Group.
 
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in US dollar which is the Company’s functional and presentation currency.
 
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.
 
Prior year revisions
 
During the year ended August 31, 2016, the Group finalized the purchase price allocation accounting from prior year, made voluntary presentation changes and made corrections of prior period errors, by adjusting the prior period information. Management assessed the materiality of the prior period errors in accordance with Staff Accounting Bulletin (“SAB”) No. 99 — Materiality, as issued by the Securities and Exchange Commission (“SEC”). The Group determined that the errors were not material to prior annual financial statements and therefore amendments of previously filed reports were not required. The Group has corrected the errors for all prior periods presented by revising the consolidated financial statements appearing herein.
 
The revisions do not have a material impact on key items and metrics such as Cash and cash equivalents, Net assets, Revenue and Profit/(loss) before tax. The following tables set out the impact.
 
F- 11 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                          Accounting policies (continued)
 
Prior year revisions (continued)
 
Impact on items within Consolidated Income Statement and Consolidated Statement of Comprehensive Income/(Loss) for the year ended August 31, 2015

 	 	As reported
previously ($m)	 	Finalization of acquisition
accounting (1)	 	Voluntary change
in presentation (2)	 	Correction of
errors (3)	 	Other (4)	 	As revised ($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated Income Statement	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	 	577.0	 	—	 	—	 	b, c (3.9	)	—	 	573.1	 	
Cost of sales	 	(355.9	)	—	 	—	 	a, b, e 0.1	 	—	 	(355.8	)	
Gross profit	 	221.1	 	—	 	—	 	(3.8	)	—	 	217.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	(127.0	)	—	 	a (3.9	)	e  1.1	 	—	 	(129.8	)	
Other gains/(losses)	 	(3.0	)	—	 	a 13.6	 	a, e  1.8	 	—	 	12.4	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit/(loss)	 	57.7	 	—	 	9.7	 	(0.9	)	—	 	66.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Finance income	 	2.8	 	—	 	—	 	e  (0.4	)	—	 	2.4	 	
Finance expense	 	(39.7	)	—	 	a (9.7	)	b  0.7	 	—	 	(48.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	20.8	 	—	 	—	 	(0.6	)	—	 	20.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income tax expense	 	(12.2	)	—	 	—	 	a, b, c, e  (0.3	)	—	 	(12.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the year	 	8.6	 	—	 	—	 	(0.9	)	—	 	7.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings/(loss) per share	 	0.07	 	—	 	—	 	(0.00	)	—	 	0.07	 	
Diluted earnings/(loss) per share	 	0.07	 	—	 	—	 	(0.00	)	—	 	0.07	 	
 
F- 12 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                          Accounting policies (continued)
 
Prior year revisions (continued)
 
Impact on items within Consolidated Income Statement and Consolidated Statement of Comprehensive Income/(Loss) for the year ended August 31, 2015 (continued)

 	 	As reported
previously ($m)	 	Finalization of acquisition
accounting (1)	 	Voluntary change
in presentation (2)	 	Correction of
errors (3)	 	Other (4)	 	As revised ($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated Statement of Comprehensive Income/(Loss)	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign exchange translation losses	 	(52.6	)	—	 	—	 	b, e  1.0	 	—	 	(51.6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income/(loss) for the year	 	(54.4	)	—	 	—	 	0.1	 	—	 	(54.3	)	
 
F- 13 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                          Accounting policies (continued)
 
Prior year revisions (continued)
 
Impact on items within Consolidated Income Statement and Consolidated Statement of Comprehensive Income/(Loss) for the year ended August 31, 2014

 	 	As reported
previously ($m)	 	Finalization of
acquisition accounting (1)	 	Voluntary change
in presentation (2)	 	Correction of
errors (3)	 	Other (4)	 	As revised ($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated Income Statement	 	 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	(92.9	)	—	 	a (4.0	)	—	 	—	 	(96.9	)	
Other gains/(losses)	 	—	 	—	 	a 4.0	 	a (1.9	)	—	 	2.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit/(loss)	 	(11.2	)	—	 	—	 	(1.9	)	—	 	(13.1	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	(64.7	)	—	 	—	 	(1.9	)	—	 	(66.6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income tax expense	 	(25.7	)	—	 	—	 	a, b  2.1	 	—	 	(23.6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the year	 	(90.4	)	—	 	—	 	0.2	 	—	 	(90.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings/(loss) per share	 	(1.07	)	—	 	—	 	0.00	 	—	 	(1.07	)	
Diluted earnings/(loss) per share	 	(1.07	)	—	 	—	 	0.00	 	—	 	(1.07	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated Statement of Comprehensive Income/(Loss)	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Foreign exchange translation losses	 	(10.9	)	—	 	—	 	b  1.7	 	—	 	(9.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income/(loss) for the year	 	(106.4	)	—	 	—	 	1.9	 	—	 	(104.5	)	
 
F- 14 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                          Accounting policies (continued)
 
Prior year revisions (continued)
 
Impact on items within Consolidated Balance Sheet as at August 31, 2015

 	 	As reported
previously ($m)	 	Finalization of
acquisition
accounting (1)	 	Voluntary change
in presentation (2)	 	Correction of
errors (3)	 	Other (4)	 	As revised ($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	449.7	 	a  15.2	 	—	 	—	 	—	 	464.9	 	
Intangible assets	 	1,415.5	 	a (9.3	)	—	 	b (3.7	)	—	 	1,402.5	 	
Trade and other receivables	 	37.9	 	—	 	—	 	e (0.5	)	—	 	37.4	 	
Deferred lease expense	 	—	 	—	 	—	 	a  17.1	 	—	 	17.1	 	
Deferred tax assets	 	70.4	 	—	 	—	 	a  7.1	 	—	 	77.5	 	
Total Non-current assets	 	1,974.0	 	5.9	 	—	 	20.0	 	—	 	1,999.9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory	 	—	 	—	 	—	 	—	 	a  4.5	 	4.5	 	
Trade and other receivables	 	131.1	 	—	 	—	 	e 0.2	 	a  (4.5	)	126.8	 	
Deferred lease expense	 	—	 	—	 	—	 	a  0.9	 	—	 	0.9	 	
Cash and cash equivalents (excluding bank overdrafts)	 	317.0	 	—	 	—	 	e  (0.4	)	—	 	316.6	 	
Total Current assets	 	449.3	 	—	 	—	 	0.7	 	—	 	450.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Trade and other payables	 	(170.9	)	a (0.3	)	—	 	b, e  0.5	 	—	 	(170.7	)	
Finance lease liabilities	 	(3.7	)	—	 	b  2.9	 	—	 	—	 	(0.8	)	
Deferred revenue	 	(518.8	)	—	 	—	 	b, c  0.4	 	b  0.2	 	(518.2	)	
Deferred gain	 	—	 	—	 	—	 	—	 	b  (0.2	)	(0.2	)	
Current tax liabilities	 	(2.9	)	—	 	—	 	b, c, e  0.2	 	—	 	(2.7	)	
Total Current liabilities	 	(794.6	)	(0.3	)	2.9	 	1.1	 	—	 	(790.9	)	
 
F- 15 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                          Accounting policies (continued)
 
Prior year revisions (continued)
 
Impact on items within Consolidated Balance Sheet as at August 31, 2015 (continued)

 	 	As reported
previously ($m)	 	Finalization of
acquisition
accounting (1)	 	Voluntary change
in presentation (2)	 	Correction of
errors (3)	 	Other (4)	 	As revised ($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivative financial instruments	 	(3.0	)	—	 	—	 	a  (18.6	)	—	 	(21.6	)	
Finance lease liabilities	 	(44.6	)	a  (0.5	)	b  (2.9	)	—	 	—	 	(48.0	)	
Other payables	 	(45.7	)	a (0.4	)	—	 	b, d, e  (3.5	)	—	 	(49.6	)	
Deferred revenue	 	(27.4	)	—	 	—	 	b, d  8.0	 	b  12.4	 	(7.0	)	
Deferred gain	 	—	 	—	 	—	 	—	 	b  (12.4	)	(12.4	)	
Deferred tax liabilities	 	(114.1	)	a  (4.7	)	—	 	a, b  (5.5	)	—	 	(124.3	)	
Total Non-current liabilities	 	(1,349.4	)	(5.6	)	(2.9	)	(19.6	)	—	 	(1,377.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net assets	 	279.3	 	—	 	—	 	2.2	 	—	 	281.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Currency translation reserve	 	(53.7	)	—	 	—	 	b, e  2.9	 	—	 	(50.8	)	
Shareholder deficit	 	(414.0	)	—	 	—	 	a, b, c, e (1.2	)	—	 	(415.2	)	
Non-controlling interest	 	3.9	 	—	 	—	 	b 0.5	 	—	 	4.4	 	
Total Equity	 	279.3	 	—	 	—	 	2.2	 	—	 	281.5	 	
 
F- 16 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                          Accounting policies (continued)
 
Prior year revisions (continued)
 
Impact on items within Consolidated Balance Sheet as at September 1, 2014

 	 	As reported
previously ($m)	 	Finalization of
acquisition
accounting (1)	 	Voluntary change in
presentation (2)	 	Correction of
errors (3)	 	Other (4)	 	As revised ($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Intangible assets	 	801.5	 	—	 	—	 	b (5.2	)	—	 	796.3	 	
Deferred lease expense	 	—	 	—	 	—	 	a 8.7	 	—	 	8.7	 	
Deferred tax assets	 	20.9	 	—	 	—	 	a 4.2	 	—	 	25.1	 	
Total Non-current assets	 	972.2	 	—	 	—	 	7.7	 	—	 	979.9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory	 	—	 	—	 	—	 	—	 	a  2.4	 	2.4	 	
Trade and other receivables	 	94.8	 	—	 	—	 	—	 	a  (2.4	)	92.4	 	
Deferred lease expense	 	—	 	—	 	—	 	a 0.5	 	—	 	0.5	 	
Total Current assets	 	352.8	 	—	 	—	 	0.5	 	—	 	353.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deferred revenue	 	(324.0	)	—	 	—	 	b 1.4	 	—	 	(322.6	)	
Total Current liabilities	 	(503.3	)	—	 	—	 	1.4	 	—	 	(501.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivative financial instruments	 	—	 	—	 	—	 	a (11.1	)	—	 	(11.1	)	
Deferred revenue	 	(8.6	)	—	 	—	 	b 6.0	 	—	 	(2.6	)	
Deferred tax liabilities	 	(45.5	)	—	 	—	 	a, b  (2.1	)	—	 	(47.6	)	
Total Non-current liabilities	 	(631.0	)	—	 	—	 	(7.2	)	—	 	(638.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net assets	 	190.7	 	—	 	—	 	2.4	 	—	 	193.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Currency translation reserve	 	(1.1	)	—	 	—	 	b  1.9	 	—	 	0.8	 	
Shareholder deficit	 	(413.2	)	—	 	—	 	a, b 0.0	 	—	 	(413.2	)	
Non-controlling interest	 	—	 	—	 	—	 	b  0.5	 	—	 	0.5	 	
Total Equity	 	190.7	 	—	 	—	 	2.4	 	—	 	193.1	 	
 
F- 17 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Prior year revisions (continued)
 
1)              Finalization of acquisition accounting
 
a)                  Sterling International Schools C Corporation
 
A finalization of the provisional purchase allocation exercise for Sterling International Schools C Corporation, acquired on June 25, 2015, has been reflected in the financial statements as at and for the years ended August 31, 2015 and 2016, as permitted by IFRS 3 — Business combinations. Fair value of identifiable net assets acquired increased by $9.3 million, thus decreasing intangible assets with no impact on the Consolidated Income Statement. This does not reflect an error in prior period financial reporting and the updated purchase price allocation has been disclosed in Note 2.
 
2)              Voluntary change in presentation
 
a)                  Foreign exchange translation gains/(losses) presentation in the Consolidated Income Statement
 
The Group has changed its Consolidated Income Statement presentation of Foreign exchange translation gains/(losses) in the financial statements as at and for the year ended August 31, 2016 and has reclassified the prior period comparatives to align with the reclassified presentation. Prior to the year ended August 31, 2016, the Group reported Foreign exchange gains/(losses), including the revaluation of intercompany loans and on the revaluation of the CHF bond, in Selling, general and administrative expenses. IAS 1 — Presentation of financial statements and IAS 21 — The effects of changes in foreign exchange rates are not prescriptive regarding the presentation in the Consolidated Income Statement of Foreign exchange gains/(losses). Management deems it a better reflection of the substance of the transactions to report Foreign exchange gains/(losses) on the revaluation of the CHF bond within Finance expense and Foreign exchange gains/(losses) on other activities, including the revaluation of intercompany loans, within Other gains/(losses).
 
For the current year, the impact of this change in presentation is a reclassification of a gain of $4.7 million and a gain of $17.2 million to Finance expense and Other gains/(losses), respectively, from Selling, general and administrative expenses.
 
b)                  Finance lease liabilities presentation in the Consolidated Balance Sheet
 
The Group has changed its Consolidated Balance Sheet presentation of Finance lease liabilities between current and non-current in the financial statements as at and for the year ended August 31, 2016 and has reclassified the prior period comparatives to align with the reclassified presentation. Prior to the year ended August 31, 2016, the Group calculated the split between current and non-current liabilities on the basis of the maturity profile of cash payments. IAS 17 - Leases is not prescriptive regarding whether this split should be calculated on the basis of the maturity profile of future cash payments or on the forecast reduction in the total liability in the next twelve months. Management deems it more appropriate to determine the split on the basis of the maturity profile of the lease liability.
 
For the current year, the impact of this change in presentation is a reclassification of $3.6 million between current and non-current finance lease liabilities.
 
F- 18 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Prior year revisions (continued)
 
3)              Correction of errors
 
The following tables detail the impact of the corrections of errors.
 
Impact on items within Consolidated Income Statement and Consolidated Statement of Comprehensive Income/(Loss) for the year ended August 31, 2015

 	 	Correction of
embedded derivatives
($m) (a)	 	Correction of
acquisition accounting
($m) (b)	 	Timing of book fees
recognition ($m) (c)	 	Other ($m) (e)	 	Total adjustments
($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated Income Statement	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	 	—	 	(2.9	)	(1.0	)	—	 	(3.9	)	
Cost of sales	 	(0.1	)	0.5	 	—	 	(0.3	)	0.1	 	
Gross profit	 	(0.1	)	(2.4	)	(1.0	)	(0.3	)	(3.8	)	
 	 	 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	—	 	—	 	—	 	1.1	 	1.1	 	
Other gains/(losses)	 	1.4	 	—	 	—	 	0.4	 	1.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit/(loss)	 	1.3	 	(2.4	)	(1.0	)	1.2	 	(0.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	
Finance income	 	—	 	—	 	—	 	(0.4	)	(0.4	)	
Finance expense	 	—	 	0.7	 	—	 	—	 	0.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	1.3	 	(1.7	)	(1.0	)	0.8	 	(0.6	)	
 	 	 	 	 	 	 	 	 	 	 	 	
Income tax expense	 	(0.5	)	0.2	 	0.0	 	(0.0	)	(0.3	)	
 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the year	 	0.8	 	(1.5	)	(1.0	)	0.8	 	(0.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	
Consolidated Statement of Comprehensive Income/(Loss)	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Foreign exchange translation losses	 	—	 	1.2	 	—	 	(0.2	)	1.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Total comprehensive income/(loss) for the year	 	0.8	 	(0.3	)	(1.0	)	0.6	 	0.1	 	
 
F- 19 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Prior year revisions (continued)
 
3)              Correction of errors (continued)
 
Impact on items within Consolidated Income Statement and Consolidated Statement of Comprehensive Income/(Loss) for the year ended August 31, 2014

 	 	Correction of embedded derivatives
($m) (a)	 	Correction of acquisition accounting
($m) (b)	 	Total adjustments ($m)	 	
 	 	 	 	 	 	 	 	
Consolidated Income Statement	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Selling, general and administrative expenses	 	—	 	—	 	—	 	
Other gains/(losses)	 	(1.9	)	—	 	(1.9	)	
 	 	 	 	 	 	 	 	
Operating profit/(loss)	 	(1.9	)	—	 	(1.9	)	
 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	(1.9	)	—	 	(1.9	)	
 	 	 	 	 	 	 	 	
Income tax expense	 	0.7	 	1.4	 	2.1	 	
 	 	 	 	 	 	 	 	
Profit/(loss) for the year	 	(1.2	)	1.4	 	0.2	 	
 	 	 	 	 	 	 	 	
Consolidated Statement of Comprehensive Income/(Loss)	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Foreign exchange translation losses	 	—	 	1.7	 	1.7	 	
 	 	 	 	 	 	 	 	
Total comprehensive income/(loss) for the year	 	(1.2	)	3.1	 	1.9	 	
 
F- 20 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Prior year revisions (continued)
 
3)              Correction of errors (continued)
 
Impact on items within Consolidated Balance Sheet as at August 31, 2015

 	 	Correction of
embedded
derivatives ($m)
(a)	 	Correction of
acquisition
accounting ($m)
(b)	 	Timing of book
fees recognition
($m) (c)	 	Correction 
of classification
of accrued
expenses ($m) (d)	 	Other ($m) (e)	 	Total
adjustments ($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	—	 	—	 	—	 	—	 	—	 	—	 	
Intangible assets	 	—	 	(3.7	)	—	 	—	 	—	 	(3.7	)	
Trade and other receivables	 	—	 	—	 	—	 	—	 	(0.5	)	(0.5	)	
Deferred lease expense	 	17.1	 	—	 	—	 	—	 	—	 	17.1	 	
Deferred tax assets	 	7.1	 	—	 	—	 	—	 	—	 	7.1	 	
Total Non-current assets	 	24.2	 	(3.7	)	—	 	—	 	(0.5	)	20.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Inventory	 	—	 	—	 	—	 	—	 	—	 	—	 	
Trade and other receivables	 	—	 	—	 	—	 	—	 	0.2	 	0.2	 	
Deferred lease expense	 	0.9	 	—	 	—	 	—	 	—	 	0.9	 	
Cash and cash equivalents (excluding bank overdrafts)	 	—	 	—	 	—	 	—	 	(0.4	)	(0.4	)	
Total Current assets	 	0.9	 	—	 	—	 	—	 	(0.2	)	0.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Trade and other payables	 	—	 	(0.7	)	—	 	—	 	1.2	 	0.5	 	
Finance lease liabilities	 	—	 	—	 	—	 	—	 	—	 	—	 	
Deferred revenue	 	—	 	1.4	 	(1.0	)	—	 	—	 	0.4	 	
Deferred gain	 	—	 	—	 	—	 	—	 	—	 	—	 	
Current tax liabilities	 	—	 	0.2	 	0.0	 	—	 	(0.0	)	0.2	 	
Total Current liabilities	 	—	 	0.9	 	(1.0	)	—	 	1.2	 	1.1	 	
 
F- 21 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Prior year revisions (continued)
 
3)              Correction of errors (continued)
 
Impact on items within Consolidated Balance Sheet as at August 31, 2015 (continued)

 	 	Correction of
embedded
derivatives ($m)
(a)	 	Correction of
acquisition
accounting ($m)
(b)	 	Timing of book
fees recognition
($m) (c)	 	Correction 
of classification
of accrued
expenses ($m) (d)	 	Other ($m) (e)	 	Total
adjustments ($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivative financial instruments	 	(18.6	)	—	 	—	 	—	 	—	 	(18.6	)	
Finance lease liabilities	 	—	 	—	 	—	 	—	 	—	 	—	 	
Other payables	 	—	 	(0.1	)	—	 	(3.2	)	(0.2	)	(3.5	)	
Deferred revenue	 	—	 	4.8	 	—	 	3.2	 	—	 	8.0	 	
Deferred gain	 	—	 	—	 	—	 	—	 	—	 	—	 	
Deferred tax liabilities	 	(6.9	)	1.4	 	—	 	—	 	—	 	(5.5	)	
Total Non-current liabilities	 	(25.5	)	6.1	 	—	 	—	 	(0.2	)	(19.6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net assets	 	(0.4	)	3.3	 	(1.0	)	—	 	0.3	 	2.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Currency translation reserve	 	—	 	3.1	 	—	 	—	 	(0.2	)	2.9	 	
Shareholder deficit	 	(0.4	)	(0.3	)	(1.0	)	—	 	0.5	 	(1.2	)	
Non-controlling interest	 	—	 	0.5	 	—	 	—	 	—	 	0.5	 	
Total Equity	 	(0.4	)	3.3	 	(1.0	)	—	 	0.3	 	2.2	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Prior year revisions (continued)
 
3)              Correction of errors (continued)
 
Impact on items within Consolidated Balance Sheet as at September 1, 2014

 	 	Correction of embedded derivatives (a)	 	Correction of acquisition accounting (b)	 	Total adjustments ($m)	 	
 	 	 	 	 	 	 	 	
Intangible assets	 	—	 	(5.2	)	(5.2	)	
Deferred lease expense	 	8.7	 	—	 	8.7	 	
Deferred tax assets	 	4.2	 	—	 	4.2	 	
Total Non-current assets	 	12.9	 	(5.2	)	7.7	 	
 	 	 	 	 	 	 	 	
Inventory	 	—	 	—	 	—	 	
Trade and other receivables	 	—	 	—	 	—	 	
Deferred lease expense	 	0.5	 	—	 	0.5	 	
Total Current assets	 	0.5	 	—	 	0.5	 	
 	 	 	 	 	 	 	 	
Deferred revenue	 	—	 	1.4	 	1.4	 	
Total Current liabilities	 	—	 	1.4	 	1.4	 	
 	 	 	 	 	 	 	 	
Derivative financial instruments	 	(11.1	)	—	 	(11.1	)	
Deferred revenue	 	—	 	6.0	 	6.0	 	
Deferred tax liabilities	 	(3.5	)	1.4	 	(2.1	)	
Total Non-current liabilities	 	(14.6	)	7.4	 	(7.2	)	
 	 	 	 	 	 	 	 	
Net assets	 	(1.2	)	3.6	 	2.4	 	
 	 	 	 	 	 	 	 	
Currency translation reserve	 	—	 	1.9	 	1.9	 	
Shareholder deficit	 	(1.2	)	1.2	 	0.0	 	
Non-controlling interest	 	—	 	0.5	 	0.5	 	
Total Equity	 	(1.2	)	3.6	 	2.4	 	
 
F- 23 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Prior year revisions (continued)
 
3)              Correction of errors (continued)
 
a)                  Correction of embedded derivatives
 
Embedded derivatives have been identified within the Chicago South Loop and Houston land and buildings leases. The embedded derivatives involve the linkage of operating lease contracts to a multiplier of Consumer Price Index (“CPI”) that is greater than one. As a result the derivatives are required to be separated from the host contract, valued separately and reported on the Consolidated Balance Sheet at inception within Deferred lease expense and Derivative financial instruments. The Deferred lease expense is amortized to Cost of sales over the lease term. The Derivative financial instruments are revalued each reporting period with the change in valuation from the previous period reported in the Consolidated Income Statement within Other gains/(losses).
 
b)                  Correction of acquisition accounting
 
Management has corrected an acquisition accounting error in relation to Dover Court International School (Pte.) Limited, acquired on April 22, 2014, in Singapore. Included within the net assets acquired was Deferred revenue, representing Cash and cash equivalents collected, relating to a pre-acquisition building fund levied for future capital expenditure. On acquisition this was accounted for as Deferred revenue that would be released subsequently to the Consolidated Income Statement. It has been identified that there was no performance obligation to provide a future service to recognize the deferred revenue and therefore this has been determined to be an error. This has been corrected retrospectively, as this represents a pre-acquisition reserve.
 
As at September 1, 2014, the impact of this correction is a decrease in Intangible assets of $7.4 million with a corresponding decrease in Deferred revenue. For the year ended August 31, 2015, the impact of this correction is a net loss of $1.0 million and a foreign exchange gain of $0.6 million, with a decrease in Intangible assets of $6.8 million, a decrease of Deferred revenue of $6.2 million, and a decrease in Current tax liabilities of $0.2 million.
 
Separate from the correction above, for 2014, a foreign exchange adjustment of $1.7 million in relation to the acquisition of Dover Court International School (Pte.) Limited has been made.
 
At the time of the acquisition of British International Schools Group, Vietnam, completed on January 1, 2015, a consultancy fee received from the vendor was reported as Revenue. However, it has been determined that the acquisition agreement and consultation arrangement were linked transactions and as such this should have been treated as a reduction in consideration paid rather than Revenue. Therefore, this has now been corrected retrospectively. The overall impact in the financial statements for the year ended August 31, 2015 is a loss of $1.7 million, with a corresponding decrease in Intangible assets.
 
Also in relation to the Vietnam acquisition, a correction of discount rate used in the valuation of the deferred consideration of the purchase has been made. The impact of this adjustment in the financial statements for the year ended August 31, 2015 is a reduction of Finance expense of $0.7 million, with an increase in Intangible assets of $1.3 million and an increase in payables of $0.6 million.
 
For the year ended August 31, 2014, Management has corrected an acquisition accounting error in relation to Deferred tax liabilities that were miscalculated in the consolidated financial statements. This resulted in a decrease of $1.4 million in Income tax expense and Deferred tax liabilities.
 
In addition, following a review of the Group’s cost of investments register, Management has corrected other smaller acquisition accounting errors.
 
c)                   Timing of book fees recognition
 
A school in Doha began to charge a “book fee” during the year ended August 31, 2015, which should be reported as Revenue in the school year to which the fees relate (i.e. one school year later), as opposed to in the year in which the fees were received. A correction has been made to reflect the correct timing of revenue recognition, whereby $1.0 million of revenue recognized in 2015 should have been deferred into 2016, to align with the period when the student receives the book fee service.
 
d)                   Correction of classification of accrued expenses
 
In the financial statements as at and for the year ended August 31, 2015, the Group changed its Consolidated Balance Sheet presentation to disclose Accruals separately from Deferred revenue. However, some of the accruals were classified incorrectly within Deferred revenue in the Consolidated Balance Sheet as at August 31, 2015. A correction has been made, which involves a Consolidated Balance Sheet correction from Deferred revenue to Other payables only.
 
F- 24 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Prior year revisions (continued)
 
3)    Correction of errors (continued)
 
e)      Other
 
All known errors from the prior year have been corrected in the current year financial statements. Those that impact profit or loss, goodwill, foreign currency translation reserve, tax balances, or have an impact of more than $0.5 million on any individual line item have been corrected retrospectively to the comparatives.
 
4)              Other
 
The Group has made adjustments for two other items which affect the Consolidated Balance Sheet only.
 
a)                                     Inventories presentation in the Consolidated Balance Sheet
 
Management has deemed inventories to be significant enough to be disclosed separately from Trade and other receivables. For the current year, the impact of this is an adjustment of $4.3 million from Trade and other receivables to Inventories.
 
b)                                     Deferred gain presentation in the Consolidated Balance Sheet
 
Management has deemed a Deferred gain from a sale and leaseback transaction to be significant enough to be disclosed separately from Deferred revenue. For the current year, the impact of this is an adjustment of $12.3 million from Deferred revenue to Deferred gain.
 
F- 25 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Basis of consolidation
 
The consolidated financial statements consist of the financial statements of the Group and the Group’s share of its interests in joint ventures and associates . In situations where the Group has a less than 100% interest, the Group considers further factors such as voting rights and exposure to variable returns and the linkage between power and returns in order to determine whether or not it controls the subsidiary. Details of the Group’s assessment with regard to new acquisitions in the year are disclosed in Note 2.
 
Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Income Statement, Consolidated Statement of Comprehensive Income/(Loss), Consolidated Balance Sheet and Consolidated Statement of Changes in Equity.
 
Subsidiaries
 
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are consolidated fully from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Group.
 
Intercompany transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
 
Joint arrangements
 
Under IFRS 11 - Joint arrangements , investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. The Group has a joint venture which is accounted for using the equity method after being recognized initially at cost in the Consolidated Balance Sheet.
 
Under the equity method of accounting, the investments are recognized initially at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition profits or losses of the investee in profit or loss and the Group’s share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognized as a reduction in the carrying amount of the investment.
 
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the other entity. Unrealized gains on transactions between the Group and its joint venture are eliminated to the extent of the Group’s interest in the entity.
 
Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group.
 
The Group determines at each reporting date whether there is any objective evidence that the investment in the joint venture is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value and recognizes the amount adjacent to share of profit/(loss) of joint venture in the Consolidated Income Statement.
 
F- 26 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Basis of consolidation (continued)
 
Associates
 
Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20.0% and 50.0% of the voting rights. Under the equity method of accounting, the investments are recognized initially at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition profits or losses of the investee in profit or loss and the Group’s share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognized as a reduction in the carrying amount of the investment.
 
The Group’s investment in associates includes goodwill identified on acquisition.
 
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognized in other comprehensive income is reclassified to profit or loss where appropriate.
 
The Group’s share of post-acquisition profit or loss is recognized in the Consolidated Income Statement, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
 
The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount adjacent to share of profit/(loss) of associates in the Consolidated Income Statement.
 
Profits and losses resulting from upstream and downstream transactions between the Group and its associate are recognized in the Group’s financial statements only to the extent of unrelated investor’s interests in the associates. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in associates are recognized in the Consolidated Income Statement.
 
Revenue recognition
 
Revenue comprises the fair value of consideration received or receivable in the ordinary course of the Group’s activities.
 
Sales of services which have been invoiced but not yet recognized as revenue are included on the Consolidated Balance Sheet as Deferred revenue.
 
School fee income
 
School fee income comprises tuition fees and income from ancillary sources including examinations, school trips, bus transportation and lunch fees.
 
School fee income is recognized over the school terms, Term one being late August / early September to December, Term two January to March and Term three April to June. School fees are payable in advance on or before the first day of each term and are recognized across the months of each term. Where fees are received in advance for more than one term, the income is recognized over the months in the terms for which payment has been made.
 
At a majority of the Group’s schools, our terms and conditions require a full term’s notice of withdrawal for a refund of prepaid tuition.
 
F- 27 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Revenue recognition (continued)
 
Deposits
 
Refundable deposits relate to fees that may result in a return of funds / monies to a customer. These are reported as a financial liability until they are either returned to the customer or the term / condition under which it will be refunded has expired or is no longer valid. At this point, the fee is either earned and the Revenue is recognized, or the fees have been refunded and the liability is relieved.
 
Non-refundable deposits relate to fees that have no terms or conditions attached which would result in any monies ever being returned to the customer. The Revenue is earned and recognized to the extent that the services have been fulfilled, with any excess deferred and recognized as Revenue over the Group’s average student tenure.
 
Expenses
 
Cost of sales
 
Cost of sales consist principally of salary and benefits for school principals and teaching staff and lecturers employed in our Premium Schools and Learning Services businesses, plus the costs of teaching materials as well as expenses for the provision of school lunches, bus services and athletics programmes. Premium School land and building operating leases and depreciation charges arising from tangible assets owned by Premium Schools is also included in the cost of sales. For the Learning Services businesses the costs are recognized as incurred. For the Premium Schools business salary and benefits for school principals and teaching staff are recognized as incurred, being the 10 months over which teaching services are provided and as such they follow the same recognition period as the relevant fee income.
 
Selling, general and administrative expenses
 
Selling, general and administrative expenses consist of several cost categories including salary and benefits for senior management team and other personnel engaged in finance, human resources, education policy and quality, legal compliance, information systems and infrastructure and other functions at our corporate headquarters. In addition, this category of expense encompasses salary and benefits for regional personnel supporting our operations in China, Europe, Middle East, Southeast Asia, North America and Others. Finally, this category also includes business travel costs, advertising and promotion expenses, conference costs, general liability insurance premiums, communication costs, bad debt expense, training costs and others.
 
Foreign exchange
 
The Company has a US dollar functional currency and the Group adopts a US dollar presentational currency. The Group has significant and expanding international operations trading in non-US dollar currencies and the functional currency of each subsidiary is dependent on that subsidiary’s operating environment. Movements in global exchange rates can cause currency exposures to the Group’s consolidated US dollar financial results. Trade is conducted in local currencies and, where appropriate, borrowings are matched in that currency to mitigate the risk of exposure of the Group’s assets and liabilities to exchange rate movements.
 
Transactions in foreign currencies are translated at the exchange rate on the date of the transaction. At each reporting date, monetary assets and liabilities denominated in foreign currencies are re-translated at the rates prevailing on the reporting date. All differences are taken to the Consolidated Income Statement. The Group includes foreign currency exchange gains and losses relating to external debts within Finance expense, while those relating to intercompany and other operational activities are included within Other gains/(losses).
 
The assets and liabilities of overseas subsidiaries denominated in foreign currencies are translated into US dollar at exchange rates prevailing at the date of the Consolidated Balance Sheet; profits and losses are translated at average exchange rates for the relevant accounting periods. Exchange differences arising are recognized in the Consolidated Statement of Comprehensive Income/(Loss) and are included in the Group’s Currency translation reserve. Such translation differences are recognized as income or expenses in the period in which the operation is disposed of.
 
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
 
F- 28 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Post-employment and similar obligations
 
The Group operates various post-employment schemes, including both defined benefit and defined contribution pension plans and post-employment medical plans.
 
Pension obligations
 
The liability or asset recognized in the Consolidated Balance Sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
 
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms approximating to the terms of the related obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used.
 
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit or loss.
 
Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the Consolidated Balance Sheet and Consolidated Statement of Changes in Equity.
 
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service costs.
 
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
 
Other post-employment obligations
 
Some Group companies provide post-retirement healthcare benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit pension plans. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. These obligations are valued annually by independent qualified actuaries.
 
Share-based payments
 
The Group operates a share based compensation plan under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognized as an expense over the vesting period. The total amount to be expensed is determined by reference to the fair value of the options granted and estimation of the number of options that expect to vest.
 
Fair value is calculated using the Black Scholes Option Pricing Model, the details of which are disclosed in Note 22.
 
Exceptional items
 
Exceptional items are those significant items which are separately disclosed by virtue of their size or incidence to enable a full understanding of the Group’s financial performance. Transactions which may give rise to exceptional items are principally early termination of debt instruments, restructurings, costs related to the acquisition of subsidiaries and other significant transactions not expected to occur as part of normal operating activities.
 
F- 29 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Borrowings
 
Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are measured subsequently at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.
 
Preference shares, which are redeemable mandatorily on a specific date, are classified as liabilities. The dividends on these preference shares are recognized in profit or loss as finance costs.
 
The fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortized cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognized and included in shareholders’ equity, net of income tax effects.
 
Borrowings are removed from the Consolidated Balance Sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss as other income or finance costs.
 
Where the terms of a financial liability are re-negotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognized in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
 
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
 
Borrowing costs
 
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
 
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
 
F- 30 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Taxation
 
The tax expense included in the Consolidated Income Statement consists of current and deferred tax.
 
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted by the reporting date. Tax expense is recognized in the Consolidated Income Statement except to the extent that it relates to items recognized in the Consolidated Statement of Comprehensive Income/(Loss) or directly in the Consolidated Statement of Changes in Equity, in which case it is recognized in the Consolidated Statement of Comprehensive Income/(Loss) or directly in the Consolidated Statement of Changes in Equity, respectively.
 
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Provisions are made for deferred tax that would arise on remittance of the retained earnings of overseas subsidiaries when it is expected that this will be repatriated to the shareholder. Provisions are not made for wholly-owned subsidiaries when the intention is to retain retained earnings in the underlying entity for future investment.
 
Deferred tax is calculated at the tax rates that have been enacted or substantively enacted by the reporting date. Deferred tax is charged or credited in the Consolidated Income Statement, except when it relates to items charged or credited directly to equity or other comprehensive income, in which case the deferred tax is also recognized in equity, or other comprehensive income, respectively.
 
Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
 
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.
 
Deferred tax assets and liabilities are offset against each other when there is a legally enforceable right to set-off current taxation assets against current taxation liabilities and it is the intention to settle these on a net basis.
 
Dividends
 
Dividends are recorded in the financial statements in the period in which they are approved by the Group’s shareholders.
 
F- 31 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Business combinations and g oodwill
 
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises of:
 
·                   fair values of the assets transferred;
·                   liabilities incurred to the former owners of the acquired business;
·                   equity interests issued by the Group;
·                   fair value of any asset or liability resulting from a contingent consideration arrangement; and
·                   fair value of any pre-existing equity interest in the subsidiary.
 
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. The Group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis. Non-controlling interests in the acquired entity that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation are measured either at fair value or the present ownership interests’ proportionate share in the recognized amounts of the acquired entity’s net identifiable assets. All other components of non-controlling interests are measured at their acquisition date fair value, unless another measurement basis is required by IFRS.
 
Acquisition-related costs are expensed as incurred.
 
The excess of the
 
·                   consideration transferred,
·                   amount of any non-controlling interest in the acquired entity, and
·                   acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired, the difference is recognized directly in profit or loss as a bargain purchase.
 
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of acquisition. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
 
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are re-measured subsequently to fair value with changes in fair value recognized in profit or loss.
 
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date. Any gains or losses arising from such re-measurement are recognized in profit or loss.
 
Goodwill is measured initially at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair values of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the re-assessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss.
 
At the acquisition date of a subsidiary, goodwill acquired is recognized as an asset and is allocated to each of the cash-generating units (“CGUs”) expected to benefit from the business combination’s synergies. Goodwill by CGU is allocated into the premium school level and is monitored and tested for impairment at this level by management. Goodwill arising on the acquisition of joint ventures and associates is included within the carrying value of the investment.
 
On disposal of a subsidiary, joint venture or associate, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Acquired i ntangible assets
 
Separately acquired intangible assets such as brands/trademarks, customer relationships, contracts and software are measured initially at cost. Intangible assets acquired in a business combination are recognized at fair value at the acquisition date. Intangibles with finite useful lives are carried at cost and are amortized on a straight line basis over their estimated useful lives as follows:

Customer relationships	 	6 to 15 years straight line	
Brands	 	50 years or indefinite life	
Contracts	 	Length of contract on a straight line basis	
Curriculum products & Intellectual property	 	3 years straight line	
Computer software	 	3 years straight line	
 
Brand name
 
Legally protected or otherwise separable brand names acquired as part of a business combination are capitalized at fair value on acquisition. For some of the brand names in Western Europe, Management’s expectation is to retain brand names within the business for an in definite life due to the nature and premium associated with the brand names that the Group has acquired and as such they are not amortized and are therefore subject to an annual impairment review (see Note 13). Brand names with finite useful lives are carried at cost and are amortized on a straight-line basis over their estimated useful lives of 50 years.
 
Assets held for sale
 
Non-current assets and associated liabilities are classified as held for sale when their carrying amount will be recovered principally through a sale transaction rather than continuing use and a sale is highly probably. Assets designated as held for sale are held at the lower of carrying amount at designation and fair value less costs to sell.
 
Depreciation is not charged against Property, plant and equipment classified as held for sale.
 
Property, plant and equipment
 
Property, plant and equipment are stated at historic cost less accumulated depreciation and any provision for impairment in value. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is provided at rates calculated to write-off the cost, less the estimated residual value, of property, plant and equipment over their estimated useful lives. Estimated useful lives and depreciation rates are as follows:

Freehold and long leasehold buildings	 	25 to 50 years straight line	
Short leasehold land and buildings	 	The unexpired term of the lease on a straight line basis	
Computer equipment	 	3 to 6 years straight line	
Motor vehicles	 	4 to 5 years straight line	
Fixtures and fittings	 	3 to 7 years straight line	
 
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, when shorter, over the term of the relevant lease.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Impairment of non-financial assets
 
Goodwill is allocated initially to a CGU and tested for impairment at this level. Goodwill is reviewed for impairment at least annually by assessing the recoverable amount of each CGU to which the goodwill relates. The recoverable amount is the higher of fair value less costs to sell and value in use. When the recoverable amount is less than the carrying amount, an impairment loss is recognized. Any impairment is recognized immediately in the Consolidated Income Statement and is not reversed subsequently.
 
For all other non-financial assets (including other Intangible assets and Property, plant and equipment), the Group performs impairment testing where there are indicators of impairment. If such an indicator exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the CGU to which the asset belongs.
 
The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized immediately in the Consolidated Income Statement.
 
Where an impairment loss reverses subsequently, the carrying amount of the asset (or CGU) is increased to the revised estimate of the recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately as a credit to the Consolidated Income Statement.
 
Leases
 
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received form the lessor) are charged to the Consolidated Income Statement on a straight-line basis over the period of the lease.
 
The Group leases certain Property, plant and equipment. Leases of Property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.
 
Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in Finance lease liabilities (current and non-current). The interest element of the finance cost is charged to the Consolidated Income Statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The Property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease term.
 
Sale and leaseback transactions
 
When a sale and leaseback results in a finance lease, any gain on the sale is deferred and recognized as income over the lease term. Any loss on the sale is immediately recognized as an impairment loss when the sale occurs.
 
If the leaseback is classified as an operating lease, then any gain is recognized immediately if the sale and leaseback terms are demonstrably at fair value. Otherwise, the sale and leaseback are accounted for as follows:
 
·                   If the sale price is below fair value then the gain or loss is recognized immediately other than to the extent that a loss is compensated for by future rentals at a below-market price, then the loss is deferred and amortized over the period that the asset is expected to be used.
 
·                   If the sale price is above fair value, then any gain is deferred and disclosed as Deferred gain in the Consolidated Balance Sheet, and amortized over the useful life of the asset.
 
·                   If the fair value of the asset is less than the carrying amount of the asset at the date of the transaction, then that difference is recognized immediately as a loss on the sale.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Inventories
 
Inventories consist of goods for resale, which are carried at the lower of cost and net realisable value, after making allowance for obsolete and slow moving items. Inventory cost is calculated using actual cost.
 
Trade r eceivables
 
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. A provision for impairment of receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivable. Significant financial difficulties of the entity that owes the receivable, probability that the entity that owes the receivable will enter bankruptcy or financial reorganization and default or delinquency in payments (which is 60-75 days overdue depending on the nature of the invoice) are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognized in the Consolidated Income Statement. When a receivable is uncollectible, it is written-off against the allowance account for receivables.
 
Cash and cash equivalents
 
Cash and cash equivalents includes cash in hand, term and call deposits held with banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are classified as current liabilities.
 
Trade payables
 
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
 
Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.
 
Financial instruments
 
The Group has three types of derivative financial instruments, including the Vietnam option, embedded derivatives and the cross currency swaps.
 
Derivative financial instruments are recognized at fair value, generally being the cost at the date a contract is entered into and are re-measured subsequently at their fair value. The Group adopted the Put-Call Parity to perform the valuation on the fair value of the Vietnam option. Embedded derivatives are separated from their non-derivative host contracts and accounted for as derivatives. Changes in fair value are recognized in other gains/losses.
 
Depending on the type of derivative financial instrument, fair value calculation techniques include, but are not limited to, quoted market value and present value of estimated future cash flows (of which the valuation of interest rate instruments is an example).
 
Derivative assets and liabilities are classified as non-current unless they mature within one year from the reporting date.
 
(i) Classification
 
The Group classifies its financial assets in the following categories:
 
Financial assets at fair value through profit or loss, and loans and receivables. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at the end of each reporting period.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1           Accounting policies (continued)
 
Financial instruments (continued)
 
(a) Financial assets at fair value through profit or loss
 
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.
 
(b) Loans and receivables
 
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise Trade and other receivables and Cash and cash equivalents in the Consolidated Balance Sheet.
 
(ii) Reclassification
 
The Group may choose to reclassify a non-derivative trading financial asset out of the held for trading category if the financial asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans and receivables are permitted to be reclassified out of the held for trading category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term. In addition, the Group may choose to reclassify financial assets that would meet the definition of loans and receivables out of the held for trading or available-for-sale categories if the Group has the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification.
 
Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortized cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently made. Effective interest rates for financial assets reclassified to loans and receivables and held-to-maturity categories are determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates prospectively.
 
(iii) Recognition and de-recognition
 
Regular way purchases and sales of financial assets are recognized on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognized in other comprehensive income are reclassified to profit or loss as gains and losses from investment securities.
 
Offsetting of financial instruments
 
Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated Balance Sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                Accounting policies (continued)
 
Provisions
 
Provisions are recognized when:
 
·                   the Group has a present legal or constructive obligation as a result of past events;
·                   it is more likely than not that an outflow of resources will be required to settle the obligation; and
·                   the amount can be estimated reliably.
 
Provisions for onerous leases are recognized when the Group believes that the unavoidable costs of meeting the lease obligations exceed the economic benefits expected to be received under the lease. Provisions for dilapidation costs are recognized on a lease-by-lease basis.
 
Provisions are not recognized for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
 
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as an interest expense.
 
Where the Group expects amounts to be received in relation to a provision, the reimbursement is recognized as a separate asset when its receipt is considered virtually certain.
 
Loss contingencies
 
The Group is subject to various claims and contingencies which are in the scope of ordinary and routine litigation incidental to the business, including those related to regulation, litigation, business transactions and employee-related matters and taxes. When a claim or potential claim is identified, the likelihood of any loss or exposure is assessed. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, a liability for the loss is recorded in the Consolidated Income Statement. The liability recorded includes probable and estimable legal costs incurred to date and future legal costs. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the claim is disclosed if the likelihood of a potential loss is reasonably possible and the amount of the potential loss could be material. For matters where no loss contingency is recorded, legal fees are expensed as incurred.
 
Share capital
 
Share capital issued by the Group is recorded at the proceeds received, net of direct issue costs.
 
Ordinary shares are classified as equity.
 
Equity instruments
 
Financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:
 
·                   they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company (or Group); and
 
·                   where the instrument will or may be settled in the company’s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the company’s own equity instruments or is a derivative that will be settled by the company’s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
 
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the Company’s own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                Accounting policies (continued)
 
Going concern
 
The Consolidated Balance Sheet as at August 31, 2016 shows that assets exceed liabilities by $291.9 million (2015 - $281.5 million, 2014 - $193.1 million).
 
The Directors have reviewed the latest guidance relating to going concern and, having made all relevant enquiries, have formed a judgement at the date of the approval of the financial statements that the Group has adequate resources at its disposal to continue its operations for the foreseeable future. This judgement is based on a review undertaken of the current business forecast to twelve months after the signing of the financial statements and the projected cash requirements over that period to assess the likelihood of the Group being able to continue as a going concern. Suitable sensitivities were run for the periods up to twelve months after the signing of the financial statements to assess the headroom available.
 
As at August 31, 2016, the Group had available but undrawn borrowing facilities of $ 117.4 million and based on the projected operating cash flows the Directors’ do not believe that there will be a requirement to increase this facility in the foreseeable future. The Group continues to generate strong operating cash flows and benefits from favourable working capital movements through the receipt of tuition fees in advance of the school year. Although the current liabilities exceed current assets by $179.1 million (2015 - $340.9 million, 2014 - $148.6 million), the main reason for this is the receipt of tuition fees in advance of the school year generating current Deferred revenue of $550.0 million which is not considered to be a cash cost in the coming year. In addition, the acquisitions of subsidiaries are timed such as to optimise the cash impact by taking into account the working capital cycle of the acquiree.
 
This review concluded that there were no material uncertainties that potentially could give rise to a significant doubt about the business continuing as a going concern.
 
Earnings per share
 
(i) Basic earnings per share
 
Basic earnings per share is calculated by dividing:
 
·                   the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares
·                   by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year and excluding treasury shares
 
(ii) Diluted earnings per share
 
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
 
·                   the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
·                   the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                Accounting policies (continued)
 
Critical accounting estimates and judgements
 
The preparation of the consolidated Group financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an on-going basis.
 
Critical estimates and assumptions that are applied in the preparation of the consolidated financial statements include:
 
Goodwill allocation and impairment testing
 
Goodwill arising on consolidation represents the excess of the cost of acquisitions over the Group’s interest in the fair value of the identifiable assets and liabilities at the date of acquisition. Fair values are attributed to the identifiable assets, liabilities and contingent liabilities that existed at the date of acquisition, reflecting their condition at that date.
 
Goodwill acquired in a business combination is allocated, at the date of acquisition, to the CGU that benefitted from that business combination. The Directors consider that a CGU is generally an individual school or contract. For the purposes of testing for impairment to goodwill annually, each CGU is tested individually. For the purpose of disclosure, CGUs are aggregated together to groupings with similar risk characteristics.
 
Goodwill is recognized as an asset. It is not subject to annual amortization, but is assessed for impairment at least annually or more frequently if there are indications that goodwill might be impaired. The recoverable amounts of the goodwill are calculated on a discounted cash flow basis by applying appropriate long-term growth rates and discount rates, based on historic trends adjusted for management’s estimates of future prospects, to the CGUs on an individual basis. Both the calculated recoverable value of goodwill and any impairment adjustment could vary significantly if different long-term growth rates and FTE numbers were applied.
 
Additional information is disclosed in Note 13.
 
Intangible assets
 
Intangible assets acquired as part of an acquisition of a business are capitalized separately from goodwill if those assets are identifiable and their fair value can be measured reliably.
 
Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.
 
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the CGU level and are not amortized. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis.
 
The initial identification of intangible assets requires considerable judgment in respect of the classification of the assets and in the assessment of their life. In addition, when assessing the values of the intangible assets, management is required to exercise judgment in determining the future profitability and cash flows of those assets, royalty rates, life of customer base and the appropriate weighted average cost of capital. The subsequent impairment reviews equally require continuing assessment of the above factors as well as continuous assessment of the assets’ lives. Gains and losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Consolidated Income Statement when the asset is derecognized.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                Accounting policies (continued)
 
Critical accounting estimates and judgements (continued)
 
Leases
 
Lease agreements are evaluated to determine if they are finance leases meeting the following main criteria:
 
·                   The lease transfers ownership of the asset to the lessee by the end of the lease term,
 
·                   The lessee has the option to purchase the asset at a price that is expected to be sufficiently lower than the fair value at the date the option becomes exercisable for it to be reasonably certain, at the inception of the lease, that the option will be exercised,
 
·                   The lease term is for the major part of the economic life of the asset even if title is not transferred,
 
·                   At the inception of the lease the present value of the minimum lease payments amounts to at least substantially all of the fair value of the leased asset, and
 
·                   The leased assets are of such a specialised nature that only the lessee can use them without major modifications.
 
In determining whether the above criteria are met, critical estimates and judgements, including but not limited to the fair value of the leased asset, the economic life of the leased asset, and the discount rate used to calculate the present value of the minimum lease payments, are used. The accounting treatment of a particular lease is based on the classification and the Group’s accounting policy for leases described above.
 
Fair value measurement
 
The Group measures financial instruments such as derivatives, at fair values at each balance sheet date. Fair value related disclosures for financial instruments and non-financial assets that are measured at fair value or where the fair values are disclosed, are summarised in the following notes:

·                   Disclosures for valuation methods, significant estimates and assumptions	Note 1, 2, 25	
·                   Quantitative disclosures of fair value measurement hierarchy	Note 25	
·                   Financial instruments (including those carried at amortized cost)	Note 25	
 
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
 
·                   in the principal market for the asset or liability; or
·                   in the absence of a principal market, in the most advantageous market for the asset or liability.
 
The principal or the most advantageous market must be accessible by the Group.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                Accounting policies (continued)
 
Critical accounting estimates and judgements (continued)
 
Fair value measurement (continued)
 
The fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
 
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
 
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows based on the lowest level input that is significant to the fair value measurement as a whole:
 
·                   Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
·                   Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
·                   Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
 
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
 
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy, as explained above.
 
Pension obligations
 
The present value of pension obligations depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost/(income) for pensions include the expected long-term rate of return on the relevant plan assets and the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations.
 
The expected return on plan assets assumption is determined on a uniform basis, taking into consideration long-term historical returns, asset allocation and future estimates of long-term investment returns.
 
The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the pension obligations. In determining the appropriate discount rate, the Group considers the interest rates of Exchange Fund Notes that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.
 
Other key assumptions for pension obligations are based in part on current market conditions. Additional information is disclosed in Note 22.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                Accounting policies (continued)
 
Critical accounting estimates and judgements (continued)
 
Share based payments
 
The Group operates an equity settled share based compensation plan.
 
The fair value of the employee services received under share based payment plans is recognized as an expense in the Consolidated Income Statement. Fair value is calculated by using the Black Scholes Option Pricing Model for share option schemes. The amount charged over the vesting period is determined by reference to the fair value of share incentives excluding the impact of any non-market vesting conditions. Non-market vesting conditions are considered within the assumptions to estimate the number of share incentives that are expected to vest. The impact of the revision of original estimates, if any, is recognized in the Consolidated Income Statement over the remaining vesting period with corresponding adjustments made to equity . The cash payment is accounted for as a reduction to shareholders’ equity, except when the cash settlement exceeds the fair value of the equity instruments that would have been issued, for which such amount is recorded to expense.
 
The application of both the Black-Scholes Option Pricing Model and the Binomial method require the application of a number of judgments including volatility, risk free interest rate, and expected life to exercise. Accordingly the recognition of the fair value expense of the employee services received under share based payment plans could vary if significantly different assumptions were applied to the valuation models.
 
Control and consolidation
 
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. On March 2, 2015, the Group completed an acquisition of 90% interest in The British International Schools Group (Vietnam). In accordance with IFRS 10 — Consolidated Financial Statements, the Group gained control of BIS Vietnam from January 1, 2015 and incorporated the results from the same date. Financial and operating control was deemed to be gained from January 1, 2015, because the Group obtained power over the relevant activities of Vietnam (including the right to appoint key staff and set fees) and the risks and rewards of Vietnam. After certain administrative matters were concluded, the acquisition was completed on March 2, 2015. The impact of consolidation from January 1, 2015 increased Revenue by $9.0 million and EBITDA by $1.4 million.
 
On February 26, 2016, the Group established a dual-curriculum school, Nord Anglia Chinese International School Shanghai, by utilizing a legal structure through a structured entity which involves not owning directly the equity interest in the school. In accordance with IFRS 10 - Consolidated financial statements, the Group gained effective control and incorporated the results from the same date.
 
Functional currency
 
In assessing the functional currencies of the Group’s subsidiaries, management exercises judgement in relation to whether the subsidiaries are to be treated as an extension of the reporting entity or whether they operate with a significant degree of autonomy. For those subsidiaries that are not deemed to have local autonomy they follow the functional currency of the parent company or that of another company they are operating on behalf of. For those subsidiaries that are deemed to have local activity / autonomy, the second stage of the assessment is to review factors that impact the functional currency at the local level such as the currency that mainly influences the sales price for its goods and services and the labour materials and other costs of providing goods and services.
 
Taxation
 
Deferred tax liabilities of $2.1 million (2015 - $3.2 million, 2014 - $1.9 million) on assessable temporary differences have been recognized on undistributed earnings of $20.9 million (2015 - $32.3 million, 2014 - $19.0 million). There are undistributed earnings of $52.1 million (2015 - $48.5 million, 2014 - $38.6 million) which, if paid out as dividends, would be subject to tax in the hands of the recipient. An assessable temporary difference exists, but no deferred tax liability has been recognized on such undistributed earnings as the parent entity is able to control the timing of the distributions from the subsidiaries and it is not expected to distribute these profits in the foreseeable future. The undistributed earnings will be permanently reinvested. The tax impact if such earnings were distributed would be $5.2 million (2015 - $2.5 million, 2014 - $2.0 million).
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                Accounting policies (continued)
 
Critical accounting estimates and judgements (continued)
 
Taxation (continued)
 
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits. The Group has $79.0 million of recognized deferred tax assets, including $38.1 million of tax losses carried forward and other recognized timing differences of $40.9 million. The deferred tax asset on recognized tax losses relate mainly to the US, amounting to $34.5 million where expiration is 20 years and Switzerland of $2.6 million where expiration is 6 years, and others where there is no time expiration. The Group also has $49.7 million of unrecognized tax losses carried forward. These losses relate to subsidiaries that have a history of losses, which do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries neither have any taxable temporary difference nor any opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize deferred tax assets on the tax losses carried forward. If the Group was able to recognize all unrecognized deferred tax assets, profit and equity would have increased by $49.7 million net base on the statutory tax rate of each respective country and company where the Directors do not recognize a deferred tax asset. This would lead to a total deferred tax asset of $128.7 million. Further details on deferred taxes are disclosed in Note 15.
 
The Group is subject to income taxes in numerous jurisdictions but also enjoys tax concession and benefits in jurisdictions including Hong Kong, Thailand and Mexico. Significant judgement is required in determining the worldwide provision for income taxes. There are transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognizes liabilities for potential tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were recorded initially, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The Group believes that it has provided for all probable and estimable tax liabilities and thus therefore does not expect any liability arising from audits to have a material impact on the Group's results of operations, liquidity, capital resources or financial position.
 
Recent accounting pronouncements
 
The Group considers that there are no relevant standards or relevant interpretations mandatory for the current accounting period that have not been applied.
 
The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group’s financial statements are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.
 
IFRS 9 - Financial instruments
 
In July 2014, the IASB issued the final version of IFRS 9 - Financial instruments that replaces IAS 39 - Financial instruments: recognition and measurement and all previous versions of IFRS 9. IFRS 9 is effective for annual periods beginning on or after January 1, 2018. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory.
 
The Group plans to adopt the new standard on the required effective date. During 2015, the Group has performed a high-level impact assessment of all three aspects of IFRS 9. This preliminary assessment is based on currently available information and may be subject to changes arising from further detailed analyses or additional reasonable and supportable information being made available to the Group in the future. Overall, the Group is continuing to evaluate the change but expects no significant impact on its Consolidated Balance Sheet.
 
The Group is continuing to evaluate but does not expect a significant impact on its Consolidated Balance Sheet or equity on applying the classification and measurement requirements of IFRS 9. It expects to continue measuring at fair value all financial assets currently held at fair value. The equity shares in non-listed companies are intended to be held for the foreseeable future.
 
IFRS 9 requires the Group to record expected credit losses on all of its debt securities, loans and trade receivables, either on a 12-month or lifetime basis. The Group expects to apply the simplified approach and record lifetime expected losses on all trade receivables. The Group is continuing to evaluate the change but does not expect a significant impact.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
1                                Accounting policies (continued)
 
Recent accounting pronouncements (continued)
 
IFRS 15 - Revenue from contracts with customers
 
The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 - Revenue and IAS 11 — Construction contracts.
 
The new standard is based on the principle that revenue is recognized when control of a good or service transfers to a customer- so the notion of control replaces the existing notion of risks and rewards.
 
The standard permits a modified retrospective approach for the adoption. Under this approach entities will recognize transitional adjustments in retained earnings on the date of initial application (i.e. without restating the comparative period). They will only need to apply the new rules to contracts that are not completed as of the date of initial application. The Group is continuing to evaluate the change.
 
IFRS 16 — Leases
 
The IASB issued IFRS 16 — Leases in January 2016. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, i.e. the customer (‘lessee’) and the supplier (‘lessor’).
 
IFRS 16 is effective from 1 January 2019. A company can choose to apply IFRS 16 before that date but only if it also applies IFRS 15 — Revenue from contracts with customers.
 
IFRS 16 eliminates the classification of leases as either operating leases or finance leases as is required by IAS 17 and, instead, introduces a single lessee accounting model. Applying that model, a lessee is recognize:
 
a)                                     assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value; and
 
b)                                     depreciation of lease assets separately from interest on lease liabilities in the Consolidated Income Statement.
 
The Group is continuing to evaluate the change and expects a significant impact on its balance sheet, due to the large number of operating leases.
 
Annual Improvements 2012-2014 Cycle
 
These improvements are effective for annual periods beginning on or after January 1, 2016.
 
The latest annual improvements clarify:
 
·                   IFRS 2 Share-based Payment This improvement is applied prospectively and clarifies various issues relating to the definitions of performance and service conditions which are vesting conditions. The clarifications are consistent with how the Group has identified any performance and service conditions which are vesting conditions in previous periods. In addition, the Group had not granted any awards during the second half of 2014 and 2015. Thus, these amendments did not impact the Group’s financial statements or accounting policies.
 
·                   IFRS 5 — Non-current assets held for sale and discontinued operations — when an asset (or disposal group) is reclassified from ‘held for sale’ to ‘held for distribution’ or vice versa, this does not constitute a change to a plan of sale or distribution and does not have to be accounted for as such.
 
·                   IFRS 7 — Financial instruments: disclosures — specific guidance for transferred financial assets to help management determine whether the terms of a servicing arrangement constitute ‘continuing involvement’ and, therefore, whether the asset qualifies for de-recognition.
 
·                   IFRS 7 — Financial instruments: disclosures — that the additional disclosures relating to the offsetting of financial assets and financial liabilities only need to be included in interim reports if required by IAS 34 — Interim financial reporting.
 
·                   IAS 12 — Recognition of deferred tax assets for unrealized losses — clarification of the accounting for deferred tax where an asset is measured at fair value and that fair value is below the asset’s tax base.
 
·                   IAS 19 — Employee benefits — that when determining the discount rate for post-employment benefit obligations, it is the currency that the liabilities are denominated in that is important and not the country where they arise.
 
·                   IAS 34 — Interim financial reporting — what is meant by the reference in the standard to ‘information disclosed elsewhere in the interim financial report’ and adds a requirement to cross-reference from the interim financial statements to the location of that information.
 
F- 44 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
2                                Business combinations
 
Acquisitions in 2014

 	 	Principal activity	 	Date of
acquisition	 	Proportion of
voting equity
interests
acquired	 	Consideration
transferred
$m	 	
 	 	 	 	 	 	 	 	 	 	
Dover Court International School (Pte.) Limited	 	Premium School	 	04/22/14	 	100%	 	25.2	 	
Neptune Education Holdings Limited	 	Holding company	 	07/10/14	 	100%	 	20.0	 	
 
Dover Court Preparatory School and Neptune Education Holdings Limited (Northbridge International School Cambodia) were acquired as part of the continued expansion of the Group’s activities in Premium Schools internationally.
 
Consideration transferred

 	 	Dover Court
Preparatory
School
$m	 	Neptune
Education
Holdings
Limited
$m	 	
 	 	 	 	 	 	
Cash	 	25.2	 	15.0	 	
Deferred consideration	 	—	 	5.0	 	
 	 	 	 	 	 	
Total consideration transferred	 	25.2	 	20.0	 	
 
The deferred consideration of $5.0 million relating to the acquisition of Neptune Education Holdings Limited was settled on October 11, 2016.
 
Acquisition-related costs have been recognized as an expense within the ‘Exceptional expenses’ line item in the Consolidated Income Statement.
 
F- 45 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
2                                Business combinations (continued)
 
Acquisitions in 2014 (continued)
 
Fair value of assets acquired and liabilities recognized at the date of acquisition
 
The final fair value of assets acquired and liabilities recognized at the date of acquisition is as follows.

 	 	Dover Court
International
School (Pte.)
Limited
$m	 	Neptune
Education
Holdings Limited
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	
Non-current assets	 	 	 	 	 	 	 	
Brand (see Note 13)	 	7.2	 	7.7	 	14.9	 	
Customer relationships (see Note 13)	 	11.2	 	8.8	 	20.0	 	
Property, plant and equipment (see Note 11)	 	3.0	 	0.7	 	3.7	 	
 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	
Trade and other receivables	 	1.5	 	0.1	 	1.6	 	
Cash and cash equivalents	 	9.7	 	0.1	 	9.8	 	
 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	
Trade and other payables	 	(4.9	)	(0.1	)	(5.0	)	

Current tax liabilities	 	(0.3	)	(0.2	)	(0.5	)	
 	 	 	 	 	 	 	 	
Non-current liabilities	 	 	 	 	 	 	 	
Deferred tax liabilities (see Note 15)	 	(3.1	)	(3.3	)	(6.4	)	
 	 	 	 	 	 	 	 	
 	 	24.3	 	13.8	 	38.1	 	
 
The fair value of trade and other receivables is $1.6 million and the gross contractual amount for trade receivables due is $1.6 million, of which $nil is expected to be uncollectible.
 
Goodwill arising on acquisition

 	 	Dover Court
Preparatory
School
$m	 	Neptune
Education
Holdings
Limited
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	
Consideration transferred	 	25.2	 	20.0	 	45.2	 	
Less: fair value of identifiable net assets acquired	 	(24.3	)	(13.8	)	(38.1	)	
 	 	 	 	 	 	 	 	
Goodwill arising on acquisition (see Note 13)	 	0.9	 	6.2	 	7.1	 	
 
Goodwill arose from the two acquisitions. The consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and assembled workforce of the acquired businesses. These benefits are not recognized separately from goodwill because they do not meet the recognition criteria for identifiable assets. None of the goodwill arising on these acquisitions is expected to be deductible for tax purposes.
 
F- 46 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
2                                Business combinations (continued)
 
Acquisitions in 2014 (continued)
 
The initial accounting for the acquisitions of Dover Court International School (Pte.) Limited (“Dover Court”) and Neptune Education Holdings Limited (“Northbridge”) has been finalized in 2015.
 
Acquisitions in 2015

 	 	Principal activity	 	Date of
acquisition	 	Proportion of
voting equity
interests
acquired	 	Consideration
transferred
$m	 	
 	 	 	 	 	 	 	 	 	 	
British International Schools Group, Vietnam	 	Premium Schools	 	01/01/2015	 	90%	 	161.5	 	
Sterling International Schools C Corporation	 	Holding Company	 	06/25/2015	 	100%	 	604.5	 	
 
British International Schools Group, Vietnam and Sterling International Schools C Corporation were acquired so as to continue the expansion of the Group’s activities in Premium Schools internationally.
 
Consideration transferred

 	 	Sterling
International
Schools C
Corporation
$m	 	British International
Schools Group
$m	 	
 	 	 	 	 	 	
Cash	 	577.2	 	116.0	 	
Deferred consideration	 	2.3	 	23.1	 	
Contingent consideration	 	25.0	 	—	 	
Equity	 	—	 	22.4	 	
 	 	 	 	 	 	
Total consideration transferred	 	604.5	 	161.5	 	
 
The contingent consideration arrangement required the Group to pay, in cash, to the former owners of Sterling International Schools C Corporation, $25.0 million when the number of enrolments of Sterling International Schools C Corporation, in the aggregate, as of September 30, 2015 exceeds the enrolments as of May 31, 2015. This amount ($25.0 million) has been subsequently settled on November 6, 2015, therefore the carrying value is equal to the fair value. Deferred consideration amounting to $2.3 million was settled on October 29, 2015.
 
$8.5 million of the $23.1 million deferred consideration relating to the acquisition of British International Schools Group, Vietnam was settled in November 2016.
 
Acquisition-related costs have been recognized as an expense within the ‘Exceptional expenses’ line item in the Consolidated Income Statement.
 
F- 47 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
2                                Business combinations (continued)
 
Acquisitions in 2015 (continued)
 
Fair value of assets acquired and liabilities recognized at the date of acquisition

 	 	Sterling
International
Schools
Corporation
$m	 	British
International
Schools Group
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	
Non-current assets	 	 	 	 	 	 	 	
Brand (see Note 13)	 	152.7	 	—	 	152.7	 	
Customer relationships (see Note 13)	 	34.6	 	34.3	 	68.9	 	
IT Software (see Note 13)	 	0.3	 	0.2	 	0.5	 	
Property, plant and equipment (see Note 11)	 	300.0	 	9.4	 	309.4	 	
Other non-current assets	 	0.7	 	20.4	 	21.1	 	
 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	
Trade and other receivables	 	9.9	 	3.3	 	13.2	 	
Cash and cash equivalents	 	35.7	 	6.9	 	42.6	 	
 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	
Trade and other payables	 	(125.4	)	(40.4	)	(165.8	)	
Finance lease liabilities	 	(0.1	)	—	 	(0.1	)	
Current tax liabilities	 	(0.8	)	(0.3	)	(1.1	)	
Short-term debt and loans	 	(0.7	)	—	 	(0.7	)	
 	 	 	 	 	 	 	 	
Non-current liabilities	 	 	 	 	 	 	 	
Deferred tax liabilities (see Note 15)	 	(31.2	)	(3.4	)	(34.6	)	
Other payables	 	(2.7	)	(1.7	)	(4.4	)	
Finance lease liabilities	 	(62.6	)	—	 	(62.6	)	
Retirement benefit obligation	 	(13.8	)	—	 	(13.8	)	
 	 	 	 	 	 	 	 	
 	 	296.6	 	28.7	 	325.3	 	
 
F- 48 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
2                                Business combinations (continued)
 
Acquisitions in 2015 (continued)
 
Fair value of assets acquired and liabilities recognized at the date of acquisition (continued)
 
The fair value of trade and other receivables is $13.2 million and includes trade receivables with a fair value of $7.1 million. The gross contractual amount for trade receivables due is $11.5 million, of which $4.4 million is expected to be uncollectible.
 
Adjustments to the 2015 financial statements to reflect retrospectively the final adjustments to the provisional allocation of the purchase price for the Sterling International Schools Corporation acquisition
 
During the provisional purchase price allocation exercise in June 2015, the valuation of three of the Sterling International Schools Cooperation schools was based on the assumption that the schools would be operated. As a result of a sale and leaseback transaction in 2016, additional information was obtained to support the final fair value of the properties. As a result, the acquisition date fair value of Property, plant and equipment was $300.0 million, an increase of $15.2 million over the provisional value. Furthermore, the acquisition date fair value of Trade and other payables, non-current Other payables and Finance lease liabilities was $125.4 million, $2.7 million and $62.6 million respectively, an increase of $1.0 million, $0.4 million and $0.5 million over the provisional amounts. As a result, there was a net increase in the deferred tax liabilities of $4.7 million. There was also a corresponding decrease in goodwill of $8.6 million, resulting in $308.2 million of total goodwill arising on the acquisition. The increased depreciation charge on the Property, plant and equipment from the acquisition date to August 31, 2015 was not considered to be material to the Group.
 
Goodwill arising on acquisition

 	 	Sterling
International
Schools C
Corporation
$m	 	British
International
Schools Group
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	
Consideration transferred	 	604.5	 	161.5	 	766.0	 	
Non-controlling interest	 	0.3	 	2.9	 	3.2	 	
Less: fair value of identifiable net assets acquired	 	(296.6	)	(28.7	)	(325.3	)	
 	 	 	 	 	 	 	 	
Goodwill arising on acquisition (see Note 13)	 	308.2	 	135.7	 	443.9	 	
 
Acquisitions in the current period
 
In February 2016, the Group completed the acquisition of student and staff contracts, furniture, equipment, cash and receivables of the Lausanne campus of Institut Catholique Mont-Olivet, a school formed under the laws of Switzerland. The Group operated the school from February 2016 until the end of the 2015/2016 academic year on its original campus, and relocated the students and staff to our existing school at Collège Champittet at the beginning of the 2016/2017 academic year. The acquisition aims at expanding the Group’s activities and education services in Switzerland. The aggregate consideration and goodwill arising on acquisition was $2.7 million and $1.4 million, respectively.
 
F- 49 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
3                                Segmental reporting
 
The Group’s reporting segments are determined based on the Group’s internal reporting to the Chief Operating Decision Maker (“CODM”). The CODM has been determined to be the Executive Committee (“EXCO”) as it is primarily responsible for the allocation of resources to segments and the assessment of performance of the segments.
 
The CODM considers the principal activities of the Group to be:
 
·                                Premium Schools and associated activities in:
China - People’s Republic of China and Hong Kong SAR;
Europe - Switzerland, Slovakia, Hungary, Czech Republic, Spain, Poland;
Middle East (“ME”) - United Arab Emirates, Qatar;
Southeast Asia (“SEA”) - Thailand, Singapore, Cambodia, Vietnam; and
North America - United States of America, Mexico.
 
·                                Unallocated — being the unallocated operations, related to Central & Regional head office costs and the Learning Services division.
 
In the years ended August 31, 2014 and August 31, 2015, ME and SEA had been considered to be one reporting segment. For comparative purposes, the segment results below for 2014 and 2015 have been adjusted to show ME and SEA as two separate reporting segments, to be consistent with the year ended August 31, 2016. The change has reflects a more strategic approach to the two regions all designed to support growth and opportunities unique to each segment and will further support the Group’s strategy and reflect an end-market orientation and alignment to our values.
 
The CODM uses revenue and Adjusted EBITDA, earnings before interest, tax, depreciation, amortization, impairment, exceptional and other management exceptional items, exchange gain/(loss) and gain/(loss) on disposal of property, plant and equipment, as reviewed at monthly EXCO meetings, as the key measure of the segments’ results as it reflects the segments’ underlying trading performance for the financial year under evaluation. Revenue and Adjusted EBITDA before exceptional items is a consistent measure within the Group.
 
Segment Adjusted EBITDA is an adjusted measure of operating profit and measures the performance of each segment before the impact of interest, tax, depreciation, amortization, impairment, exceptional and other management exceptional items, exchange gain/(loss) and gain/(loss) on disposal of property, plant and equipment.
 
The segment results, the reconciliation of the segment measures to the respective statutory items included in the Consolidated Income Statement, the segment assets and other segment information are as follows:

Year ended August 31, 2014	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	 	165.6	 	136.0	 	48.2	 	37.8	 	68.8	 	456.4	 	18.2	 	474.6	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	78.4	 	26.0	 	11.0	 	11.2	 	23.2	 	149.8	 	(22.4	)	127.4	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA margin	 	47.3	%	19.1	%	22.8	%	29.6	%	33.7	%	32.8	%	(123.1	)%	26.8	%	
 
F- 50 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
3                                Segmental reporting (continued)

Year ended August 31, 2015	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	 	183.2	 	133.3	 	68.6	 	91.6	 	82.6	 	559.3	 	13.8	 	573.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	84.6	 	16.9	 	9.0	 	27.0	 	23.0	 	160.5	 	(29.8	)	130.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA margin	 	46.2	%	12.7	%	13.1	%	29.5	%	27.8	%	28.7	%	(215.9	)%	22.8	%	

Year ended August 31, 2016	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenue	 	197.3	 	211.8	 	87.2	 	130.4	 	224.3	 	851.0	 	5.0	 	856.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	85.8	 	41.9	 	17.5	 	41.9	 	59.7	 	246.8	 	(39.5	)	207.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA margin	 	43.5	%	19.8	%	20.1	%	32.1	%	26.6	%	29.0	%	(790.0	)%	24.2	%	
 
The parent entity is domiciled in the Cayman Islands and did not generate external revenue during the years presented.
 
F- 51 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
3                                Segmental reporting (continued)
 
Reconciliation of Adjusted EBITDA to profit after tax

2014	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	78.4	 	26.0	 	11.0	 	11.2	 	23.2	 	149.8	 	(22.4	)	127.4	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exceptional items (see Note 4)	 	(0.1	)	(1.2	)	13.3	 	—	 	(0.3	)	11.7	 	(111.9	)	(100.2	)	
Other management exceptional items *	 	(1.7	)	(0.0	)	(2.7	)	(0.0	)	—	 	(4.4	)	(4.1	)	(8.5	)	
Other gains/(losses)	 	—	 	(0.1	)	(0.4	)	—	 	(1.9	)	(2.4	)	4.5	 	2.1	 	
Loss on disposal of property, plant and equipment	 	(0.1	)	(0.0	)	—	 	(0.0	)	—	 	(0.1	)	—	 	(0.1	)	
Depreciation	 	(8.6	)	(4.9	)	(4.1	)	(0.8	)	(3.7	)	(22.1	)	(1.3	)	(23.4	)	
Amortization	 	(0.0	)	(0.1	)	(0.0	)	(0.0	)	(0.1	)	(0.2	)	(10.2	)	(10.4	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit/(loss)	 	67.9	 	19.7	 	17.1	 	10.4	 	17.2	 	132.3	 	(145.4	)	(13.1	)	
Finance income	 	1.7	 	0.2	 	0.0	 	0.1	 	—	 	2.0	 	—	 	2.0	 	
Finance expense	 	(0.4	)	(0.3	)	(0.0	)	(0.0	)	—	 	(0.7	)	(54.8	)	(55.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	69.2	 	19.6	 	17.1	 	10.5	 	17.2	 	133.6	 	(200.2	)	(66.6	)	
Tax	 	(15.2	)	(3.4	)	(1.4	)	(0.2	)	(1.3	)	(21.5	)	(2.1	)	(23.6	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the year attributable to equity holders	 	54.0	 	16.2	 	15.7	 	10.3	 	15.9	 	112.1	 	(202.3	)	(90.2	)	

2015	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	84.6	 	16.9	 	9.0	 	27.0	 	23.0	 	160.5	 	(29.8	)	130.7	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exceptional items (see Note 4)	 	(0.0	)	(0.7	)	(0.0	)	(0.1	)	(0.4	)	(1.2	)	(17.6	)	(18.8	)	
Other management exceptional items *	 	(1.4	)	(1.7	)	(0.0	)	(0.3	)	(3.7	)	(7.1	)	(1.9	)	(9.0	)	
Other gains/(losses)	 	0.2	 	1.2	 	0.4	 	(0.5	)	1.4	 	2.7	 	9.7	 	12.4	 	
(Loss)/profit on disposal of property, plant and equipment	 	(0.1	)	0.1	 	—	 	(0.0	)	—	 	(0.0	)	(0.3	)	(0.3	)	
Depreciation	 	(11.7	)	(6.9	)	(5.0	)	(4.6	)	(5.9	)	(34.1	)	(0.5	)	(34.6	)	
Amortization	 	(0.6	)	(3.0	)	(0.9	)	(5.3	)	(3.0	)	(12.8	)	(1.1	)	(13.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit/(loss)	 	71.0	 	5.9	 	3.5	 	16.2	 	11.4	 	108.0	 	(41.5	)	66.5	 	
Finance income	 	1.1	 	0.1	 	0.0	 	0.2	 	0.1	 	1.5	 	0.9	 	2.4	 	
Finance expense	 	(0.0	)	(0.8	)	(0.0	)	(0.1	)	(0.0	)	(0.9	)	(47.8	)	(48.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	72.1	 	5.2	 	3.5	 	16.3	 	11.5	 	108.6	 	(88.4	)	20.2	 	
Tax	 	(12.4	)	(8.0	)	(0.8	)	(1.0	)	8.3	 	(13.9	)	1.4	 	(12.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the year attributable to equity holders	 	59.7	 	(2.8	)	2.7	 	15.3	 	19.8	 	94.7	 	(87.0	)	7.7	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
3                                Segmental reporting (continued)
 
Reconciliation of Adjusted EBITDA to profit after tax (continued)

2016	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	85.8	 	41.9	 	17.5	 	41.9	 	59.7	 	246.8	 	(39.5	)	207.3	 	
Adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Exceptional items (see Note 4)	 	(0.0	)	(1.2	)	(0.1	)	(0.3	)	(3.5	)	(5.1	)	(3.7	)	(8.8	)	
Other management exceptional items *	 	(6.0	)	(0.8	)	(0.2	)	(1.3	)	(1.7	)	(10.0	)	(10.1	)	(20.1	)	
Other gains/(losses)	 	0.2	 	0.3	 	0.8	 	0.0	 	(1.4	)	(0.1	)	13.5	 	13.4	 	
(Loss)/profit on disposal of property, plant and equipment	 	0.0	 	0.3	 	0.0	 	(0.2	)	(0.2	)	(0.1	)	(0.3	)	(0.4	)	
Depreciation	 	(11.8	)	(10.4	)	(5.4	)	(6.4	)	(11.8	)	(45.8	)	(0.7	)	(46.5	)	
Amortization	 	(0.9	)	(4.2	)	(1.2	)	(5.5	)	(5.5	)	(17.3	)	(1.4	)	(18.7	)	
Impairment	 	—	 	—	 	(1.0	)	—	 	—	 	(1.0	)	—	 	(1.0	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating profit/(loss)	 	67.3	 	25.9	 	10.4	 	28.2	 	35.6	 	167.4	 	(42.2	)	125.2	 	
Finance income	 	1.2	 	0.1	 	0.0	 	0.6	 	0.4	 	2.3	 	0.0	 	2.3	 	
Finance expense	 	(0.1	)	(3.0	)	—	 	0.0	 	0.0	 	(3.1	)	(62.8	)	(65.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	68.4	 	23.0	 	10.4	 	28.8	 	36.0	 	166.6	 	(105.0	)	61.6	 	
Tax	 	(10.1	)	(9.5	)	(0.8	)	(1.6	)	7.2	 	(14.8	)	2.4	 	(12.4	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the year attributable to equity holders	 	58.3	 	13.5	 	9.6	 	27.2	 	43.2	 	151.8	 	(102.6	)	49.2	 	

* Other management exceptional items are costs which fall outside the definition of exceptional costs for statutory purposes but it is the view of the Directors that these costs should be highlighted in order that the underlying profit of the Group can be fully evaluated.
 
In 2014, this amount includes a share based payment charges of $3.0 million, school pre-opening costs of $4.1 million and management fees of $1.2 million payable.
 
In 2015, this amount includes share based payment charges of $2.3 million, school pre-opening costs of $4.3 million, roll out costs of The Julliard-Nord Anglia Performing Arts Program of $0.7 million and costs associated with expatriate taxes levied on teacher salaries of $1.2 million.
 
In 2016, this amount includes a share based payment charge of $6.7 million, school pre-opening costs of $7.7 million, which includes $4.7 million in relation to the new China dual-curriculum school that opened in September 2016, debt waiver fees of $1.1 million, Sarbanes-Oxley implementation costs of $0.6 million and Global Campus costs of $4.0 million, which relates to the roll out of the Juilliard-Nord Anglia Performing Arts Program ($1.9 million), roll out of the MIT-Nord Anglia Collaboration ($0.9 million), and creation of a second Global Campus site in Switzerland ($1.2 million).
 
Segment assets

At August 31, 2014	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total segment non-current assets	 	345.2	 	226.3	 	62.2	 	89.7	 	248.6	 	972.0	 	7.9	 	979.9	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
3                                Segmental reporting (continued)
 
Segment assets (continued)

At August 31, 2015	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total segment non-current assets	 	426.1	 	537.0	 	85.3	 	251.0	 	691.8	 	1,991.2	 	8.7	 	1,999.9	 	

At August 31, 2016	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total segment non-current assets	 	402.3	 	563.8	 	63.9	 	271.8	 	519.1	 	1,820.9	 	25.1	 	1,846.0	 	
 
The parent entity is domiciled in the Cayman Islands and did not have any non-current assets during the years presented.
 
Other segment information

Year ended August 31, 2014	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditure (including acquisitions through business combinations):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	31.3	 	11.5	 	9.4	 	6.7	 	6.0	 	64.9	 	0.6	 	65.5	 	
Goodwill and other intangible assets	 	0.0	 	0.3	 	0.1	 	42.1	 	0.0	 	42.5	 	0.2	 	42.7	 	
Depreciation of tangible assets	 	(8.6	)	(4.9	)	(4.1	)	(0.8	)	(3.7	)	(22.1	)	(1.3	)	(23.4	)	
Amortization of intangible assets	 	(0.0	)	(0.1	)	(0.0	)	(0.0	)	(0.1	)	(0.2	)	(10.2	)	(10.4	)	
Exceptional items (see Note 4)	 	(0.1	)	(1.2	)	14.3	 	(1.0	)	(0.3	)	11.7	 	(111.9	)	(100.2	)	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
3                                Segmental reporting (continued)
 
Other segment information (continued)

Year ended August 31, 2015	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditure (including acquisitions through business combinations):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	22.0	 	81.5	 	6.4	 	15.8	 	227.5	 	353.2	 	1.3	 	354.5	 	
Goodwill and other intangible assets	 	76.4	 	231.3	 	0.1	 	170.7	 	188.7	 	667.2	 	1.1	 	668.3	 	
Depreciation of tangible assets	 	(11.7	)	(6.9	)	(5.0	)	(4.6	)	(5.9	)	(34.1	)	(0.5	)	(34.6	)	
Amortization of intangible assets	 	(0.6	)	(3.0	)	(0.9	)	(5.3	)	(3.0	)	(12.8	)	(1.1	)	(13.9	)	
Exceptional items (see Note 4)	 	(0.0	)	(0.7	)	(0.0	)	(0.1	)	(0.4	)	(1.2	)	(17.6	)	(18.8	)	

Year ended August 31, 2016	 	China
$m	 	Europe
$m	 	ME
$m	 	SEA
$m	 	North
America
$m	 	Total
reportable
segments
$m	 	Un-
allocated
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditure (including acquisitions through business combinations):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	26.0	 	35.2	 	6.6	 	8.9	 	15.6	 	92.3	 	0.8	 	93.1	 	
Goodwill and other intangible assets	 	0.2	 	3.7	 	0.1	 	0.1	 	0.2	 	4.3	 	0.8	 	5.1	 	
Depreciation of tangible assets	 	(11.8	)	(10.4	)	(5.4	)	(6.4	)	(11.8	)	(45.8	)	(0.7	)	(46.5	)	
Amortization of intangible assets	 	(0.9	)	(4.2	)	(1.2	)	(5.5	)	(5.5	)	(17.3	)	(1.4	)	(18.7	)	
Exceptional items (see Note 4)	 	(0.0	)	(1.2	)	(0.1	)	(0.3	)	(3.5	)	(5.1	)	(3.7	)	(8.8	)	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
4                                Exceptional expenses

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Exceptional administrative expenses	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
a   Corporate restructure	 	(3.2	)	(0.1	)	(0.6	)	
b   Bond issuance, redemption expense and commitment fees, net	 	(89.9	)	(10.0	)	—	 	
c   Acquisition	 	(1.5	)	(5.3	)	(0.9	)	
d   Integration	 	(4.0	)	(2.4	)	(3.7	)	
e   Sale and leaseback	 	—	 	—	 	(3.6	)	
f   Others, net	 	(1.6	)	(1.0	)	(0.0	)	
 	 	 	 	 	 	 	 	
 	 	(100.2	)	(18.8	)	(8.8	)	

a	Corporate restructure in the current, prior year and 2014 is in relation to the closure of the Learning Services business in the Middle East and in the UK at contract completion. Included within the 2014 balance is $2.5 million of costs relating to the transfer of the Group revolving credit facilities from Barclays Bank plc to The Hongkong and Shanghai Banking Corporation Limited (“HSBC”).	
 	 	
b	In 2015, the $10.0 million charge for commitment fees relates to a loan commitment fee which was not capitalized as it related to excess short-term liquidity retained as part of the Group’s liquidity management. This facility matured during 2015 and is no longer available to the Group.	
 	 	
 	In 2014, the major elements of the $89.9 million exceptional expense were the $77.0 million bond redemption cost arising upon the early redemption of the $490.0 million 10.25% senior secured notes due 2017 and the $150.0 million 8.50% / 9.50% senior PIK toggle notes due 2018, which were all fully redeemed as of April 14, 2014. The remaining $12.9 million was the release of capitalized costs in connection with these notes.	
 	 	
c	Acquisition related costs in 2016 were incurred for potential acquisitions.	
 	 	
 	Acquisition related costs in 2015 were due to the acquired two new subsidiaries (Sterling International Schools C Corporation (“Meritas”) operating in three continents and British International Schools Group, Vietnam) to complement its existing portfolio of Premium Schools, as detailed in Note 2. The $5.3 million relates to legal fees and fees payable to advisors in relation to various aspects of the acquisitions.	
 	 	
 	Acquisition related costs in 2014 were due to the business combinations of Dover Court International School (Pte.) Limited, Singapore and Neptune Education Holdings Limited (Northbridge International School Cambodia), including legal fees and fees payable to advisors in relation to various aspects of the acquisitions, as well as final costs incurred on the acquisitions made in 2013.	
 	 	
d	During 2016, the $3.7 million charge, net of an over provision of $1.8 million relating to the acquisition transaction costs of Meritas (see Note 32c), the majority of the charge pertains to the integration costs for the two groups acquired in 2015 (Meritas operating in three continents and British International Schools Group, Vietnam).	
 	 	
e	The $3.6 million relates to the transaction costs of a sale and leaseback of properties in North America for $167.0 million (see Note 11).	
 	 	
f	The 2016 charge mainly relates to other one off costs pertaining to the Management Information Systems (“MIS”) Project, relating to a system used for operations including enquiry and admissions tracking, student academic progress monitoring, and invoice billing.	
 	 	
 	The 2015 charge of $1.0 million relates to initial public offering expenses ($0.2 million), pre-opening costs for 3 new schools in North America, Middle East and South East Asia regions ($0.5 million) and IT resourcing and travelling costs pertaining to the MIS Project ($0.3 million).	
 	 	
 	The 2014 charge of $1.6 million relates to pre-opening costs of our Tanzania camp ($0.5 million), pre-opening costs on the new schools in Hong Kong and Dubai ($0.7 million) and the part release our overseas employees provision ($0.4 million).	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
5                                Other gains and losses

 	 	2014	 	2015	 	2016	 	
 	 	 	 	 	 	 	 	
Financial assets at fair value through profit or loss:	 	 	 	 	 	 	 	
-           Fair value losses (i)	 	(1.9	)	(1.6	)	(3.8	)	
 	 	 	 	 	 	 	 	
-           Foreign exchange gain, net (ii)	 	4.0	 	14.0	 	17.2	 	
 	 	 	 	 	 	 	 	
 	 	2.1	 	12.4	 	13.4	 	

(i)	Represents the fair value revaluation of derivatives. Losses in 2016 relate to $1.6 million on cross currency swaps, $0.7 million on call options and $1.5 million on embedded lease derivatives (see Note 25a).	
(ii)	Represents the revaluation of intercompany balances denominated in a currency other than the functional currency of each subsidiary, and foreign exchange gains and losses on the revaluation of monetary assets and liabilities.	
 
6                                Expenses and auditors’ remuneration
 
Included in the profit/(loss) are the following:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Staff costs (see Note 7)	 	227.7	 	282.7	 	409.3	 	
Loss on disposal of property, plant and equipment and intangible assets	 	0.1	 	0.3	 	0.4	 	
Operating lease rentals:	 	 	 	 	 	 	 	
Land and buildings	 	42.2	 	57.4	 	75.3	 	
Other	 	0.5	 	0.7	 	1.4	 	
Depreciation in cost of sales	 	21.4	 	33.9	 	45.7	 	
Depreciation	 	2.0	 	0.7	 	0.8	 	
Amortization of intangible assets	 	10.4	 	13.9	 	18.7	 	
Impairment (see Note 13)	 	—	 	—	 	1.0	 	
 
Auditors’ remuneration:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Fees payable to Company’s auditor for the audit of parent Company and consolidated financial statements	 	0.4	 	0.6	 	1.7	 	
 	 	 	 	 	 	 	 	
Disclosure below based on fees payable in respect of services to the company and its subsidiaries	 	 	 	 	 	 	 	
Fees payable to Group’s auditors and their subsidiaries in respect of:	 	 	 	 	 	 	 	
The auditing of accounts of any subsidiary of the company	 	0.5	 	1.4	 	1.9	 	
Tax advisory services	 	0.0	 	0.3	 	0.1	 	
All other services	 	4.2	 	1.6	 	0.5	 	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
7                                Staff numbers and costs
 
The monthly average number of persons employed by the Group (including Directors) during the year, analysed by category, was as follows:

 	 	Number of employees	 	
 	 	2014	 	2015	 	2016	 	
 	 	 	 	 	 	 	 	
Administration and management	 	1,173	 	1,500	 	2,299	 	
Teaching	 	2,616	 	3,223	 	4,719	 	
Advisors and guidance officers	 	39	 	43	 	142	 	
 	 	 	 	 	 	 	 	
 	 	3,828	 	4,766	 	7,160	 	
 
The aggregate employee benefit expense of these persons was as follows:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Wages and salaries	 	206.3	 	256.7	 	365.7	 	
Share based payments (see Note 22)	 	3.0	 	2.3	 	6.7	 	
Social security costs	 	15.4	 	19.3	 	28.2	 	
Contributions to defined contribution plans (see Note 22)	 	1.2	 	2.1	 	3.4	 	
Expenses related to defined benefit plans (see Note 22)	 	1.8	 	2.3	 	5.3	 	
 	 	 	 	 	 	 	 	
 	 	227.7	 	282.7	 	409.3	 	
 
8                                Key management personnel

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Fee, salaries and other short term employment benefits	 	6.7	 	7.9	 	8.6	 	
Share-based payments (see Note 22)	 	2.1	 	1.8	 	6.0	 	
Other benefits	 	0.2	 	0.3	 	0.4	 	
 	 	 	 	 	 	 	 	
 	 	9.0	 	10.0	 	15.0	 	
 
The key management personnel are the Directors and senior managers who received emoluments, as noted above.
 
Other short term employment benefits relate to medical insurance premiums and rental benefit paid.
 
Other benefits relate to contributions to defined contribution schemes.

 	 	2014	 	2015	 	2016	 	
 	 	 	 	 	 	 	 	
Number of key management personnel accruing benefits under:	 	 	 	 	 	 	 	
-        Defined benefit schemes	 	1	 	—	 	—	 	
 
Please refer to Note 22 for the details of the defined benefit schemes.
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
9                                Finance income and expense
 
Recognized in Consolidated Income Statement:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Bank interest	 	2.0	 	2.4	 	2.3	 	
 	 	 	 	 	 	 	 	
Total finance income	 	2.0	 	2.4	 	2.3	 	
 	 	 	 	 	 	 	 	
Net loss on financial instruments designated as fair value through profit or loss:	 	 	 	 	 	 	 	
Derivative financial instruments	 	—	 	—	 	0.5	 	
 	 	 	 	 	 	 	 	
Total interest expense on financial liabilities measured at amortized cost:	 	 	 	 	 	 	 	
Term loan due 2021	 	10.9	 	31.7	 	49.8	 	
5.75% Senior secured notes due 2021	 	—	 	2.3	 	12.7	 	
10.25% Senior secured notes due 2017	 	32.2	 	—	 	—	 	
8.50% Senior PIK toggle notes due 2018	 	8.3	 	—	 	—	 	
Bank loans and overdrafts	 	3.2	 	2.1	 	3.0	 	
Interest on defined benefit pension plan obligation (see Note 22)	 	0.9	 	0.8	 	0.8	 	
Discount unwind on deferred consideration	 	—	 	1.6	 	0.9	 	
Foreign exchange loss/(gain) on senior secured notes	 	—	 	9.7	 	(4.7	)	
Finance lease liabilities	 	—	 	0.5	 	2.9	 	
 	 	 	 	 	 	 	 	
Total finance expense	 	55.5	 	48.7	 	65.9	 	
 	 	 	 	 	 	 	 	
Net finance expense	 	53.5	 	46.3	 	63.6	 	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
10                         Income tax expense
 
Recognized in the Consolidated Income Statement:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Current tax expense	 	 	 	 	 	 	 	
Overseas current tax charge	 	21.3	 	20.2	 	29.4	 	
Adjustment for prior years overseas tax charge	 	0.7	 	2.0	 	0.3	 	
 	 	 	 	 	 	 	 	
Current tax expense	 	22.0	 	22.2	 	29.7	 	
 	 	 	 	 	 	 	 	
Deferred tax (income)/expense	 	 	 	 	 	 	 	
Origination and reversal of temporary differences	 	(2.1	)	(9.5	)	(17.3	)	
Adjustment in respect of prior years	 	3.7	 	(0.2	)	—	 	
 	 	 	 	 	 	 	 	
Deferred tax (income)/expense	 	1.6	 	(9.7	)	(17.3	)	
 	 	 	 	 	 	 	 	
Total tax expense	 	23.6	 	12.5	 	12.4	 	
 
Reconciliation of effective tax rate
 
The tax assessed for the period differs from the standard rate of Corporation tax in China of 25.0% (2015 - 25.0%, 2014 - 25.0%) per the explanation below:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	(66.6	)	20.2	 	61.6	 	
 	 	 	 	 	 	 	 	
Tax using a tax rate of 25.0% (2015 - 25.0%, 2014 - 25.0%)	 	(16.7	)	5.1	 	15.4	 	
Effect of tax rates in foreign jurisdictions	 	12.1	 	2.2	 	(9.2	)	
Non-deductible expenses/(non-assessable income)	 	8.0	 	(7.1	)	1.2	 	
Withholding tax paid or payable on overseas dividends and other income for which no relief is available	 	6.0	 	1.0	 	2.1	 	
Losses for which no deferred tax asset was recognized	 	9.8	 	9.9	 	5.4	 	
Recognition of temporary differences not recognized previously	 	—	 	—	 	(2.5	)	
Change in tax rates in foreign jurisdiction	 	—	 	—	 	(0.2	)	
Utilization of losses brought forward not recognized	 	—	 	(0.4	)	(0.1	)	
Under/(Over) provision in prior years	 	4.4	 	1.8	 	0.3	 	
 	 	 	 	 	 	 	 	
Total tax expense	 	23.6	 	12.5	 	12.4	 	
 	 	 	 	 	 	 	 	
Tax credited/(charged) to other comprehensive income *	 	0.2	 	0.9	 	3.3	 	

* Included within Actuarial losses on defined benefit pension schemes
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
10                         Income tax expense (continued)
 
The adjustment in respect of prior year primarily relates to changes in the tax deductibility of certain expenses following a review with a local tax authority.
 
The Group has used the statutory tax rate for China, being 25.0% rather than that for Cayman Islands, being 0.0% or that for the United Kingdom, being 20.6%, as the Group believes this provides a more meaningful comparison, and the majority of the Group’s taxable profits are earned in China, and the majority of the Group’s taxes are paid in China.
 
Deferred tax assets are recognized for tax losses carried forward to the extent that the realization of the related tax benefit through future taxable profits is probable. The Group did not recognize a total deferred tax asset of $49.7 million (2015 - $ 65.7 million, 2014 - $69.9 million). This includes an un-provided deferred tax asset of $34.7 million (2015 - $48.3 million, 2014 - $60.8 million) which relates to UK losses which have no expiry date and for which relief is not anticipated to be available in the foreseeable future. The decrease is mainly attributable to change in tax rates, foreign currency translation and finalization of tax computations. None of these tax losses have been utilized in the current year. It also includes an un-provided deferred tax asset of $15.0 million (2015 - $9.7 million, 2014 - $4.9 million) which relates to losses in overseas entities.
 
Management has determined that it is appropriate to recognize a deferred tax asset of $4.0 million in relation to the full temporary difference arising from the deficit in the UK pension scheme in the current year, as future taxable profits are now considered probable. The un-provided deferred tax asset in relation to the deficit in the UK pension scheme was $7.7 million in 2015 and $4.1 million in 2014.
 
The Group is subject to income taxes in numerous jurisdictions but also enjoys tax concessions and benefits in jurisdictions including Hong Kong, Thailand and Mexico. Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Group recognizes liabilities for potential tax audit issues based on estimates of whether additional taxes will be due.
 
Deferred tax liabilities of $2.1 million (2015 - $3.2 million, 2014 - $1.9 million) on assessable temporary differences have been recognized on undistributed earnings of $20.9 million (2015 - $32.3 million, 2014 - $19.0 million). There are undistributed earnings of $52.1 million (2015 - $48.5 million, 2014 - $38.6 million) which, if paid out as dividends, would be subject to tax in the hands of the recipient. An assessable temporary difference exists, but no deferred tax liability has been recognized on such undistributed earnings as the parent entity is able to control the timing of the distributions from the subsidiaries and it is not expected to distribute these profits in the foreseeable future. The undistributed earnings will be permanently reinvested. The tax impact if such earnings were distributed would be $5.2 million (2015 - $2.5 million, 2014 - $2.0 million).
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
11                         Property, plant and equipment

 	 	Land and
buildings	 	Fixtures
and fittings	 	Computer
equipment	 	Motor
vehicles	 	Assets
under
construction	 	Total	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2013	 	83.7	 	22.7	 	15.4	 	1.3	 	7.6	 	130.7	 	
Acquisitions through business combinations	 	2.9	 	0.7	 	0.1	 	0.0	 	—	 	3.7	 	
Additions	 	12.5	 	11.3	 	9.2	 	0.8	 	28.0	 	61.8	 	
Disposals	 	(1.3	)	(0.9	)	(2.0	)	(0.0	)	—	 	(4.2	)	
Transfers	 	9.5	 	—	 	—	 	—	 	(9.5	)	—	 	
Effect of movements in foreign exchange	 	(0.5	)	(0.4	)	—	 	0.0	 	(0.0	)	(0.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2014	 	106.8	 	33.4	 	22.7	 	2.1	 	26.1	 	191.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2014	 	106.8	 	33.4	 	22.7	 	2.1	 	26.1	 	191.1	 	
Acquisitions through business combinations	 	263.2	 	12.0	 	6.4	 	1.9	 	25.9	 	309.4	 	
Additions	 	14.3	 	15.8	 	11.2	 	1.4	 	16.7	 	59.4	 	
Disposals	 	(0.9	)	(0.4	)	(2.2	)	(0.6	)	(0.0	)	(4.1	)	
Transfers	 	23.1	 	(0.3	)	1.0	 	0.1	 	(23.9	)	—	 	
Effect of movements in foreign exchange	 	(7.3	)	(2.4	)	(1.7	)	(0.3	)	(0.8	)	(12.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2015	 	399.2	 	58.1	 	37.4	 	4.6	 	44.0	 	543.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2015	 	399.2	 	58.1	 	37.4	 	4.6	 	44.0	 	543.3	 	
Additions	 	39.6	 	11.4	 	11.8	 	0.8	 	29.5	 	93.1	 	
Disposals	 	(196.8	)	(4.9	)	(4.1	)	(0.2	)	—	 	(206.0	)	
Assets held for sale	 	(10.3	)	—	 	—	 	—	 	—	 	(10.3	)	
Transfers	 	46.3	 	3.6	 	2.3	 	—	 	(52.2	)	—	 	
Effect of movements in foreign exchange	 	(5.0	)	(0.3	)	(0.3	)	—	 	(0.5	)	(6.1	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2016	 	273.0	 	67.9	 	47.1	 	5.2	 	20.8	 	414.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accumulated depreciation and impairment	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2013	 	16.8	 	8.4	 	6.6	 	0.7	 	—	 	32.5	 	
Depreciation charge for the year	 	11.7	 	5.8	 	5.6	 	0.3	 	—	 	23.4	 	
Disposals	 	(1.2	)	(0.9	)	(2.0	)	0.0	 	—	 	(4.1	)	
Transfers	 	0.0	 	—	 	—	 	0.0	 	—	 	0.0	 	
Effect of movements in foreign exchange	 	(0.4	)	(0.3	)	(0.1	)	0.0	 	—	 	(0.8	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2014	 	26.9	 	13.0	 	10.1	 	1.0	 	—	 	51.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2014	 	26.9	 	13.0	 	10.1	 	1.0	 	—	 	51.0	 	
Depreciation charge for the year	 	16.5	 	9.4	 	7.9	 	0.8	 	—	 	34.6	 	
Disposals	 	(0.8	)	(0.3	)	(1.7	)	(0.5	)	—	 	(3.3	)	
Transfers	 	—	 	—	 	—	 	—	 	—	 	—	 	
Effect of movements in foreign exchange	 	(2.6	)	(0.3	)	(0.9	)	(0.1	)	—	 	(3.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2015	 	40.0	 	21.8	 	15.4	 	1.2	 	—	 	78.4	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
11                         Property, plant and equipment (continued)

 	 	Land and
buildings	 	Fixtures
and fittings	 	Computer
equipment	 	Motor
vehicles	 	Assets
under
construction	 	Total	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accumulated depreciation and impairment	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2015	 	40.0	 	21.8	 	15.4	 	1.2	 	—	 	78.4	 	
Depreciation charge for the year	 	21.4	 	13.4	 	10.6	 	1.1	 	—	 	46.5	 	
Disposals	 	(28.9	)	(3.9	)	(3.9	)	(0.2	)	—	 	(36.9	)	
Assets held for sale	 	(2.0	)	—	 	—	 	—	 	—	 	(2.0	)	
Transfers	 	(0.0	)	—	 	—	 	—	 	—	 	(0.0	)	
Effect of movements in foreign exchange	 	(0.5	)	(0.0	)	(0.0	)	(0.0	)	—	 	(0.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2016	 	30.0	 	31.3	 	22.1	 	2.1	 	—	 	85.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net book value	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At August 31, 2014	 	79.9	 	20.4	 	12.6	 	1.1	 	26.1	 	140.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At August 31, 2015	 	359.2	 	36.3	 	22.0	 	3.4	 	44.0	 	464.9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At August 31, 2016	 	243.0	 	36.6	 	25.0	 	3.1	 	20.8	 	328.5	 	
 
The Group completed the sale and leaseback of Windermere Preparatory School on April 1, 2016 and the properties of North Broward Preparatory School and The Village School on May 31, 2016. The total sale price was $167.0 million and the total net book value was $167.2 million, resulting in a loss of $0.2 million. There were also transaction costs of $3.6 million which have been recognized in exceptional costs. The sales and leaseback transaction involves an operating lease and the loss from the sale has been recognized immediately.
 
Land and buildings and motor vehicles includes the following amounts where the Group is a lessee under a finance lease:

 	 	2014	 	2015	 	2016	 	2014	 	2015	 	2016	 	2014	 	2015	 	2016	 	
 	 	Land and buildings	 	Motor vehicles	 	Computer equipment	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost-capitalized finance lease	 	—	 	47.5	 	65.4	 	0.0	 	1.2	 	1.2	 	0.0	 	0.1	 	0.1	 	
Accumulated depreciation	 	—	 	(3.0	)	(3.5	)	(0.0	)	(0.2	)	(0.4	)	(0.0	)	(0.0	)	(0.1	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At August 31,	 	—	 	44.5	 	61.9	 	0.0	 	1.0	 	0.8	 	0.0	 	0.1	 	0.0	 	
 
The Group leases buildings under non-cancellable finance lease agreements. The lease terms are between 4 and 90 years, and risks and rewards of the assets lies within the Group.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
12                         Assets held for sale

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Land and buildings	 	—	 	—	 	8.3	 	
 	 	 	 	 	 	 	 	
 	 	—	 	—	 	8.3	 	
 
In August 2016, the Group decided to sell the 14.5 acres of land (including all structures) at 4211 Watonga Blvd, Houston, Texas which was originally acquired for the British School of Houston. A sale and purchase agreement was signed subsequent to the year end for a sale price of $9.7 million, subject to due diligence.
 
The asset is presented within current assets.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
13                         Intangible assets

 	 	Goodwill	 	Brand
name	 	Customer
relations	 	Contracts	 	Website &
Intellectual
property	 	Computer
software	 	Total	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cost	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2013	 	687.7	 	56.4	 	71.9	 	0.6	 	2.6	 	2.0	 	821.2	 	
Acquisitions through business combinations	 	7.1	 	14.9	 	20.0	 	—	 	—	 	—	 	42.0	 	
Additions	 	—	 	—	 	—	 	—	 	0.4	 	0.3	 	0.7	 	
Disposals and adjustments *	 	—	 	—	 	—	 	—	 	—	 	(0.2	)	(0.2	)	
Impairment	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
Effect of movements in foreign exchange	 	1.6	 	0.5	 	0.6	 	—	 	0.0	 	—	 	2.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2014	 	696.4	 	71.8	 	92.5	 	0.6	 	3.0	 	2.1	 	866.4	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2014	 	696.4	 	71.8	 	92.5	 	0.6	 	3.0	 	2.1	 	866.4	 	
Acquisitions through business combinations	 	443.9	 	152.7	 	68.9	 	—	 	—	 	0.5	 	666.0	 	
Additions	 	—	 	—	 	—	 	—	 	0.3	 	1.7	 	2.0	 	
Disposals and adjustments *	 	—	 	—	 	—	 	—	 	—	 	(1.0	)	(1.0	)	
Impairment	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
Effect of movements in foreign exchange	 	(39.4	)	(5.6	)	(6.5	)	—	 	(0.2	)	(0.0	)	(51.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2015	 	1,100.9	 	218.9	 	154.9	 	0.6	 	3.1	 	3.3	 	1,481.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2015	 	1,100.9	 	218.9	 	154.9	 	0.6	 	3.1	 	3.3	 	1,481.7	 	
Acquisitions through business combinations	 	1.4	 	—	 	2.1	 	—	 	—	 	—	 	3.5	 	
Additions	 	—	 	—	 	—	 	—	 	0.3	 	1.3	 	1.6	 	
Disposals and adjustments *	 	—	 	—	 	—	 	(0.6	)	—	 	(0.1	)	(0.7	)	
Impairment	 	—	 	(1.0	)	—	 	—	 	—	 	—	 	(1.0	)	
Effect of movements in foreign exchange	 	(25.2	)	(2.2	)	(0.2	)	—	 	(0.5	)	0.2	 	(27.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2016	 	1,077.1	 	215.7	 	156.8	 	—	 	2.9	 	4.7	 	1,457.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accumulated amortization and impairment	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2013	 	46.7	 	0.3	 	8.7	 	0.5	 	0.2	 	0.9	 	57.3	 	
Amortization for the year	 	—	 	0.8	 	7.9	 	0.1	 	1.0	 	0.6	 	10.4	 	
Disposals and adjustments *	 	—	 	—	 	—	 	—	 	—	 	(0.2	)	(0.2	)	
Impairment	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
Effect of movements in foreign exchange	 	2.6	 	—	 	0.0	 	—	 	—	 	—	 	2.6	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2014	 	49.3	 	1.1	 	16.6	 	0.6	 	1.2	 	1.3	 	70.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2014	 	49.3	 	1.1	 	16.6	 	0.6	 	1.2	 	1.3	 	70.1	 	
Amortization for the year	 	—	 	1.3	 	11.0	 	—	 	0.9	 	0.7	 	13.9	 	
Disposals and adjustments *	 	—	 	—	 	—	 	—	 	—	 	(1.0	)	(1.0	)	
Impairment	 	—	 	—	 	—	 	—	 	—	 	—	 	—	 	
Effect of movements in foreign exchange	 	(2.9	)	(0.1	)	(0.7	)	—	 	(0.1	)	0.0	 	(3.8	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2015	 	46.4	 	2.3	 	26.9	 	0.6	 	2.0	 	1.0	 	79.2	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
13                         Intangible assets (continued)

 	 	Goodwill	 	Brand
name	 	Customer
relations	 	Contracts	 	Website &
Intellectual
property	 	Computer
software	 	Total	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Accumulated amortization and impairment	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2015	 	46.4	 	2.3	 	26.9	 	0.6	 	2.0	 	1.0	 	79.2	 	
Amortization for the year	 	—	 	2.8	 	13.8	 	—	 	0.8	 	1.3	 	18.7	 	
Disposals and adjustments *	 	—	 	—	 	—	 	(0.6	)	—	 	(0.0	)	(0.6	)	
Impairment	 	—	 	(0.0	)	—	 	—	 	—	 	—	 	(0.0	)	
Effect of movements in foreign exchange	 	(5.3	)	(0.0	)	(0.1	)	—	 	(0.4	)	0.3	 	(5.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2016	 	41.1	 	5.1	 	40.6	 	—	 	2.4	 	2.6	 	91.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net book value	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At August 31, 2014	 	647.1	 	70.7	 	75.9	 	0.0	 	1.8	 	0.8	 	796.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At August 31, 2015	 	1,054.5	 	216.6	 	128.0	 	0.0	 	1.1	 	2.3	 	1,402.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At August 31, 2016	 	1,036.0	 	210.6	 	116.2	 	—	 	0.5	 	2.1	 	1,365.4	 	

* Fully amortized assets were reviewed during the year and certain assets that were no longer in use have been adjusted for, reducing cost and accumulated depreciation by $0.6 million (2015 - $nil, 2014 - $nil).
 
A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Goodwill by CGU is allocated into the premium school level and is monitored and tested for impairment at this level by management.
 
The recoverable amount of a CGU is determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a five-year period discounted using pre-tax discount rates. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate for the education industry in which the CGU operates.
 
The key assumptions used for value-in-use calculations in 2014 were as follows:

 	 	Carrying Value of
Goodwill
$m	 	Pupil Growth
(Year 1 to 5)	 	Discount Rate	 	Long-Term
Growth Rate
(Average)	 	
 	 	 	 	 	 	 	 	 	 	
China	 	278.9	 	11.2	%	16.2% - 18.1%	 	2.0	%	
Western Europe	 	91.5	 	19.0	%	10.4% - 13.5%	 	1.5	%	
Eastern Europe	 	51.2	 	19.0	%	11.6% - 12.8%	 	1.5	%	
Qatar	 	32.1	 	28.3	%	14.0%	 	2.0	%	
Thailand	 	21.0	 	28.3	%	15.2%	 	2.0	%	
Other — Southeast Asia	 	6.7	 	28.3	%	14.9% - 19.5%	 	2.0	%	
North America	 	158.9	 	63.8	%	13.7% - 15.5%	 	1.5	%	
Learning Services	 	6.8	 	n/a	 	13.1%	 	—	 	
 	 	 	 	 	 	 	 	 	 	
 	 	647.1	 	 	 	 	 	 	 	
 
The 2014 discount rates were revised in the August 31, 2015 financial statements to correct an error.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
13                         Intangible assets (continued)
 
The key assumptions used for value-in-use calculations in 2015 are as follows:

 	 	Carrying Value of
Goodwill
$m	 	Pupil Growth
(Year 1 to 5)	 	Discount Rate	 	Long-Term
Growth Rate
(Average)	 	
 	 	 	 	 	 	 	 	 	 	
China	 	313.6	 	40.7	%	16.2% - 18.1%	 	2.3	%	
Western Europe	 	238.7	 	24.4	%	10.4% - 13.5%	 	1.5	%	
Eastern Europe	 	43.9	 	13.7	%	11.6% - 12.8%	 	1.5	%	
Qatar	 	32.0	 	0.0	%	14.0%	 	2.0	%	
Thailand	 	18.7	 	13.9	%	15.2%	 	2.0	%	
Vietnam	 	129.7	 	50.6	%	22.4% - 23.3%	 	4.0	%	
Other — Southeast Asia	 	7.0	 	32.1	%	14.9% - 19.5%	 	2.0	%	
North America	 	264.6	 	30.8	%	13.7% - 15.5%	 	2.2	%	
Learning Services	 	6.3	 	n/a	 	13.1%	 	1.0	%	
 	 	 	 	 	 	 	 	 	 	
 	 	1,054.5	 	 	 	 	 	 	 	
 
The key assumptions used for value-in-use calculations in 2016 are as follows:

 	 	Carrying Value of
Goodwill
$m	 	Pupil Growth
(Year 1 to 5)	 	Discount Rate	 	Long-Term
Growth Rate
(Average)	 	
 	 	 	 	 	 	 	 	 	 	
China	 	299.4	 	28.9	%	13.9% - 14.6%	 	2.3	%	
Western Europe	 	235.5	 	36.8	%	9.5% - 14.8%	 	0.9	%	
Eastern Europe	 	43.2	 	26.0	%	12.0% - 14.1%	 	1.5	%	
Qatar	 	32.5	 	1.9	%	13.8% - 14.4%	 	4.7	%	
Thailand	 	19.4	 	11.7	%	13.4%	 	1.6	%	
Vietnam	 	130.5	 	26.4	%	21.4% - 22.3%	 	3.8	%	
Other — Southeast Asia	 	7.0	 	26.2	%	11.8% - 24.0%	 	1.9	%	
North America	 	263.1	 	19.6	%	10.9% - 12.5%	 	2.0	%	
Learning Services	 	5.4	 	n/a	 	10.8%	 	1.7	%	
 	 	 	 	 	 	 	 	 	 	
 	 	1,036.0	 	 	 	 	 	 	 	
 
The value-in-use calculations are most sensitive to the following assumptions:
 
·                       Full Time Equivalent students (“FTEs”)
·                       EBITDA margins
·                       Discount rates
·                       Growth rate estimates
 
FTEs — FTEs are based on budgeted numbers and extrapolated based on expected future growth and historical performance. The Group defines a FTE as a student who is enrolled to attend school for the full school day, five days a week. For example, a student who enrols for three days a week equals 0.6 FTEs and a student who enrols for five mornings a week equals 0.5 FTEs. The assumptions for FTEs are disclosed above as pupil growth percentages from year 1 to 5.
 
EBITDA margins — EBITDA margins are based on average values achieved in similar schools in the region. Forecasted EBITDA margins are not specifically disclosed due to sensitivity of the information. However, EBITDA is mainly driven by FTEs which are disclosed above as pupil growth percentages from year 1 to 5.
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
13                         Intangible assets (continued)
 
Discount rates — Discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation is based on the specific circumstances of the Group and its CGUs and is derived from its weighted average cost of capital (“WACC”). The WACC takes into account both debt and equity. As a result of the acquisitions, the initial public offering and further diversification of the geographical location of CGUs management have reassessed the underlying inputs to the calculation of the discount rates to be applied to the individual CGUs. The cost of equity is derived from the expected return on investment by the Group’s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service which has changed year on year. Segment-specific risk is incorporated by applying individual beta factors. The beta factors are evaluated annually based on publicly available market data. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate.
 
Growth rate estimates — Rates are based on industry research and disclosed above as long-term growth rates.
 
2014
 
When applying the updated discount rates in the 2014 value-in-use calculation, there remains sufficient headroom as compared to carrying value.
 
2015
 
Upon management’s annual impairment review on goodwill and indefinite life intangible assets, a school in Western Europe has displayed potential indicators of impairment. A sensitivity analysis has been performed on the value-in-use calculation.
 
Specific assumptions used
 
The following assumptions were used in the value-in-use calculation for the school in Western Europe:

 	 	Current assumptions	 	Revised assumptions*	 	Decrease on
headroom ($m)	 	
 	 	 	 	 	 	 	 	
Cumulative FTE growth (year 1 to 5)	 	17.0	%	15.0	%	1.9	 	
Discount rates	 	10.6	%	11.6	%	4.7	 	
Growth rate estimates	 	1.50	%	0.75	%	2.8	 	
Intangible assets at risk	 	$	37.3 million	 	 	 	 	 	
Headroom	 	$	6.9 million	 	 	 	 	 	

* Represents revised assumptions after a reasonable possible shift.
 
Sensitivity to the changes in assumptions
 
The implications of the key assumptions for the recoverable amount are discussed below:
 
·                                         FTEs — Management has considered the possibility of lower than forecast increases of FTEs. This may occur if Management’s recruitment efforts fail to increase enrolment or replace departing students. Additionally, if Management fails to maintain the Group’s quality of education, parents may choose not to re-enrol their children in the schools. A reduction of FTEs by 6.2% every year from 2017 to 2020 would result in impairment.
 
·                                         EBITDA margins — the main driver for EBITDA is FTEs. Revenue is mainly generated from tuition fees and variable costs are mainly driven by the amount of resources necessary to provide education to the enrolled students. The impact of a possible decline is modelled through the reduction of FTEs discussed above.
 
·                                         Discount rates — the discount rate calculation is based on the specific circumstances of the CGUs and is derived from its WACC (as described above) of the individual CGU. 10.6% represents the discount rate of the Western Europe school at risk, this rate is at the low end of the WACC range within Western Europe due to the CGU and country specific debt and equity characteristics. A rise in the pre-tax discount rate to 12.2% would result in impairment.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
13                         Intangible assets (continued)
 
2015 (continued)
 
Sensitivity to the changes in assumptions (continued)
 
·                                         Growth rate assumptions — the effect of new entrants is not expected to have an adverse impact on the forecasts due to the long established history and brand of the schools. A reduction by 2.1% in the long term growth rates would result in impairment.
 
2016
 
Upon management’s annual impairment review on goodwill and indefinite life intangible assets, a school in Western Europe and a school in Eastern Europe have displayed potential indicators of impairment. A sensitivity analysis has been performed on the value-in-use calculations.
 
Specific assumptions used
 
The following table sets out the assumptions that were used in the value-in-use calculation for the two schools, as well as the impact on headroom should the assumptions change:

 	 	School #1 (Western Europe)	 	School #2 (Eastern Europe)	 	
 	 	Current
assumptions	 	Revised
Assumptions*	 	Decrease
on
headroom
($m)	 	Current
assumptions	 	Revised
Assumptions*	 	Decrease
on
headroom
($m)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cumulative FTE growth (year 1 to 5)	 	31.7	%	30.7	%	1.8	 	63.3	%	58.3	%	1.6	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Discount rate	 	10.1	%	11.1	%	4.2	 	12.6	%	13.6	%	1.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Terminal growth rate	 	0.8	%	0.4	%	1.8	 	1.6	%	0.8	%	0.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Intangible assets at risk	 	$	39.5 million	 	 	 	 	 	$	8.7 million	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Headroom	 	$	6.0 million	 	 	 	 	 	$	4.2 million	 	 	 	 	 	

* Represents revised assumptions after a reasonable possible shift.
 
Sensitivity to the changes in assumptions
 
The implications of the key assumptions for the recoverable amount are discussed below:
 
·                                         FTEs - for School #1, a reduction of FTEs by 2.5% every year from 2018 to 2021 would result in impairment. For School #2, a reduction of FTEs by 8.1% every year from 2018 to 2021 would result in impairment.
 
·                                         EBITDA margins — the main driver for EBITDA is FTEs. Revenue is mainly generated from tuition fees and variable costs are mainly driven by the amount of resources necessary to provide education to the enrolled students. The impact of a possible decline is modelled through the reduction of FTEs discussed above.
 
·                                         Discount rates - for School #1, a rise in the pre-tax discount rate to 11.6% would result in impairment. For School #2, a rise in the pre-tax discount rate to 18.5% would result in impairment.
 
·                                         Growth rate assumptions - for School #1, a reduction by 1.5% in the long term growth rates would result in impairment. For School #2, a reduction by 5.6% in the long term growth rates would result in impairment.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
13                         Intangible assets (continued)
 
Individual intangible assets other than goodwill that are considered to be material to the Group are as follows :

 	 	 	 	Brand Names	 	
 	 	 	 	2014	 	2015	 	2016	 	
CGU	 	 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
British School of Guangzhou	 	China	 	4.0	 	3.8	 	3.5	 	
Léman International School — Chengdu	 	China	 	—	 	11.5	 	10.7	 	
Collège Beau-Soleil*	 	Western Europe	 	13.3	 	12.7	 	12.5	 	
Collège Champittet*	 	Western Europe	 	6.3	 	5.9	 	5.8	 	
International College Spain	 	Western Europe	 	3.3	 	2.8	 	2.7	 	
Collège du Léman*	 	Western Europe	 	—	 	60.2	 	59.0	 	
Compass International School Doha	 	Qatar	 	3.9	 	3.9	 	3.8	 	
The Regent’s International School	 	Thailand	 	5.0	 	4.4	 	4.5	 	
Dover Court Preparatory School	 	Other — Southeast Asia	 	7.2	 	6.3	 	6.4	 	
Northbridge International School	 	Other — Southeast Asia	 	7.7	 	7.5	 	7.4	 	
British International School of Boston	 	North America	 	3.4	 	3.4	 	3.3	 	
British School of Chicago	 	North America	 	5.0	 	4.9	 	4.8	 	
British International School of Houston	 	North America	 	4.6	 	4.5	 	4.4	 	
British School of Washington	 	North America	 	3.4	 	3.4	 	3.3	 	
San Roberto International School	 	North America	 	—	 	5.1	 	4.5	 	
The Village School	 	North America	 	—	 	25.8	 	25.4	 	
North Broward Preparatory School	 	North America	 	—	 	29.7	 	29.1	 	
Windermere Preparatory School	 	North America	 	—	 	17.6	 	17.3	 	
Other	 	 	 	3.6	 	3.2	 	2.2	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	70.7	 	216.6	 	210.6	 	

* Indefinite useful life intangible assets. Impairment testing is completed as part of the impairment testing above for goodwill.
 
In the year ended August 31, 2016 , an impairment of $1.0 million (2015 — $nil, 2014 - $nil) has been recorded in the profit and loss in relation to a brand name, as the usage of the name has been discontinued.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
14            Subsidiaries
 
As at August 31, 2016, the Group had the following interests in subsidiaries:

 	 	Country of	 	Class of	 	Percentage of Ownership	 	
 	 	Incorporation	 	shares held	 	2014	 	2015	 	2016	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Holding companies	 	 	 	 	 	 	 	 	 	 	 	
Nord Anglia Education Finance LLC +dS	 	USA	 	n/a	 	100	%	100	%	100	%	
Nord Anglia Education (UK) Holdings PLC +dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
 	 	 	 	Deferred	 	 	 	 	 	 	 	
Nord Anglia Education Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
NAE Hong Kong Limited* dSG	 	Hong Kong	 	Ordinary	 	100	%	100	%	100	%	
Nord Anglia Education Development Services Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
Nord Anglia Middle East Holding S.P.C*	 	Bahrain	 	n/a	 	100	%	100	%	100	%	
Nord International Schools Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
EEE Enterprise Limited* dSG	 	BVI	 	Ordinary	 	100	%	100	%	100	%	
Rice Education Hong Kong Limited* dSG	 	Hong Kong	 	Ordinary	 	100	%	100	%	100	%	
Regent Pattaya Campus Management Co., Ltd. SH	 	Thailand	 	Ordinary	 	49	%	49	%	49	%	
Saint Andrews International School Sukhumvit Campus Co., Ltd. SH	 	Thailand	 	Preference	 	49	%	49	%	49	%	
NA Educational Services Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
NA Schools Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
WCL HoldCo Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
WCL Group Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
WCL Intermediate Holdings Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
WCL Services Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
WCL School Management Services Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
British Schools of America, LLC* SG	 	USA	 	n/a	 	100	%	100	%	100	%	
BST Holding, L.L.C.* SG	 	USA	 	n/a	 	100	%	100	%	100	%	
British Schools of Texas, L.L.C.* SG	 	USA	 	n/a	 	100	%	100	%	100	%	
WCL Intermediate Holdings Spain, S.L.U (dissolved)* SG	 	Spain	 	n/a	 	100	%	100	%	n/a	#	
International College 2, S.L.U (dissolved)* SG	 	Spain	 	n/a	 	100	%	100	%	n/a	#	
British International School Foundation* dG	 	Hungary	 	n/a	 	100	%	100	%	100	%	
British International School Bratislava, s.r.o. ^ S	 	Slovakia	 	n/a	 	100	%	100	%	100	%	
BSG Limited* dSG	 	Hong Kong	 	Ordinary	 	100	%	100	%	100	%	
Guangzhou Yingkai Investment & Consulting Co., Ltd.*	 	China	 	n/a	 	100	%	100	%	100	%	
Uma Education Holdings Limited* dGS	 	BVI	 	Ordinary	 	100	%	100	%	100	%	
Uma Education Hong Kong Limited* dGS	 	Hong Kong	 	Ordinary	 	100	%	100	%	100	%	
WCL EBT Limited *	 	UK	 	Ordinary	 	100	%	100	%	100	%	
Nord Anglia (Beijing) Consulting Limited *	 	China	 	n/a	 	100	%	100	%	100	%	
KG Investments Limited ^	 	Jersey	 	n/a	 	100	%	100	%	100	%	
KG (Beijing) Investment Consultant Co., Ltd. *	 	China	 	n/a	 	100	%	100	%	100	%	
Neptune Education Holdings Limited *	 	Hong Kong	 	Ordinary	 	100	%	100	%	100	%	
Nord Anglia School (Hong Kong) Limited *	 	Hong Kong	 	n/a	 	100	%	100	%	100	%	
诺地安格（上海）商务信息咨询有限公司 *	 	China	 	n/a	 	100	%	100	%	100	%	
BIS Ltd *SG	 	BVI	 	Ordinary	 	n/a	 	100	%	100	%	
Oasis Development Management Limited SG	 	BVI	 	Ordinary	 	n/a	 	96.2	%	96.2	%	
The British International School Company Limited	 	Vietnam	 	n/a	 	n/a	 	90	%	90	%	
Thien Huong Investment Company Limited	 	Vietnam	 	Investment	 	n/a	 	90	%	90	%	
Thien Huong Education Joint Stock Company	 	Vietnam	 	Charter	 	n/a	 	81	%	81	%	
NAE HK Holdings Limited +SG	 	Hong Kong	 	Ordinary	 	n/a	 	100	%	100	%	
Viking Holdco, Inc. *dSG	 	USA	 	n/a	 	n/a	 	100	%	100	%	
Viking Holding Company, LLC ^dSG	 	USA	 	n/a	 	n/a	 	100	%	100	%	
Viking C Corporation (formerly Sterling International Schools C Corporation) *dSG	 	USA	 	n/a	 	n/a	 	100	%	100	%	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
14           Subsidiaries (continued)

 	 	Country of	 	Class of	 	Percentage of Ownership	 	
 	 	Incorporation	 	shares held	 	2014	 	2015	 	2016	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Meritas MX, LLC* dSG	 	USA	 	n/a	 	n/a	 	100	%	100	%	
Meritas MX II, LLC*	 	USA	 	n/a	 	n/a	 	100	%	100	%	
Meritas Luxembourg Holdings SARL* SG	 	Luxembourg	 	Ordinary	 	n/a	 	100	%	100	%	
Meritas (Gibraltar) Holdings Limited* SG	 	Gibraltar	 	Ordinary	 	n/a	 	100	%	100	%	
Meritas CH Sarl* dSG	 	Swizterland	 	Ordinary	 	n/a	 	100	%	100	%	
Meritas Malta Holdings Limited ^ SG	 	Malta	 	Ordinary	 	n/a	 	100	%	100	%	
Meritas Mexico, S. de R.L. de C.V ^ SG	 	Mexico	 	n/a	 	n/a	 	100	%	100	%	
NAE (Chengdu Holdings) Ltd. (formerly Sterling International Schools)* SG	 	Cayman Islands	 	Ordinary	 	n/a	 	100	%	100	%	
NAE Chengdu Holdings Limited (formerly Sterling Asian Schools Holdings Limited)* SG	 	Hong Kong	 	Ordinary	 	n/a	 	100	%	100	%	
Chengdu Sterling Educational Consulting Ltd.*	 	China	 	n/a	 	n/a	 	100	%	100	%	
Shanghai Nord Anglia Investment Consulting Co., Ltd.*	 	China	 	n/a	 	n/a	 	n/a	 	100	%	
Shanghai Yingdi Business Consultancy Company Limited I	 	China	 	n/a	 	n/a	 	n/a	 	n/a	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Premium Schools	 	 	 	 	 	 	 	 	 	 	 	
English International School Prague, s.r.o. ^ S	 	Czech Republic	 	n/a	 	100	%	100	%	100	%	
British International School Kindergarten, Primary and Secondary School *	 	Hungary	 	n/a	 	100	%	100	%	100	%	
The British School Sp. Z o.o.* dSG	 	Poland	 	n/a	 	100	%	100	%	100	%	
The British International School, Shanghai*	 	China	 	n/a	 	100	%	100	%	100	%	
British School of Beijing*	 	China	 	n/a	 	100	%	100	%	100	%	
Collège Champittet SA* dSG	 	Switzerland	 	n/a	 	100	%	100	%	100	%	
Collège Alpin Beau-Soleil SA* dSG	 	Switzerland	 	n/a	 	100	%	100	%	100	%	
La Côte International School SA* dSG	 	Switzerland	 	n/a	 	100	%	100	%	100	%	
The Regent’s School H	 	Thailand	 	n/a	 	49	%	49	%	49	%	
British School of Washington, L.L.C.* SG	 	USA	 	n/a	 	100	%	100	%	100	%	
British School of Boston, L.L.C.* SG	 	USA	 	n/a	 	100	%	100	%	100	%	
British International School	 	Vietnam	 	n/a	 	n/a	 	90	%	90	%	
British Vietnamese International School Royal	 	Vietnam	 	n/a	 	n/a	 	90	%	90	%	
British International School — Hanoi	 	Vietnam	 	n/a	 	n/a	 	90	%	90	%	
The British Vietnamese International School (Kindergarten), The British Vietnamese International School (Primary), The British Vietnamese International School (Secondary and High School)	 	Vietnam	 	n/a	 	n/a	 	81	%	81	%	
Collegiate Prep Realty, LLC* dSG	 	USA	 	n/a	 	n/a	 	100	%	100	%	
Village Real Estate, LLC* dSG	 	USA	 	n/a	 	n/a	 	100	%	100	%	
North Broward Preparatory Schools, LLC* dSG	 	USA	 	n/a	 	n/a	 	100	%	100	%	
College du Léman, SARL* dSG	 	Switzerland	 	Ordinary	 	n/a	 	100	%	100	%	
Instituto de Desarrollo Educacion y Aprendizaje, S.C. ^	 	Mexico	 	n/a	 	n/a	 	100	%	100	%	
The Léman International School — Chengdu*	 	China	 	n/a	 	n/a	 	100	%	100	%	
Camplife, Ltd.	 	USA	 	n/a	 	n/a	 	50.5	%	50.5	%	
British School of Chicago, L.L.C.* SG	 	USA	 	n/a	 	100	%	100	%	100	%	
British School of Houston, L.P.^ SG	 	USA	 	n/a	 	100	%	100	%	100	%	
International College Spain, S.A.U.* SG	 	Spain	 	n/a	 	100	%	100	%	100	%	
Education Overseas Qatar LLC GH	 	Qatar	 	n/a	 	49	%	49	%	49	%	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
14           Subsidiaries (continued)

 	 	Country of	 	Class of	 	Percentage of Ownership	 	
 	 	Incorporation	 	shares held	 	2014	 	2015	 	2016	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Sukromna spojena skola British International School Bratislava*	 	Slovakia	 	n/a	 	100	%	100	%	100	%	
Northbridge International School (Cambodia) Limited*	 	Cambodia	 	n/a	 	100	%	100	%	100	%	
British American School of Charlotte, L.L.C.* GS	 	USA	 	n/a	 	100	%	100	%	100	%	
WCL Academy of New York LLC* GS	 	USA	 	n/a	 	100	%	100	%	100	%	
St. Andrews International School Bangkok (Sukhumvit) H	 	Thailand	 	n/a	 	49	%	49	%	49	%	
British School of Guangzhou*	 	China	 	n/a	 	100	%	100	%	100	%	
Dover Court International School (Pte.) Ltd.* dSG	 	Singapore	 	Ordinary	 	100	%	100	%	100	%	
Nord Anglia International School, Hong Kong Limited *	 	Hong Kong	 	n/a	 	100	%	100	%	100	%	
British International School LLC GH	 	Abu Dhabi, UAE	 	n/a	 	n/a	 	49	%	49	%	
Saturn Education Holdings Limited*	 	Abu Dhabi Global Market, UAE	 	n/a	 	n/a	 	n/a	 	100	%	
Nord Anglia International School L.L.C GH	 	Dubai, UAE	 	n/a	 	n/a	 	49	%	49	%	
Nord Anglia Chinese International School Shanghai I	 	China	 	n/a	 	n/a	 	n/a	 	n/a	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Learning Services	 	 	 	 	 	 	 	 	 	 	 	
Nord Anglia Vocational Education and Training Services Ltd* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
Brighton Education Learning Services Sdn. Bhd.*	 	Malaysia	 	n/a	 	100	%	100	%	100	%	
Nord Anglia Education Sdn. Bhd.*	 	Malaysia	 	n/a	 	100	%	100	%	100	%	
BSA Resource Solutions, LLC SG	 	USA	 	n/a	 	50	%	50	%	50	%	
Fieldwork Education Limited* dSG	 	UK	 	Ordinary	 	100	%	100	%	100	%	
WCL School Management Services (India) Limited*	 	UK	 	Ordinary	 	100	%	100	%	100	%	
Overseas Schools SA *	 	Belgium	 	n/a	 	100	%	100	%	100	%	
Nord Anglia Educational Consultancies Saudi Arabia Limited ^	 	Saudi Arabia	 	n/a	 	100	%	100	%	100	%	

* Investment held indirectly by 100% owned subsidiary of the Group.
 
^  Investments held 100% within the Group by more than one subsidiary of the Group
 
+ The Companies denoted are direct subsidiaries of the Group
 
d Material assets of subsidiary form part of security arrangement for borrowings (see Note 19)
 
S Share capital of subsidiary is pledged as security for borrowings (see Note 19)
 
G Subsidiary is a guarantor under the security arrangement for borrowings (see Note 19)
 
H The Group holds interests of less than 50% of certain companies. Where indicated, these companies are consolidated by the Group due to the majority of the economic interests in these companies in the form of both the right to receive dividends and the right to full distribution on liquidation and majority of voting rights.
 
I The Group does not own any equity interest in Shanghai Yingdi Business Consultancy Company Limited and Nord Anglia Chinese International School Shanghai. The Group controls and operates these two companies through contractual arrangements, effective 2016.
 
#  In September 2015, the Group completed two successive reverse mergers whereby WCL Intermediate Holdings Spain, S.L.U. and International College 2, S.L.U. were respectively merged with their subsidiary entity, International College Spain, S.A.U. As a result of the two reverse mergers, WCL Intermediate Holdings Spain, S.L.U. and International College 2, S.L.U. were dissolved and all their assets and liabilities were passed to International College Spain, S.A.U. as the surviving entity.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
14                                   Subsidiaries (continued)
 
The total non-controlling interest for the year is $5.4 million (2015 - $4.4 million, 2014 - $0.5). The Directors have assessed that the non-controlling interests of British International School, Vietnam; British Vietnamese International School Royal, Vietnam; British International School — Hanoi; The British Vietnamese International School (Kindergarten), The British Vietnamese International School (Primary), The British Vietnamese International School (Secondary and High School) and Camplife Limited are immaterial to the Group’s financial position and financial performance for separate disclosure of the underlying business financial performance, financial position and cash flow in accordance with IFRS 12 — Disclosure of interests in other entities.
 
Investments in joint ventures and associates
 
The amounts recognized in the Consolidated Balance Sheet are as follows:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Associates	 	—	 	—	 	—	 	
Joint ventures	 	0.5	 	0.5	 	0.5	 	
 	 	 	 	 	 	 	 	
Total	 	0.5	 	0.5	 	0.5	 	
 
Set out below are the joint ventures and associates of the Group as at August 31, 2016.

Name of entity	 	Place of business	 	Associate / Joint
Venture?	 	% of ownership
interest	 	Measurement
method	 	
 	 	 	 	 	 	 	 	 	 	
Léman Manhattan Preparatory School LLC	 	United States	 	Associate	 	10	%	Equity	 	
EduAction (Waltham Forest) Limited	 	UK	 	Joint Venture	 	50	%	Equity	 	
 
The associate and joint venture had no contingent liabilities or capital commitments as at August 31, 2016 and 2015. Léman Manhattan Preparatory School LLC requires the parent’s consent to distribute its profits, as the associate is in a loss making position the parent does not foresee such distributions at the reporting date. EduAction (Waltham Forest) Limited cannot distribute its profits without the consent from the two venture partners.
 
In the opinion of the Directors, the above joint venture and associate are not material to the Group and as such no summarized financial information for Léman Manhattan Preparatory School LLC and EduAction (Waltham Forest) Limited is disclosed.
 
Structured entity
 
To comply with People’s Republic of China (“PRC”) foreign investment laws governing education provided by schools such as Nord Anglia Chinese International School Shanghai (“NACIS”) that teach local Chinese students, the Group and NACIS have entered into a series of contractual arrangements which allow the Group to direct the activities that most significantly affect the economic performance of NACIS and to receive the economic benefits of NACIS. Such contractual arrangements include the following:
 
Exclusive cooperation agreement
 
Under this agreement, one of the Group’s subsidiaries has the exclusive right to provide to NACIS various business management and support services (e.g. procurement of premises, marketing and public relations, curriculum design and development and human resources). This agreement provides that separate service agreements will be entered into between the service provider and NACIS to determine the details of each service including the scope and the fee, which provides a framework for the Group to obtain the economic benefits from NACIS. The sponsor of NACIS, Shanghai Yingdi Business Consultancy Company Limited (“Yingdi”), is ultimately owned by a PRC individual who is an independent third party to the Group (the “Yingdi Shareholder”). Yingdi and the Yingdi Shareholder jointly and severally guarantee the performance of this agreement by NACIS. This agreement is effective until terminated by the parties mutually or by the subsidiary unilaterally.
 
Equity interest pledge agreement
 
Under this agreement, the Yingdi Shareholder has pledged all his equity interest in Yingdi to the subsidiary to secure the fulfilment of his obligations under, among other things, the exclusive cooperation agreement. Additionally, the Yingdi Shareholder agrees not to transfer or dispose of his equity interest in Yingdi, and not to mortgage such equity interest except at the request and direction of the pledgee. The agreement is effective until the later of the Yingdi Shareholder ceasing to be the equity interest holder of Yingdi, or the fulfilment of the Yingdi Shareholder’s obligations which are the subject of the pledge.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
14                                   Subsidiaries (continued)
 
Structured entity (continued)
 
Guarantee agreement
 
Pursuant to this agreement, Yingdi and the Yingdi Shareholder guarantee that all the contracts between NACIS and the subsidiary, including the exclusive cooperation agreement and the specific service agreements contemplated under the exclusive cooperation agreement, shall be duly performed.
 
Power of attorney
 
The Yingdi Shareholder has executed a power of attorney in favour of the subsidiary to exercise his rights in respect of his equity interest in Yingdi. In addition, Yingdi has executed a power of attorney in favour of the subsidiary to exercise Yingdi’s rights as the founder and owner of NACIS.
 
Service agreement
 
In accordance with the exclusive cooperation agreement, the Group’s subsidiary and NACIS have entered into a service agreement whereby the Group’s subsidiary provides to NACIS various services.
 
As a result of the above arrangements NACIS has been consolidated within the Group.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
15                                   Deferred tax assets and liabilities
 
The analysis of Deferred tax assets and Deferred tax liabilities is as follows:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Deferred tax assets:	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
-     Deferred tax assets to be recovered after more than 12 months	 	21.7	 	72.1	 	73.5	 	
-     Deferred tax asset to be recovered within 12 months	 	3.4	 	5.4	 	5.5	 	
 	 	 	 	 	 	 	 	
 	 	25.1	 	77.5	 	79.0	 	
 	 	 	 	 	 	 	 	
 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Deferred tax liabilities:	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
-     Deferred tax liability to be recovered after more than 12 months	 	(45.0	)	(116.0	)	(99.5	)	
-     Deferred tax liability to be recovered within 12 months	 	(2.6	)	(8.3	)	(10.7	)	
 	 	 	 	 	 	 	 	
 	 	(47.6	)	(124.3	)	(110.2	)	
 	 	 	 	 	 	 	 	
Deferred tax liabilities (net)	 	(22.5	)	(46.8	)	(31.2	)	
 
Deferred tax assets and liabilities are attributable to the following:

 	 	Assets	 	Liabilities	 	
 	 	2014	 	2015	 	2016	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	0.3	 	0.2	 	0.5	 	(6.6	)	(16.9	)	(11.0	)	
Intangible assets	 	—	 	—	 	—	 	(33.3	)	(88.0	)	(83.2	)	
Employee benefits - pension	 	1.6	 	5.7	 	10.6	 	—	 	—	 	—	 	
Tax value of loss carry-forwards	 	5.6	 	47.8	 	38.1	 	—	 	—	 	—	 	
Provisions and accruals	 	13.3	 	16.7	 	21.8	 	(4.2	)	(12.5	)	(9.3	)	
Derivatives	 	4.3	 	7.1	 	8.0	 	(3.5	)	(6.9	)	(6.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Tax assets / (liabilities)	 	25.1	 	77.5	 	79.0	 	(47.6	)	(124.3	)	(110.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net tax liabilities	 	—	 	—	 	—	 	(22.5	)	(46.8	)	(31.2	)	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
15                                   Deferred tax assets and liabilities (continued)
 
Movement in deferred tax is as follows:

 	 	September 1,
2013	 	Recognized in
income
statement	 	Recognized in
comprehensive
income	 	Foreign
exchange
movements	 	Acquired in
business
combination	 	August 31,
2014	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
`	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	(6.2	)	—	 	—	 	(0.1	)	—	 	(6.3	)	
Intangible assets	 	(25.6	)	(1.2	)	—	 	(0.1	)	(6.4	)	(33.3	)	
Employee benefits - pension	 	1.4	 	0.1	 	0.2	 	(0.1	)	—	 	1.6	 	
Tax value of loss carry-forwards	 	5.2	 	0.4	 	—	 	—	 	—	 	5.6	 	
Provisions and accruals	 	13.8	 	(4.5	)	—	 	(0.2	)	—	 	9.1	 	
Derivatives	 	—	 	0.7	 	—	 	0.1	 	—	 	0.8	 	
Goodwill	 	(1.0	)	1.1	 	—	 	(0.1	)	—	 	—	 	
Other	 	(1.7	)	1.8	 	—	 	(0.1	)	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	(14.1	)	(1.6	)	0.2	 	(0.6	)	(6.4	)	(22.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	September 1,
2014	 	Recognized
in profit/(loss)	 	Recognized in
comprehensive
income/(loss)	 	Foreign
exchange
movements	 	Acquired in
business
combination	 	August 31,
2015	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	(6.3	)	2.5	 	—	 	(0.3	)	(12.6	)	(16.7	)	
Intangible assets	 	(33.3	)	3.8	 	—	 	1.7	 	(60.2	)	(88.0	)	
Employee benefits - pension	 	1.6	 	0.4	 	0.9	 	(1.0	)	3.8	 	5.7	 	
Tax value of loss carry-forwards	 	5.6	 	5.9	 	—	 	—	 	36.3	 	47.8	 	
Provisions and accruals	 	9.1	 	(2.4	)	—	 	(0.6	)	(1.9	)	4.2	 	
Derivatives	 	0.8	 	(0.5	)	—	 	(0.1	)	—	 	0.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	(22.5	)	9.7	 	0.9	 	(0.3	)	(34.6	)	(46.8	)	

 	 	September 1,
2015	 	Recognized
in
profit/(loss)	 	Recognized in
comprehensive
income/(loss)	 	Recognized
in pre-
acquisition
reserve	 	Foreign
exchange
movements	 	Acquired in
business
combination	 	August 31,
2016	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property, plant and equipment	 	(16.7	)	6.1	 	—	 	—	 	0.1	 	—	 	(10.5	)	
Intangible assets	 	(88.0	)	5.2	 	—	 	—	 	0.1	 	(0.5	)	(83.2	)	
Employee benefits - pension	 	5.7	 	1.3	 	3.3	 	—	 	0.3	 	—	 	10.6	 	
Tax value of loss carry-forwards	 	47.8	 	(9.8	)	—	 	—	 	0.1	 	—	 	38.1	 	
Provisions and accruals	 	4.2	 	13.4	 	—	 	(5.9	)	0.8	 	—	 	12.5	 	
Derivatives	 	0.2	 	1.1	 	—	 	—	 	—	 	—	 	1.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	(46.8	)	17.3	 	3.3	 	(5.9	)	1.4	 	(0.5	)	(31.2	)	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
16                                   Trade and other receivables

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Current	 	 	 	 	 	 	 	
Trade receivables	 	74.3	 	99.1	 	98.9	 	
Less: Provision for impairment of trade receivables (see Note 25)	 	(4.7	)	(6.6	)	(5.4	)	
 	 	 	 	 	 	 	 	
Net trade receivables (see Note 25b)	 	69.6	 	92.5	 	93.5	 	
 	 	 	 	 	 	 	 	
Prepayments	 	13.2	 	25.3	 	29.0	 	
Accrued income	 	3.8	 	0.2	 	0.2	 	
Other receivables	 	5.8	 	8.8	 	9.8	 	
 	 	 	 	 	 	 	 	
 	 	92.4	 	126.8	 	132.5	 	
 	 	 	 	 	 	 	 	
Prepayments mainly relate to rental prepayments on school sites of the Premium Schools.	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Non-current	 	 	 	 	 	 	 	
Other receivables	 	9.2	 	37.4	 	42.0	 	
 
In 2015 and 2016, non-current receivables mainly relate to rental prepayments on Premium School sites in Vietnam and China which is not recoverable for at least 12 months from this date.
 
17                                   Cash and cash equivalents

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Cash and cash equivalents (excluding bank overdraft)	 	256.4	 	316.6	 	371.9	 	
 
Please refer to Note 25b and 25c for the detailed analysis of cash and cash equivalents on credit risk and liquidity risk, respectively.
 
18                                   Inventories

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Inventories — at cost	 	2.4	 	4.5	 	4.3	 	
 
Inventories are mainly made up of school uniforms in the Premium Schools.
 
(i) Assigning costs to inventories
 
The costs of individual items of inventory are determined using actual cost.
 
(ii) Amounts recognized in profit or loss
 
Inventories recognized as an expense during the year ended August 31, 2016 amounted to $1.7 million (2015 - $1.4 million, 2014 - $1.2 million). These were included in Cost of sales as shown in the Consolidated Income Statement.
 
There were no write-downs of Inventories during the year ended August 31, 2016.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
19                                   Interest-bearing loans and borrowings
 
This note provides information about the contractual terms of the Group and Company’s interest-bearing loans and borrowings, which are measured at amortized cost. For more information about the Group’s exposure to interest rate and foreign currency risk, see Note 25.

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	
Bank overdraft	 	90.2	 	90.7	 	—	 	
5.75% senior secured notes	 	—	 	1.1	 	0.3	 	
Current portion of secured bank loans	 	20.0	 	0.2	 	—	 	
Current portion of term loan due 2021	 	3.2	 	6.3	 	4.7	 	
 	 	 	 	 	 	 	 	
 	 	113.4	 	98.3	 	5.0	 	
 	 	 	 	 	 	 	 	
Non-current liabilities	 	 	 	 	 	 	 	
5.75% senior secured notes	 	—	 	199.8	 	196.4	 	
Term loan due 2021	 	499.2	 	866.5	 	861.8	 	
 	 	 	 	 	 	 	 	
 	 	499.2	 	1,066.3	 	1,058.2	 	
 
All borrowings are secured by fixed and floating charges over all the current and future assets of certain Group entities. The Group subsidiaries which are party to this arrangement are detailed in Note 14, along with details of certain Group entities whose share capital has also been pledged as part of the security arrangement, including the assignment of certain insurances.

 	 	Terms and debt repayment
schedule	 	Face	 	Carrying	 	Face	 	Carrying	 	Face	 	Carrying	 	
 	 	Currency	 	Nominal
interest
rate	 	Year of
maturity	 	value
2014
$m	 	amount
2014
$m	 	value
2015
$m	 	amount
2015
$m	 	value
2016
$m	 	amount
2016
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bank overdraft	 	US $	 	 	 	 	 	90.2	 	90.2	 	90.7	 	90.7	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
5.75% senior secured notes ^	 	CHF	 	5.75	%	2022	 	—	 	—	 	208.1	 	200.9	 	203.5	 	196.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Term loan *	 	US $	 	4.50% - 5.00	%	2021	 	513.7	 	502.4	 	897.2	 	872.8	 	888.1	 	866.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revolving credit facility #	 	US $	 	4.75	%	2021	 	20.0	 	20.0	 	—	 	0.2	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	623.9	 	612.6	 	1,196.0	 	1,164.6	 	1,091.6	 	1,063.2	 	
 
The Group has provided bank guarantees which are offset against the revolving credit facility (see Note 28). As at August 31, 2016, the Group had available but undrawn borrowing facilities of $ 117.4 million (2015 - $114.4 million, 2014 - $44.0 million).
 
Face value is the nominal amount of debt at issuance whereas the carrying value also deducts the upfront prepaid costs.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
19                         Interest-bearing loans and borrowings (continued)

* The term loan is a floating rate loan. Changes in interest rates have minimal impact on fair value since loans reprice to the market frequently and on that basis, fair value is assumed to equal carrying value. The term loan facility bears interest based on applicable margin percentages of 3.00% per annum for base rate loans and 4.00% per annum for LIBOR rate loans, provided that the base rate for base rate loans may not be lower than 2.00% and LIBOR may not be lower than 1.00%.
 
# Revolving credit facility under the credit agreement will bear interest based on a margin ranging from 2.75% to 3.25% depending on our net-leverage ratio, plus the applicable LIBOR rate.
 
^ The 5.75% senior secured notes are a fixed rate Swiss bond and the fair value is derived from quoted prices (unadjusted) in active markets for these financial liabilities.
 
All interest is settled by cash payments on the required date .
 
On March 31, 2014, the Group entered into a new credit agreement for a $515.0 million term loan facility and a $75.0 million revolving credit facility. The borrower under the credit agreement is a newly formed 100% wholly owned U.S. domestic limited liability company. On the same date, the Group drew down the term loan facility in full and using proceeds from the loan and our initial public offering, the Group discharged its obligations under the indentures governing the $490.0 million 10.25% senior secured notes and $150.0 million 8.50%/9.50% PIK toggle notes, both of which were redeemed fully as of April 14, 2014.
 
On March 31, 2014, the Group also repaid and terminated its previous super senior revolving facility using proceeds from the initial public offering (see Note 4).
 
On March 2, 2015, the Group drew down an additional $150.0 million on the term loan facility.
 
On June 25, 2015, the Group further drew down on additional $240.0 million on the term loan facility and issued CHF 200 million 5.75% senior secured notes.
 
Maturity of the Group’s borrowings are as follows:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Less than one year	 	113.4	 	98.3	 	5.0	 	
Between one and five years	 	13.4	 	859.8	 	1,058.2	 	
More than five years	 	485.8	 	206.5	 	—	 	
 	 	 	 	 	 	 	 	
 	 	612.6	 	1,164.6	 	1,063.2	 	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
20                                   Finance lease liabilities
 
Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Gross finance lease liabilities — minimum lease payments:	 	 	 	 	 	 	 	
No later than one year	 	0.0	 	3.7	 	4.8	 	
Later than one year and no later than five years	 	—	 	11.9	 	17.6	 	
Later than five years	 	—	 	194.7	 	221.5	 	
 	 	 	 	 	 	 	 	
 	 	0.0	 	210.3	 	243.9	 	
Future finance charges on finance lease liabilities	 	(0.0	)	(161.5	)	(179.4	)	
 	 	 	 	 	 	 	 	
Present value of finance lease liabilities	 	0.0	 	48.8	 	64.5	 	
 	 	 	 	 	 	 	 	
Present value of finance lease liabilities:	 	 	 	 	 	 	 	
No later than one year	 	0.0	 	0.8	 	1.2	 	
Later than one year and no later than five years	 	—	 	1.0	 	1.9	 	
Later than five years	 	—	 	47.0	 	61.4	 	
 	 	 	 	 	 	 	 	
 	 	0.0	 	48.8	 	64.5	 	
 
The difference between the minimum lease payments and the present value of the finance lease liabilities are due to the long duration of the most significant lease (74 years remaining). Additions in the year include a change of an operating lease to a finance lease in a Premium School in Hungary amounting to $17.0 million.
 
21                                   Trade and other payables

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Current	 	 	 	 	 	 	 	
Trade payables due to third parties	 	12.4	 	31.3	 	28.4	 	
Other taxes and social security	 	3.1	 	3.1	 	4.0	 	
Amounts owed to related parties	 	0.2	 	0.2	 	0.2	 	
Other payables	 	21.3	 	51.3	 	49.9	 	
Contingent consideration (see Note 2)	 	—	 	25.0	 	—	 	
Deferred consideration	 	2.0	 	21.6	 	17.0	 	
Accrued expenses	 	24.7	 	38.2	 	40.8	 	
 	 	 	 	 	 	 	 	
 	 	63.7	 	170.7	 	140.3	 	
 	 	 	 	 	 	 	 	
Other payables mainly relate to student deposits which are repayable on demand.	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	
Non-current	 	 	 	 	 	 	 	
Other payables	 	47.7	 	18.8	 	18.5	 	
Accrued expenses	 	—	 	15.5	 	22.4	 	
Deferred consideration	 	3.0	 	15.3	 	8.2	 	
 	 	 	 	 	 	 	 	
 	 	50.7	 	49.6	 	49.1	 	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
21            Trade and other payables (Continued)
 
Non-current accrued expenses mainly relate to rental accruals on school sites which is not payable for at least 12 months from this date.
 
22            Employee benefits
 
Pension plans
 
The Group operates a variety of post-employment benefit arrangements, covering both funded defined contribution and funded and unfunded defined benefit schemes. The most significant of these are the funded defined benefit pension schemes for the Group’s employees in the UK and Switzerland.
 
Defined contribution plans
 
The Group operates a number of defined contribution pension plans. The total expense relating to these plans in the current year was $3.4 million (2015 - $2.1 million, 2014 - $1.2 million), recognized in the Consolidated Income Statement.
 
Defined benefit plans
 
United Kingdom
 
The Group operates three defined benefit pension schemes in the UK. In each case the assets of the scheme are held as a segregated fund and administered by Trustees.
 
A defined benefit scheme was established for Lifetime Careers employees (employed by a Group subsidiary) - (“Lifetime”). Contributions are determined by independent professionally qualified actuaries on the basis of triennial valuations. JLT Benefit Solutions Limited, an independent actuary, carried out the latest triennial actuarial assessment of the scheme as at August 31, 2016, using the projected unit method.
 
Both the Nord Anglia Joint Pension Scheme (“Joint”) and The Wyburn School Limited Pension and Life Assurance Scheme (1985) (“Wyburn”) are closed schemes and are valued under the projected unit method. The most recent formal actuarial valuation for both of the schemes were performed at August 31, 2016 using the aggregate method which assess the adequacy of the fund to meet the minimum funding requirement and calculates contributions on the level of pensionable payroll to provide the retirement benefits for the members.
 
Actuarial valuation reports have been requested by the Group for both the Nord Anglia Joint Pension Scheme and The Wyburn School Limited Pension and Life Assurance Scheme (1985). Given the underlying size of these schemes (1% of the consolidated pension assets and liabilities); any movement as a result of changes reported in the actuarial valuation would not be regarded as significant.
 
Closure of schemes
 
At August 31, 2011, all three schemes closed to future accruals and active members became deferred pension members. Whilst the Group will continue to make future employer contributions to the schemes, member contributions will no longer be made.
 
Other
 
The most significant other schemes are the funded defined benefit schemes which operate in Switzerland. An independent actuary, using the projected unit method, carried out the latest actuarial assessment of the Swiss schemes as at August 31, 2016. In addition to this, there is one arising from College du Léman SARL due to the acquisition in 2015. Another defined benefit scheme is operated in Thailand.
 
The valuations used for IAS 19R have been based on the most recent actuarial valuations and updated to take account of the requirements of IAS 19R in order to assess the liabilities of the scheme as at August 31, 2016. The details of the IAS 19R valuations are set out in the following tables:
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
22            Employee benefits (continued)
 
Pension plans (continued)
 
Principal assumptions
 
The major assumptions, on a weighted average basis, used by the actuaries were as follows:

 	 	UK	 	Switzerland	 	
 	 	2014
%	 	2015
%	 	2016
%	 	2014
%	 	2015
%	 	2016
%	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Discount rate	 	4.20	 	3.90	 	2.08	 	1.80	 	0.83	 	0.40	 	
Price inflation	 	3.40	 	3.50	 	3.20	 	1.50	 	0.78	 	0.50 - 1.00	 	
Rate of increase in salaries	 	n/a	 	n/a	 	n/a	 	1.00	 	1.30	 	0.50	 	
Rate of increase in pension payments	 	3.40	 	3.50	 	3.20	 	n/a	 	0.00	 	0.00	 	
 
Mortality assumptions
 
The assumptions relating to longevity underlying the UK and Swiss pension liabilities at the reporting date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. The following table illustrates the expectation of life of an average member retiring at age 65 at the reporting date.

 	 	 	 	UK	 	Switzerland	 	
 	 	 	 	2014
years	 	2015
years	 	2016
years	 	2014
years	 	2015
years	 	2016
years	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Retiring at reporting date at age 65:	 	Male	 	22.2	 	23.0	 	22.7	 	21.3	 	21.5	 	22.3	 	
 	 	Female	 	22.4	 	24.9	 	24.7	 	23.8	 	24.0	 	24.3	 	
Retiring 20 years after the end of the reporting period:	 	Male	 	23.5	 	24.3	 	24.1	 	23.1	 	23.2	 	24.2	 	
 	 	Female	 	26.0	 	26.4	 	26.2	 	25.6	 	25.7	 	26.2	 	
 
The sensitivity in terms of basis points (“bps”) of the defined benefit obligation to changes in the weighted principal assumption is:

 	 	UK	 	Switzerland	 	
Change in obligation	 	Increase in
assumption by
25bps	 	Decrease in
assumption by
25bps	 	Increase in
assumption by
25bps	 	Decrease in
assumption by
25bps	 	
 	 	 	 	 	 	 	 	 	 	
Discount rate	 	Decrease by 590bps	 	Increase by 590bps	 	Decrease by 340bps	 	Increase by 360bps	 	
Inflation	 	Increase by 570bps	 	Decrease by 570bps	 	Increase by 10bps	 	Decrease by 10bps	 	
 	 	 	 	 	 	 	 	 	 	
 	 	Increase by 1 year
in assumption	 	Decrease by 1 year
in assumption	 	Increase by 1 year
in assumption	 	Decrease by 1 year
in assumption	 	
 	 	 	 	 	 	 	 	 	 	
Life expectancy	 	Increase by 380bps	 	Decrease by 380bps	 	Increase by 180bps	 	Decrease by 180bps	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
22            Employee benefits (continued)
 
Rates of return on scheme assets
 
The fair value of the assets in the defined benefit pension schemes are as follows:

 	 	UK	 	Switzerland	 	
 	 	2014
$m	 	2015
$m	 	2016
$m	 	2014
$m	 	2015
$m	 	2016
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equities	 	28.0	 	15.4	 	5.6	 	—	 	15.3	 	14.1	 	
Diversified Growth Assets	 	11.3	 	11.1	 	15.1	 	—	 	9.4	 	12.5	 	
Corporate bonds	 	1.3	 	9.5	 	1.9	 	—	 	15.5	 	13.1	 	
Cash	 	2.2	 	4.2	 	3.3	 	—	 	0.0	 	1.6	 	
With profit funds	 	0.8	 	2.4	 	1.5	 	—	 	5.0	 	5.0	 	
Liability driven investments	 	—	 	—	 	22.3	 	—	 	—	 	—	 	
Insurance assets	 	—	 	0.4	 	1.1	 	22.8	 	24.4	 	27.6	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	43.6	 	43.0	 	50.8	 	22.8	 	69.6	 	73.9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Actual return on plan assets	 	4.3	 	1.6	 	12.0	 	0.9	 	0.4	 	1.0	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
22            Employee benefits (continued)
 
Movement in pension deficit during the financial year
 
Changes in the fair value of defined benefit pension assets are as follows:

 	 	UK	 	Switzerland	 	
 	 	2014
$m	 	2015
$m	 	2016
$m	 	2014
$m	 	2015
$m	 	2016
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Opening fair value of the defined benefit pension assets	 	35.2	 	43.6	 	43.0	 	21.1	 	22.8	 	69.6	 	
Business combination (see Note 2)	 	—	 	—	 	—	 	—	 	49.5	 	1.6	 	
Interest income	 	1.9	 	1.7	 	1.6	 	0.5	 	0.5	 	0.6	 	
Administrative expenses	 	—	 	—	 	—	 	—	 	—	 	(0.2	)	
Return on plan assets greater than discount rate	 	2.4	 	(0.0	)	11.4	 	0.4	 	(0.9	)	0.8	 	
Contributions by employer	 	3.1	 	3.1	 	3.4	 	1.5	 	2.3	 	4.5	 	
Contributions by members	 	—	 	—	 	—	 	1.2	 	1.8	 	3.6	 	
Benefits paid	 	(1.6	)	(2.2	)	(1.2	)	(2.4	)	(4.0	)	(5.2	)	
Foreign currency translation	 	2.6	 	(3.2	)	(7.4	)	0.5	 	(2.4	)	(1.4	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Closing fair value of defined benefit pension assets	 	43.6	 	43.0	 	50.8	 	22.8	 	69.6	 	73.9	 	
 
Changes in the fair value of defined benefit pension obligation are as follows:

 	 	UK	 	Switzerland	 	
 	 	2014
$m	 	2015
$m	 	2016
$m	 	2014
$m	 	2015
$m	 	2016
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Opening defined benefit pension obligation	 	(51.1	)	(62.2	)	(64.8	)	(27.4	)	(29.9	)	(94.3	)	
Business combination (see Note 2)	 	—	 	—	 	—	 	—	 	(63.3	)	(2.4	)	
Current service cost	 	—	 	—	 	—	 	(1.9	)	(2.9	)	(5.1	)	
Past service cost	 	—	 	—	 	—	 	0.1	 	0.6	 	—	 	
Interest cost	 	(2.6	)	(2.3	)	(2.3	)	(0.7	)	(0.6	)	(0.7	)	
Actuarial losses	 	(6.4	)	(7.1	)	(18.2	)	(1.5	)	(3.3	)	(1.2	)	
Contributions by members	 	—	 	—	 	—	 	(1.2	)	(1.8	)	(3.6	)	
Benefits paid	 	1.6	 	2.2	 	1.2	 	2.4	 	4.0	 	5.2	 	
Foreign currency translation	 	(3.7	)	4.6	 	10.9	 	0.3	 	2.9	 	1.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Closing fair value of defined benefit pension assets	 	(62.2	)	(64.8	)	(73.2	)	(29.9	)	(94.3	)	(100.3	)	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
22            Employee benefits (continued)
 
Movement in pension deficit during the financial year (continued)
 
The amounts that have been charged to the Consolidated Income Statement and Consolidated Statement of Comprehensive Income/(Loss) for the three years ended August 31, 2016 are set out below:

 	 	UK	 	Switzerland	 	
 	 	2014
$m	 	2015
$m	 	2016
$m	 	2014
$m	 	2015
$m	 	2016
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Analysis of the amount charged to Operating profit/(loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	
Current service cost	 	—	 	—	 	—	 	(1.9	)	(2.9	)	(5.1	)	
Past service cost	 	n/a	 	n/a	 	n/a	 	0.1	 	0.6	 	0.0	 	
Administrative expenses	 	—	 	—	 	—	 	—	 	—	 	(0.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Analysis of the amount credited/(charged) to Finance income/(expense):	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest on defined benefit pension assets	 	1.9	 	1.7	 	1.6	 	0.5	 	0.5	 	0.6	 	
Interest on defined benefit pension obligation	 	(2.6	)	(2.3	)	(2.3	)	(0.7	)	(0.6	)	(0.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net pension finance expense	 	(0.7	)	(0.6	)	(0.7	)	(0.2	)	(0.1	)	(0.1	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total charged to the Consolidated Income Statement	 	(0.7	)	(0.6	)	(0.7	)	(2.0	)	(2.4	)	(5.4	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Analysis of the amount recognized in the Consolidated Statement of Comprehensive Income/(Loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	
Re-measurement gains/(losses):	 	 	 	 	 	 	 	 	 	 	 	 	 	
-        Actuarial changes arising from changes in demographic assumptions	 	—	 	(0.9	)	0.9	 	—	 	—	 	1.2	 	
-        Actuarial changes arising from changes in financial assumptions	 	(6.4	)	(5.5	)	(20.7	)	(1.2	)	(2.7	)	(2.9	)	
-        Experience adjustments	 	—	 	(0.7	)	1.6	 	(0.3	)	(0.6	)	0.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	(6.4	)	(7.1	)	(18.2	)	(1.5	)	(3.3	)	(1.2	)	
Return on plan asset excluding interest income	 	2.4	 	(0.0	)	11.4	 	0.4	 	(0.9	)	0.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total losses recognized in the Consolidated Statement of Comprehensive Income/(Loss)	 	(4.0	)	(7.1	)	(6.8	)	(1.1	)	(4.2	)	(0.4	)	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
22            Employee benefits (continued)
 
Movement in pension deficit during the financial year (continued)
 
The cumulative losses recognized through the Consolidated Statement of Comprehensive Income/(Loss) since the date of transition to IFRS (September 1, 2009) are UK: $20.8 million (2015 - $14.0 million, 2014 - $6.9 million); and since the date of acquisition - Switzerland: $7.6 million (2015 - $7.2 million, 2014 - $3.0 million).
 
Summary of movements in the deficit during the financial year

 	 	UK	 	Switzerland	 	
 	 	2014
$m	 	2015
$m	 	2016
$m	 	2014
$m	 	2015
$m	 	2016
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deficit in schemes at the beginning of the year	 	(15.9	)	(18.6	)	(21.8	)	(6.3	)	(7.1	)	(24.7	)	
Business combination	 	—	 	—	 	—	 	—	 	(13.8	)	(0.8	)	
Current service cost	 	—	 	—	 	—	 	(1.9	)	(2.9	)	(5.1	)	
Past service cost	 	—	 	—	 	—	 	0.1	 	0.6	 	—	 	
Administrative expenses	 	—	 	—	 	—	 	—	 	—	 	(0.2	)	
Net pension finance expense	 	(0.7	)	(0.6	)	(0.7	)	(0.2	)	(0.1	)	(0.1	)	
Return on plan asset, excluding amount included in interest expense	 	2.4	 	(0.0	)	11.4	 	0.4	 	(0.9	)	0.8	 	
Contributions by employer	 	3.1	 	3.1	 	3.4	 	1.5	 	2.3	 	4.5	 	
Foreign currency translation	 	(1.1	)	1.4	 	3.5	 	0.8	 	0.5	 	0.4	 	
Actuarial losses	 	(6.4	)	(7.1	)	(18.2	)	(1.5	)	(3.3	)	(1.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Deficit in schemes at the end of the year net of deferred tax	 	(18.6	)	(21.8	)	(22.4	)	(7.1	)	(24.7	)	(26.4	)	
 
History of movements
 
The historical movement in defined benefit pension schemes’ assets and liabilities are as follows:

 	 	2012
$m	 	2013
$m	 	2014
$m	 	2015
$m	 	2016
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Closing fair value of defined benefit pension assets	 	50.6	 	56.3	 	66.4	 	112.6	 	124.7	 	
Present value of liabilities	 	(81.0	)	(78.5	)	(92.2	)	(159.1	)	(173.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	
Pension deficit	 	(30.4	)	(22.2	)	(25.8	)	(46.5	)	(48.8	)	
 
Deficit in the Thailand pension scheme amounted to $0.1 million (2015 - $0.1 million, 2014 - $0.1 million).
 
Expected contributions
 
A funding plan in respect of the Lifetime scheme has been agreed with the trustees for the period from September 2013 to 2020. An amount of $3.1 million was paid in September 2016 (September 2015 - $3.5 million, September 2014 - $2.9 million).
 
The Group expects to make normal cash contributions of approximately $7.2 million (2015 - $7.9 million, 2014 - $4.7 million) to defined benefit schemes in the financial year ending August 31, 2017.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
22            Employee benefits (continued)
 
Share-based payments
 
2014 Equity Incentive Award Plan
 
Share options are granted to Directors and selected employees. The exercise price of the granted options is equal to the market price of the shares on the date of the grant. Options are conditional on the employee remaining in employment during the vesting period. The 1 st  allocation of options were exercisable in January 2015 and options thereafter are exercisable on the anniversary of the grant.
 
Under the 2014 Equity Incentive Award Plan (“2014 Incentive Plan”), 9,800,000 of our ordinary shares have been reserved for issuance pursuant to a variety of share-based compensation awards that may be awarded under the 2014 Incentive Plan. The maximum number of our ordinary shares that may be subject to one or more awards granted to any person pursuant to the 2014 Incentive Plan during any calendar year will be 1,200,000 and the maximum amount that may be paid in cash to any one person during any calendar year with respect to one or more awards payable in cash shall be $10.0 million. However, no non-employee Director will be granted awards pursuant to the 2014 Incentive Plan with an aggregate value in excess of $5.0 million during any fiscal year.
 
None of the awards vested in the period.
 
A fair value for the shares issued was calculated using the Black-Scholes Option Pricing Model incorporating the following assumption s; the terms and conditions of the grants are as follows:

 	 	Issued 2014	 	Issued 2015	 	Issued 2016	 	
 	 	 	 	 	 	 	 	
Exercise price	 	$	18.00	 	$	19.57	 	$	20.87	 	
Equity price	 	$	18.00	 	$	19.57	 	$	20.87	 	
Volatility	 	33.63	%	35.50	%	32%/28%	*	
Dividend yield	 	0	%	0	%	0	%	
Risk free interest rate	 	1.79	%	1.41	%	1.75	%	
Expected life to exercise	 	6.25 years	 	6.25 years	 	6.25 years	 	
Number of shares awarded	 	451,100	 	519,400	 	773,400	 	

* 32% for 1 year and 28% thereafter
 
The fair value of each share was calculated as $6.17-7.26 ( 2015 - $7.28, 2014 - $6.55).
 
The table below summarizes the options granted under the plan:

 	 	2014	 	2015	 	2016	 	
 	 	Average
exercise
price per
share option
$	 	Share
options
(thousands)	 	Average
exercise
price per
share option
$	 	Share
options
(thousands)	 	Average
exercise
price per
share option
$	 	Share
options
(thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At September 1	 	—	 	—	 	18.09	 	448.7	 	18.90	 	918.4	 	
Granted	 	18.09	 	448.7	 	19.57	 	519.4	 	20.77	 	773.4	 	
Forfeited	 	—	 	—	 	18.50	 	41.5	 	19.60	 	252.7	 	
Exercised *	 	—	 	—	 	18.00	 	8.2	 	18.55	 	27.9	 	
Expired	 	—	 	—	 	—	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
At August 31,	 	18.09	 	448.7	 	18.90	 	918.4	 	19.79	 	1,411.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Vested and exercisable at August 31,	 	—	 	—	 	18.09	 	97.4	 	18.66	 	254.9	 	

* The weighted average share price at the date of exercise of options exercised during the year ended August 31, 2016 was $20.88 (2015 – $21.20, 2014 – not applicable).
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
22            Employee benefits (continued)
 
Share-based payments (continued)
 
No options expired during the period covered by the above tables.
 
Share options outstanding at the end of the year have the following expiry date and exercise prices:

 	 	 	 	 	 	Share options	 	
Grant date	 	Expiry
date	 	Exercise
price ($)	 	2014
(thousands)	 	2015
(thousands)	 	2016
(thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	
May 30, 2014	 	May 30, 2024	 	18.00	 	425.6	 	389.2	 	307.0	 	
July 14,2014	 	May 30, 2024	 	19.58	 	23.1	 	23.1	 	23.1	 	
January 9, 2015	 	January 8, 2025	 	19.57	 	—	 	506.1	 	390.1	 	
September 24, 2015	 	September 24, 2025	 	20.77	 	—	 	—	 	691.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	448.7	 	918.4	 	1,411.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average remaining contractual life of options outstanding at end of period	 	 	 	 	 	9.8 years	 	9.1 years	 	8.5 years	 	
 
2016 Performance Stock Units
 
Share options are granted to Directors and selected employees. The exercise price of the granted options is equal to the market price of the shares on the date of the grant. Options are conditional on the performance and share price of the company and employee remaining in employment during the vesting period. Market performance conditions are not disclosed due to sensitivity.
 
None of the awards vested in the period.
 
A fair value for the shares issued was calculated using the Black-Scholes Option Pricing Model incorporating the following assumption s; the terms and conditions of the grants are as follows:

 	 	Issued 2016	 	
 	 	 	 	
Exercise price	 	$	20.87	 	
Equity price	 	$	20.87	 	
Volatility	 	32%/28%	*	
Dividend yield	 	0	%	
Risk free interest rate	 	1.75	%	
Expected life to exercise	 	 	 	
Number of shares awarded	 	1,140,100	 	

* 32% for 1 year and 28% thereafter
 
The fair value of each share was calculated as $5.86-20.87 ( 2015 – not applicable, 2014 – not applicable).
 
Share options outstanding at the end of the year have the following expiry date and exercise prices:

 	 	 	 	 	 	Share options	 	
Grant date	 	Expiry
date	 	Exercise
price ($)	 	2014
(thousands)	 	2015
(thousands)	 	2016
(thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	
September 24, 2015	 	Not applicable	 	20.74	 	—	 	—	 	1,030.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	—	 	—	 	1,030.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average remaining contractual life of options outstanding at end of period	 	 	 	 	 	Not applicable	 	Not applicable	 	Not applicable	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
22            Employee benefits (continued)
 
Share-based payments (continued)
 
The table below summarizes the options granted under the plan:

 	 	2016	 	
 	 	Average
exercise
price per
share option
$	 	Share
options
(thousands)	 	
 	 	 	 	 	 	
At September 1	 	—	 	—	 	
Granted	 	20.74	 	1,140.1	 	
Forfeited	 	20.87	 	109.8	 	
Exercised *	 	—	 	—	 	
Expired	 	—	 	—	 	
 	 	 	 	 	 	
At August 31,	 	20.73	 	1,030.3	 	
 	 	 	 	 	 	
Vested and exercisable at August 31,	 	—	 	—	 	

* The weighted average share price at the date of exercise of options exercised during the year ended August 31, 2016 was $nil (2015 – not applicable, 2014 – not applicable).
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
23         Provisions for other liabilities and charges

 	 	Legal	 	Other	 	Total	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Balance at September 1, 2013	 	0.7	 	5.1	 	5.8	 	
Provisions made during the year	 	—	 	0.1	 	0.1	 	
Provisions used during the year	 	(0.4	)	(3.8	)	(4.2	)	
Provisions reversed during the year	 	—	 	—	 	—	 	
Foreign exchange	 	—	 	0.0	 	0.0	 	
 	 	 	 	 	 	 	 	
Balance at August 31, 2014	 	0.3	 	1.4	 	1.7	 	
 	 	 	 	 	 	 	 	
Balance at September 1, 2014	 	0.3	 	1.4	 	1.7	 	
Provisions made during the year	 	0.8	 	0.0	 	0.8	 	
Provisions reversed during the year	 	(0.3	)	(0.5	)	(0.8	)	
 	 	 	 	 	 	 	 	
Balance at August 31, 2015	 	0.8	 	0.9	 	1.7	 	
 	 	 	 	 	 	 	 	
Balance at September 1, 2015	 	0.8	 	0.9	 	1.7	 	
Provisions made during the year	 	0.3	 	—	 	0.3	 	
Provisions used during the year	 	(0.8	)	—	 	(0.8	)	
Provisions reversed during the year	 	(0.3	)	(0.9	)	(1.2	)	
 	 	 	 	 	 	 	 	
Balance at August 31, 2016	 	—	 	(0.0	)	(0.0	)	
 	 	 	 	 	 	 	 	
Current	 	—	 	(0.0	)	(0.0	)	
Non-current	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	
 	 	—	 	(0.0	)	(0.0	)	
 
From time to time, the Group is party to litigations in various jurisdictions in which the Group operates. The Group is not engaged in nor is the Group aware of any threatened litigation which may have, or have had in the recent past, significant effects on the Group’s financial position or profitability.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
24         Capital and reserves
 
Share capital

 	 	2014	 	 	 	2015	 	 	 	2016	 	 	 	
Authorized	 	No.	 	$m	 	No.	 	$m	 	No.	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ordinary shares of $0.01 each	 	2,000,000,000	 	20.0	 	2,000,000,000	 	20.0	 	2,000,000,000	 	20.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	2,000,000,000	 	20.0	 	2,000,000,000	 	20.0	 	2,000,000,000	 	20.0	 	

 	 	2014	 	 	 	2015	 	 	 	2016	 	 	 	
Allotted, called up and fully paid	 	No.	 	$m	 	No.	 	$m	 	No.	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ordinary shares of $0.01 each	 	97,747,778	 	1.0	 	104,091,367	 	1.0	 	104,121,876	 	1.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	97,747,778	 	1.0	 	104,091,367	 	1.0	 	104,121,876	 	1.0	 	

 	 	Ordinary
shares
$m	 	Redeemable
preference
shares
$m	 	Share
premium
$m	 	
 	 	 	 	 	 	 	 	
At September 1, 2013	 	2.3	 	65.2	 	256.5	 	
Issued during the year	 	1.0	 	0.0	 	366.9	 	
Transaction cost recognized directly in equity	 	—	 	—	 	(29.6	)	
Return of capital to pre-IPO shareholders	 	—	 	—	 	4.0	 	
Forgiveness of loan	 	—	 	—	 	14.3	 	
Distribution to parent	 	—	 	—	 	(15.0	)	
Share redemption	 	(2.3	)	(65.2	)	—	 	
 	 	 	 	 	 	 	 	
At August 31, 2014	 	1.0	 	—	 	597.1	 	
 	 	 	 	 	 	 	 	
At September 1, 2014	 	1.0	 	—	 	597.1	 	
Issued during the year	 	0.0	 	—	 	148.6	 	
Transaction cost recognized directly in equity	 	—	 	—	 	(10.8	)	
Exercise share options	 	—	 	—	 	0.3	 	
 	 	 	 	 	 	 	 	
At August 31, 2015	 	1.0	 	—	 	735.2	 	
 	 	 	 	 	 	 	 	
At September 1, 2015	 	1.0	 	—	 	735.2	 	
Issued during the year	 	0.0	 	—	 	0.0	 	
Transaction cost recognized directly in equity	 	—	 	—	 	—	 	
Exercise share options	 	—	 	—	 	0.8	 	
 	 	 	 	 	 	 	 	
At August 31, 2016	 	1.0	 	—	 	736.0	 	

 	 	2014
$m	 	2015
$m	 	2016
$m	 	
 	 	 	 	 	 	 	 	
Shares classed as liabilities	 	—	 	—	 	—	 	
Shares classified in shareholders’ funds	 	1.0	 	1.0	 	1.0	 	
 	 	 	 	 	 	 	 	
Shares classified in shareholders’ funds	 	1.0	 	1.0	 	1.0	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
24         Capital and reserves (continued)
 
The holders of Ordinary shares are entitled to receive notice of, attend, speak and vote at any general meeting of the Company. The Ordinary shares are entitled to receive dividends.
 
On March 31, 2014, the Company completed its initial public offering and issued 21,850,000 ordinary shares at $16.00 per share, raising gross proceed of $349.6 million. This included shares issued pursuant to the exercise of the underwriters’ overallotment option, raising net proceeds of $320.0 million, net of offering costs. On the same day the existing 208,607,689 ordinary and preference shares were redeemed and replaced with 75,897,778 ordinary shares of the Company.
 
On March 2, 2015, 1,050,000 ordinary shares at $21.32 per share were issued as part of the purchase consideration for the acquisition of the British International Schools Group, Vietnam (see Note 2).
 
On June 25 2015, to part fund the acquisition of the Sterling International Schools C Corporation, the Company issued 5,260,000 ordinary shares at $24.00 per share, raising gross proceeds of $126.2 million to part fund the acquisition of the six schools.
 
Currency translation reserve
 
The currency translation reserve comprises all foreign exchange differences arising since September 1, 2009, the transition date to IFRSs, from the translation of the financial statements of foreign operations.
 
Other reserves
 
Other reserves relate to the capital contributions reserve created upon the settlement of loan notes issued to the parent company and senior management.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments
 
25a       Fair values of financial instruments
 
Trade and other receivables
 
The fair value of trade and other receivables, is estimated as the present value of future cash flows, discounted at the effective rate of interest at the reporting date if the effect is material.
 
Trade and other payables
 
The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at the effective rate of interest at the reporting date if the effect is material.
 
Cash and cash equivalents
 
The fair value of cash and cash equivalents is estimated as its carrying amount where the cash is repayable on demand. Where it is not repayable on demand then the fair value is estimated at the present value of future cash flows, discounted at the effective rate of interest at the reporting date.
 
Interest-bearing borrowings
 
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the effective rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to similar lease agreements.
 
Derivative financial instruments
 
The fair value of call options is determined through the use of valuation techniques which maximise observable market data as the instruments are not traded in an active market.
 
The Group uses cross currency interest rate swaps in conjunction with certain debt issuances in order to secure a fixed local currency interest rate. Under these cross currency swaps, the Group receives interest based on a floating US dollar rate and pays interest on a fixed local currency rate based on the contractual amounts in dollars and the local currency, respectively. At maturity, there is also the payment of principal amounts between currencies. The cross currency interest rate swaps are recorded on the Consolidated Balance Sheet at fair value, with changes in value reported in Other gains/(losses). The following table indicates the contractual amounts of the Group’s cross currency interest rate swaps:

 	 	 	 	 	 	Interest rates	 	Embedded foreign
currency option
(cap on final	 	
Maturing	 	Contractual amounts (m)	 	Receive	 	Pay	 	exchange upside)	 	
 	 	 	 	 	 	 	 	 	 	 	 	
August 31, 2017	 	USD	 40.0	 	CNY	 260.7	 	Floating USD LIBOR plus 3.75%	 	Fixed 6.75%	 	10	%	
August 31, 2017	 	USD	 30.0	 	EUR	 27.3	 	Floating USD LIBOR plus 3.75%	 	Fixed 2.91%	 	15	%	
August 31, 2018	 	USD	 40.0	 	CNY	 260.7	 	Floating USD LIBOR plus 3.75%	 	Fixed 7.00%	 	12.5	%	
August 31, 2018	 	USD	 30.0	 	EUR	 27.3	 	Floating USD LIBOR plus 3.75%	 	Fixed 3.20%	 	15	%	
August 31, 2019	 	USD	 40.0	 	CNY	 260.7	 	Floating USD LIBOR plus 3.75%	 	Fixed 7.25%	 	15	%	
August 31, 2019	 	USD	 30.0	 	EUR	 27.3	 	Floating USD LIBOR plus 3.75%	 	Fixed 3.46%	 	15	%	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25a       Fair values of financial instruments (continued)
 
The fair value of cross currency interest rate swaps is determined by quoted mid-market price based on actual bids and offers for positions that are quoted in an active market taking into account observable market inputs (3 months LIBOR and yield curves denominated in RMB and EUR).
 
The prior year figures have been revised to include the embedded derivatives for the Chicago and Houston operating leases with CPI multipliers (2015 - a liability of 11.1 million, 2014 - a liability of 18.6 million). Their valuation is based on inputs other than quoted prices included within level 1 that are observable either directly or indirectly and hence are classified as level 2 financial instruments. The respective fair value and liquidity risk disclosures have been corrected accordingly.
 
Fair values
 
The fair values of all financial assets and financial liabilities by class together with their carrying amounts shown in the Consolidated Balance Sheet are as follows:

 	 	Carrying
amount	 	Fair
value	 	Carrying
amount	 	Fair
value	 	Carrying
amount	 	Fair
value	 	
 	 	2014	 	2014	 	2015	 	2015	 	2016	 	2016	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loans and receivables	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents (see Note 17)	 	256.4	 	256.4	 	317.0	 	317.0	 	371.9	 	371.9	 	
Other loans and receivables	 	81.5	 	81.5	 	108.4	 	108.4	 	110.8	 	110.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total financial assets	 	337.9	 	337.9	 	425.4	 	425.4	 	482.7	 	482.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Derivative financial liabilities	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial liabilities classified at fair value through profit or loss	 	(11.1	)	(11.1	)	(21.6	)	(21.6	)	(25.2	)	(25.2	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financial liabilities measured at amortized cost	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other interest-bearing loans and borrowings (see Note 19)	 	(612.6	)	(612.6	)	(1,164.6	)	(1,176.1	)	(1,063.2	)	(1,080.1	)	
Trade and other payables	 	(111.2	)	(111.2	)	(197.3	)	(197.3	)	(159.9	)	(159.9	)	
Finance lease liabilities	 	—	 	—	 	(48.8	)	(48.8	)	(64.5	)	(64.5	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total financial liabilities	 	(734.9	)	(734.9	)	(1,432.3	)	(1,443.8	)	(1,312.8	)	(1,329.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net financial instruments	 	(397.0	)	(397.0	)	(1,006.9	)	(1,018.4	)	(830.1	)	(847.0	)	
 
The fair value of the derivative financial liabilities is summarised as below.

 	 	2014
$m	 	2015
$m	 	2016
$m	 	
 	 	 	 	 	 	 	 	
Vietnam option	 	—	 	(3.0	)	(3.7	)	
Cross currency swap	 	—	 	—	 	(1.6	)	
Embedded derivatives	 	(11.1	)	(18.6	)	(19.9	)	
 	 	 	 	 	 	 	 	
Total	 	(11.1	)	(21.6	)	(25.2	)	
 
F- 95 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25a       Fair values of financial instruments (continued)
 
Fair value hierarchy
 
The table below analyses financial instruments measured at fair value, into a fair value hierarchy based on the valuation technique used to determine fair value.
 
·                   Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
 
·                   Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
 
·                   Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 	 	Level 1	 	Level 2	 	Level 3	 	Total	 	
2014	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	256.4	 	—	 	—	 	256.4	 	
Other loans and receivables	 	—	 	81.5	 	—	 	81.5	 	
Trade and other payables	 	—	 	(111.2	)	—	 	(111.2	)	
Finance lease liabilities	 	—	 	(0.0	)	—	 	(0.0	)	
Other interest-bearing loans	 	—	 	(612.6	)	—	 	(612.6	)	
Derivative financial liabilities (1)	 	—	 	—	 	(11.1	)	(11.1	)	
 	 	 	 	 	 	 	 	 	 	
 	 	256.4	 	(642.3	)	(11.1	)	(397.0	)	

 	 	Level 1	 	Level 2	 	Level 3	 	Total	 	
2015	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	317.0	 	—	 	—	 	317.0	 	
Other loans and receivables	 	—	 	108.4	 	—	 	108.4	 	
Trade and other payables	 	—	 	(197.3	)	—	 	(197.3	)	
Finance lease liabilities	 	—	 	(48.8	)	—	 	(48.8	)	
Other interest-bearing loans	 	—	 	(1,176.1	)	—	 	(1,176.1	)	
Derivative financial liabilities (1)	 	—	 	—	 	(21.6	)	(21.6	)	
 	 	 	 	 	 	 	 	 	 	
 	 	317.0	 	(1,313.8	)	(21.6	)	(1,018.4	)	

 	 	Level 1	 	Level 2	 	Level 3	 	Total	 	
2016	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	371.9	 	—	 	—	 	371.9	 	
Other loans and receivables	 	—	 	110.8	 	—	 	110.8	 	
Trade and other payables	 	—	 	(159.9	)	—	 	(159.9	)	
Finance lease liabilities	 	—	 	(64.5	)	—	 	(64.5	)	
Other interest-bearing loans	 	—	 	(1,080.1	)	—	 	(1,080.1	)	
Derivative financial liabilities (1)	 	—	 	(1.6	)	(23.6	)	(25.2	)	
 	 	 	 	 	 	 	 	 	 	
 	 	371.9	 	(1,195.3	)	(23.6	)	(847.0	)	

(1) The level 2 hierarchy includes the cross currency swaps and the level 3 hierarchy includes the Vietnam option and the embedded derivatives.
 
F- 96 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25a       Fair values of financial instruments (continued)
 
Transfers between level 2 and 3
 
There are no transfers between level 2 and 3 in the year.
 
Reconciliation of fair value measurement using significant unobservable inputs (level 3)
 
The following table presents the changes in level 3 items for the periods ended August 31,:

 	 	Option
$m	 	Embedded derivatives
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	
As at September 1, 2014	 	—	 	11.1	 	11.1	 	
Acquisitions	 	3.0	 	—	 	3.0	 	
Additions	 	—	 	7.6	 	7.6	 	
Fair value adjustment	 	—	 	(0.1	)	(0.1	)	
 	 	 	 	 	 	 	 	
As at August 31, 2015	 	3.0	 	18.6	 	21.6	 	
 	 	 	 	 	 	 	 	
As at September 1, 2015	 	3.0	 	18.6	 	21.6	 	
Fair value adjustment	 	0.7	 	1.3	 	2.0	 	
 	 	 	 	 	 	 	 	
As at August 31, 2016	 	3.7	 	19.9	 	23.6	 	
 
Description of significant unobservable inputs to valuation
 
The valuation of the embedded derivatives are based on the fair value of rent payable pursuant to the terms and conditions set forth in the lease agreement when compared with rent under normal commercial terms. A year on year inflation swap and option valuation model which takes into account the leverage, cap and floor characteristics and the market rate has been applied to perform the valuation.
 
The valuation of the a call option to purchase the remaining 10% interest in the British International Schools Group, Vietnam is dependent on the future cash flows of the underlying business as well as the market capitalization of the Company. The Group adopted the Put-Call Parity to perform the valuation on this call option.
 
25b          Credit risk
 
Financial risk management
 
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers, bank balances. This credit risk is minimized by a policy under which the Group only enters into such contracts with companies, governments, banks and financial institutions with strong credit ratings within limits set for each organization. In respect of derivatives, dealing activity is closely controlled and counterparty positions are monitored regularly. No credit limits were exceeded during the year and the Group does not anticipate that any losses will arise from non-performance by these counterparties.
 
Exposure to credit risk
 
Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department in accordance with the Group’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The maximum exposure to credit risk at the reporting date was $110.8 million (2015 - $117.2 million, 2014 - $81.5 million) being the total of the carrying amount of financial assets .
 
F- 97 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25b       Credit risk (continued)
 
Financial assets
 
The maximum exposure to credit risk for financial assets at the reporting date by currency was:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Sterling	 	4.6	 	4.1	 	2.6	 	
Dollar and Dollar peg currencies	 	30.4	 	51.6	 	41.2	 	
Chinese Renminbi	 	3.9	 	6.3	 	9.1	 	
European currencies (excluding Sterling)	 	11.3	 	9.9	 	13.6	 	
Malaysian Ringgit	 	0.8	 	0.6	 	0.7	 	
Swiss Franc	 	25.3	 	28.3	 	31.1	 	
Thai Baht	 	3.0	 	3.7	 	4.3	 	
Singapore Dollar	 	2.2	 	1.5	 	0.7	 	
Vietnamese Dong	 	—	 	1.3	 	6.4	 	
Mexican Peso	 	—	 	1.1	 	1.1	 	
 	 	 	 	 	 	 	 	
 	 	81.5	 	108.4	 	110.8	 	
 
The maximum exposure to credit risk for financial assets at the reporting date by type of counterparty was:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
School fees	 	60.4	 	88.7	 	91.7	 	
Amounts receivable through other contracts	 	9.3	 	3.8	 	1.8	 	
Rental deposits	 	3.6	 	6.3	 	6.9	 	
Others	 	8.2	 	9.6	 	10.4	 	
 	 	 	 	 	 	 	 	
 	 	81.5	 	108.4	 	110.8	 	
 
F- 98 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25b                  Credit risk (continued)
 
Credit quality of financial assets and impairment losses
 
The ag eing of trade receivables at the reporting date was:

 	 	2014	 	 	 	2015	 	 	 	
 	 	Gross	 	Provision for
impairment	 	Total	 	Gross	 	Provision for
impairment	 	Total	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Not past due	 	40.9	 	(0.1	)	40.8	 	35.5	 	(0.0	)	35.5	 	
Less than 1 month past due	 	8.2	 	—	 	8.2	 	22.6	 	(0.1	)	22.5	 	
1 – 3 months past due	 	20.8	 	(0.3	)	20.5	 	29.5	 	(0.2	)	29.3	 	
More than 3 months past due	 	4.4	 	(4.3	)	0.1	 	11.5	 	(6.3	)	5.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	74.3	 	(4.7	)	69.6	 	99.1	 	(6.6	)	92.5	 	

 	 	 	 	 	 	 	 	2016	 	 	 	
 	 	 	 	 	 	 	 	Gross	 	Provision for
impairment	 	Total	 	
 	 	 	 	 	 	 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Not past due	 	 	 	 	 	 	 	38.7	 	(0.0	)	38.7	 	
Less than 1 month past due	 	 	 	 	 	 	 	28.4	 	(0.0	)	28.4	 	
1 – 3 months past due	 	 	 	 	 	 	 	17.5	 	(0.3	)	17.2	 	
More than 3 months past due	 	 	 	 	 	 	 	14.3	 	(5.1	)	9.2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	98.9	 	(5.4	)	93.5	 	
 
The Group defines impaired trade receivables to include those debts aged more than 60 – 75 days from the due date and are no longer deemed to be collectible.
 
F- 99 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25b                  Credit risk (continued)
 
Credit quality of financial assets and impairment losses (continued)
 
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Balance at September 1	 	1.1	 	4.7	 	6.6	 	
Impairment loss recognized	 	3.9	 	5.4	 	1.6	 	
Impairment loss reversed	 	(0.3	)	(2.2	)	(0.2	)	
Impairment loss written off	 	—	 	(1.2	)	(2.6	)	
Effect of foreign exchange movements	 	0.0	 	(0.1	)	(0.0	)	
 	 	 	 	 	 	 	 	
Balance at August 31,	 	4.7	 	6.6	 	5.4	 	
 
25c                   Liquidity risk
 
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the effect of netting agreements:

 	 	2014	 	2015	 	
 	 	Undiscounted
contractual
cash flows	 	1 year
or less	 	1 to
<2years	 	2 to
<5years	 	5years and
over	 	Undiscounted
contractual
cash flows	 	1 year
or less	 	1 to
<2years	 	2 to
<5years	 	5years and
over	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Bank overdraft	 	90.2	 	90.2	 	—	 	—	 	—	 	90.7	 	90.7	 	—	 	—	 	—	 	
Borrowings	 	688.4	 	48.6	 	28.7	 	85.9	 	525.2	 	1,438.2	 	69.7	 	66.0	 	130.7	 	1,171.8	 	
Finance lease liabilities	 	0.0	 	0.0	 	—	 	—	 	—	 	210.3	 	3.7	 	3.0	 	8.9	 	194.7	 	
Trade and other payables	 	111.2	 	60.5	 	7.6	 	18.4	 	24.7	 	197.3	 	167.3	 	9.6	 	12.9	 	7.5	 	
Derivative financial liabilities	 	27.7	 	0.1	 	0.2	 	1.0	 	26.4	 	26.1	 	0.1	 	0.2	 	1.5	 	24.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	917.5	 	199.4	 	36.5	 	105.3	 	576.3	 	1,962.6	 	331.5	 	78.8	 	154.0	 	1,398.3	 	
 
F- 100 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25c       Liquidity risk (continued)

 	 	2016	 	
 	 	Undiscounted
contractual
cash flows	 	1 year
or less	 	1 to
<2years	 	2 to
<5years	 	5 years and
over	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	
Borrowings	 	1,359.0	 	66.9	 	65.0	 	1,017.0	 	210.1	 	
Finance lease liabilities	 	243.9	 	4.8	 	4.4	 	13.2	 	221.5	 	
Trade and other payables	 	159.9	 	132.9	 	12.4	 	7.6	 	7.0	 	
Derivative financial liabilities	 	29.2	 	0.6	 	4.4	 	1.2	 	23.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	
 	 	1,792.0	 	205.2	 	86.2	 	1,039.0	 	461.6	 	
 
As the Group conducts most of its operations outside the United States (for example, 33 of the Group’s 43 premium schools are in non-United States jurisdictions), the Group’s Premium Schools hold significant non-US dollar cash balances in overseas operations which arise from fee income and represent a combination of working capital and trading profits. As the cash and cash equivalents held by non-United States subsidiaries are used generally to fund the Group’s non-United States operations, the Group believes that the amount of cash and cash equivalents held by non-United States subsidiaries is not significant to an understanding of the Group’s liquidity. These monies are held in operations in countries which include those where exchange control restrictions may prevent full repatriation of funds to the UK parent undertaking. The Group utilizes these funds through a combination of reinvestment in the expansion or improvement of overseas operations, or by repatriation to the UK through management contracts, including royalty agreements, management charges and dividends. Through these means the Directors believe that satisfactory distribution of these funds can be achieved.
 
As at August 31, 2016, the Group held $208.3 million (2015 - $193.8 million, 2014 - $140.0 million) of cash and equivalents in jurisdictions where foreign exchange and other regulatory controls may limit the distribution of cash to subsidiaries in jurisdictions without foreign exchange and other regulatory controls. For information about undistributed earnings management considers permanently reinvested in jurisdictions with foreign exchange and other regulatory controls, see Note 10.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25d       Market risk
 
Financial risk management
 
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments .
 
Foreign currency risk
 
The Group has significant and expanding international operations trading in non US dollar currencies. Movements in global exchange rates can cause currency exposures to the Group’s consolidated US dollar financial results. Where stable currencies exist, trade is conducted in local currencies and where appropriate, borrowings are matched in that currency to mitigate the risk of exposure to the Group’s assets and liabilities from exchange rate movements. In countries of operation where currency trading zones are considered to be weaker, some transactions are conducted in US dollar and Euro to try to minimize exchange fluctuation risks.
 
A significant portion of the Group’s debt is denominated in US dollar. The Group uses cross currency interest rate swaps in conjunction with certain debt issuances such as the CHF 200 million senior notes issued in June 2015 to reduce exposure to foreign currency fluctuations and to lock in fixed local currency interest rates. Under these cross currency interest rate swaps, the Group receives interest based on a floating US dollar rate and pays interest based on a fixed local currency rate based on the contractual amounts in US dollar and the local currency, respectively. For each of the six currently outstanding cross currency interest rate swaps, the Group swapped an US dollar floating rate liability with an obligation to pay LIBOR (with a 1% floor) plus a margin of 3.75% for a RMB or EUR fixed interest rate liability with an obligation to pay a fixed rate on the RMB or EUR equivalent amount.  Each swap includes an embedded foreign exchange option that limits the potential gains on final exchange to between 10-15%. The Group does not hold or issue financial instruments for trading purposes and does not use derivatives for speculative purposes.
 
The following table sets out the Cash and cash equivalents balance based on currency.

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Dollar and Dollar-pegged currencies	 	32.1	 	23.6	 	59.4	 	
Sterling	 	10.8	 	25.6	 	7.3	 	
European currencies (excluding Sterling)	 	54.0	 	53.3	 	56.0	 	
Chinese Renminbi	 	130.2	 	141.2	 	135.3	 	
Swiss Franc	 	6.9	 	9.0	 	23.2	 	
Vietnamese Dong	 	—	 	36.3	 	54.9	 	
Singaporean Dollar	 	12.5	 	11.7	 	17.7	 	
Malaysian Ringgit	 	0.1	 	0.0	 	0.0	 	
Thai Baht	 	9.8	 	8.6	 	8.9	 	
Mexican Peso	 	—	 	7.3	 	9.2	 	
 	 	 	 	 	 	 	 	
 	 	256.4	 	316.6	 	371.9	 	
 
F- 102 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25d       Market risk (continued)
 
Foreign currency risk (continued)
 
The table below shows converted into US dollar, the aggregate monetary assets and liabilities that are in a different currency from the various functional currencies of the entities in the Group.

August 31, 2014	 	Sterling
$m	 	European
currencies
$m	 	US dollar and
US dollar peg
$m	 	Singapore
Dollar
$m	 	Swiss
Franc
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	0.0	 	0.1	 	18.4	 	—	 	—	 	18.5	 	
Trade and other payables	 	(0.1	)	—	 	—	 	(0.0	)	—	 	(0.1	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	(0.1	)	0.1	 	18.4	 	(0.0	)	—	 	18.4	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
August 31, 2015	 	Sterling
$m	 	European
currencies
$m	 	US dollar
and US
dollar peg
$m	 	Singapore
Dollar
$m	 	Swiss
Franc
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	0.0	 	9.4	 	15.3	 	—	 	15.0	 	39.7	 	
Trade and other payables	 	(0.1	)	(0.1	)	—	 	(0.0	)	—	 	(0.2	)	
Other interest-bearing loans	 	—	 	—	 	—	 	—	 	(200.9	)	(200.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	(0.1	)	9.3	 	15.3	 	(0.0	)	(185.9	)	(161.4	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
August 31, 2016	 	Sterling
$m	 	European
currencies
$m	 	US dollar
and US
dollar peg
$m	 	Singapore
Dollar
$m	 	Swiss
Franc
$m	 	Total
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	0.1	 	2.4	 	16.2	 	—	 	0.0	 	18.7	 	
Loans and receivables	 	0.2	 	0.0	 	0.0	 	—	 	—	 	0.2	 	
Trade and other payables	 	(0.1	)	(0.0	)	(8.3	)	—	 	—	 	(8.4	)	
Finance lease liabilities	 	—	 	(17.0	)	—	 	—	 	—	 	(17.0	)	
Other interest-bearing loans	 	—	 	—	 	—	 	—	 	(196.7	)	(196.7	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	0.2	 	(14.6	)	7.9	 	—	 	(196.7	)	(203.2	)	
 
The Group is also exposed to foreign exchange risk on intercompany transactions. Please refer to Note 5 for more details.
 
F- 103 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25d       Market risk (continued)
 
Sensitivity analysis
 
The following tables demonstrate the sensitivity to a reasonably possible change in US dollar exchange rates, with all other variables held constant. The impact on the Group’s profit or loss is due to changes in the fair value of monetary assets and liabilities. The impact on the Group’s equity is due to the changes in the fair value of non-monetary assets and liabilities. A 4% strengthening (2015 - 4% strengthening) of the following currencies against the US dollar at August 31, would have increased/(decreased) equity and profit or loss by the amounts shown below.

 	 	Profit and loss	 	Equity	 	
 	 	2014	 	2015	 	2016	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sterling	 	0.0	 	0.0	 	0.0	 	0.0	 	0.0	 	0.0	 	
European currencies (excluding Sterling)	 	0.0	 	0.0	 	(0.7	)	0.0	 	0.0	 	(0.7	)	
Chinese Renminbi	 	—	 	—	 	—	 	—	 	—	 	—	 	
Swiss Franc	 	—	 	(8.1	)	(8.3	)	—	 	(8.1	)	(8.3	)	
Vietnamese Dong	 	—	 	—	 	—	 	—	 	—	 	—	 	
Singaporean Dollar	 	0.0	 	—	 	—	 	0.0	 	—	 	—	 	
Malaysian Ringgit	 	—	 	—	 	—	 	—	 	—	 	—	 	
Thai Baht	 	—	 	—	 	—	 	—	 	—	 	—	 	
Mexican Peso	 	—	 	—	 	—	 	—	 	—	 	—	 	
 
Profile
 
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Fixed rate instruments	 	 	 	 	 	 	 	
Financial liabilities	 	—	 	200.9	 	196.7	 	
 	 	 	 	 	 	 	 	
Variable rate instruments	 	 	 	 	 	 	 	
Financial liabilities	 	612.6	 	963.7	 	866.5	 	
 
The Group does not apply hedge accounting for any of its derivative financial instruments. As such the Group recognizes changes in fair value in respect of any of its derivative financial instruments immediately in its Consolidated Income Statement.
 
The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The interest rate profile of the Group’s debt is predominately variable.
 
At the August 31, 2016, all of the Group’s borrowings were issued at variable interest rates with the exception of the 5.75% senior secured notes due 2022 which are fixed rate. The impact of a 1% increase in the 3 month LIBOR rate of 0.84% a as at 31 August 2016 (2015 - 0.33%, 2014 — 0.23%) on the Group’s variable interest rate debt which is subject to a 1.00% LIBOR floor not covered by the derivative financial instruments would be to increase the Group’s interest charge by approximately $5.7 million (2015 - $2.9 million, 2014 - $1.2 million).
 
F- 104 

Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
25                         Financial instruments (continued)
 
25e       Capital management
 
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may issue new shares or sell fixed assets to reduce debt.
 
The Group monitors capital on the basis of the debt to equity ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the Consolidated Balance Sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the Consolidated Balance Sheet plus net debt.
 
On March 31, 2014, the Group entered into a credit agreement for a $515.0 million senior secured term loan facility and a $75.0 million revolving credit facility. The senior secured term loan was subsequently increased by $150.0 million on March 2, 2015 and further increased by $240.0 million on June 25, 2015 and the revolving credit facility increased to $125.0 million. The Group discharged its obligations under the indentures governing the $490.0 million 10.25% senior secured notes and $150.0 million 8.50%/9.50% PIK toggle notes, both of which were fully redeemed as of April 14, 2014. Post entry into the senior secured term loan facility, the Group monitors the Net Leverage Ratio (“NLR” — Debt less Cash and Cash Equivalents divided by Consolidated EBITDA as defined in the facility agreement. In the credit agreement for the senior secured term loan facility, debt is defined as the greater of the Consolidated Balance Sheet amount of all the debt or the par value of such debt and Consolidated EBITDA is adjusted for the full year impact of acquisitions and interest receivable). The relevant ratios for the three years ended August 31, 2016 were as follows:

 	 	2014	 	2014	 	2015	 	2015	 	2016	 	2016	 	
 	 	Carrying
value	 	Face
value	 	Carrying
value	 	Face
value	 	Carrying
value	 	Face
value	 	
 	 	$m	 	$m	 	$m	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total borrowings	 	612.6	 	623.9	 	1,164.6	 	1,196.0	 	1,063.2	 	1,091.6	 	
Less cash and cash equivalents	 	(256.4	)	(256.4	)	(316.6	)	(316.6	)	(371.9	)	(371.9	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net debt	 	356.2	 	367.5	 	848.0	 	879.4	 	691.3	 	719.7	 	
Total equity	 	193.1	 	193.1	 	281.5	 	281.5	 	287.9	 	291.9	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total capital	 	549.3	 	560.6	 	1,129.5	 	1,160.9	 	979.2	 	1,011.6	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net debt to total equity ratio	 	1.8:1	 	1.9:1	 	3.0:1	 	3.1:1	 	2.4:1	 	2.5:1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net leverage ratio (NLR)*	 	2.75	 	2.75	 	3.93	 	3.93	 	3.82	 	3.82	 	
 
* Figures are unaudited.
 
25f       Offsetting financial assets and financial liabilities
 
There are no offsetting financial assets and financial liabilities during the year.
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
26                         Operating leases
 
Future aggregate minimum lease payments are as follows:

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Land and Buildings	 	 	 	 	 	 	 	
Less than one year	 	53.8	 	71.1	 	110.9	 	
Between one and five years	 	204.1	 	252.9	 	334.2	 	
More than five years	 	454.4	 	972.0	 	1,397.5	 	
 	 	 	 	 	 	 	 	
 	 	712.3	 	1,296.0	 	1,842.6	 	
Other	 	 	 	 	 	 	 	
Less than one year	 	0.4	 	0.4	 	0.5	 	
Between one and five years	 	0.7	 	0.5	 	0.5	 	
More than five years	 	—	 	—	 	0.0	 	
 	 	 	 	 	 	 	 	
 	 	1.1	 	0.9	 	1.0	 	
 	 	 	 	 	 	 	 	
 	 	713.4	 	1,296.9	 	1,843.6	 	
 
Operating leases are payable at market rates and are not subject to any restrictions other than those that would normally be expected to apply to such agreements. Agreements in respect of properties may be subject to renewal according to the landlord’s terms. There are no new terms of renewal applicable to any other operating lease agreements.
 
27                         Commitments
 
Capital commitments

 	 	2014	 	2015	 	2016	 	
 	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
Contracted but not provided for	 	3.0	 	9.3	 	7.9	 	
Authorised but not contracted or provided for	 	28.6	 	15.0	 	5.9	 	
 	 	 	 	 	 	 	 	
 	 	31.6	 	24.3	 	13.8	 	
 
All capital commitments relate to tangible assets.
 
28                         Contingencies
 
The Group has provided the following bank guarantees:
 
To SCTAI Anglo Iskola KFT for €0.7 m illion ($0.7 million, 2015 -$0.7 million, 2014 - $0.4 million) in respect of a 30-year lease of school premises in Budapest. The annual payments under this lease are €1.3 million ($1.4 million, 2015 - €0.4 million ($0.4 million), 2014 - $0.6 million) and the guarantee expires on September 14, 2016.
 
To Abu Dhabi Education Council for AED 1.3 million ($0.3 million, 2015 - $0.4 million, 2014 - $0.4 million) which is open ended.
 
To Dubai Islamic Bank for AED 24.0 million ($6.5 million, 2015 - $9.8 million, 2014 - $9.8 million) in respect of a 13-year lease for school premises in Dubai, the guarantee reduced to AED 12.0 million from September 14, 2016 and expires on September 15, 2017.
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
29                         Related party transactions
 
Controlling entities
 
Premier Education Holdings Limited (“PEH”) owns 66.9% of the ordinary shares of Nord Anglia Education, Inc., and Baring Private Equity Asia owns 100% of Premier Education Holdings Limited.
 
Transactions with related parties
 
During the year the Group and Company entered into transactions, in the ordinary course of business, with key management personnel. Transactions entered into, and trading balances outstanding at August 31, are as follows:

 	 	2014	 	2015	 	2016	 	
 	 	Amounts
owed by
related
parties
$m	 	Amounts
owed to
related
parties
$m	 	Amounts
owed by
related
parties
$m	 	Amounts
owed to
related
parties
$m	 	Amounts
owed by
related
parties
$m	 	Amounts
owed to
related
parties
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Entities with significant influence over the Group:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Premier Education Holdings Limited	 	—	 	—	 	—	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Key management personnel	 	1.5	 	0.8	 	1.5	 	0.8	 	1.5	 	0.6	 	

Name of Company	 	Holding	 	Proportion
of voting
rights and
shares held	 	Nature of
business	 	
 	 	 	 	 	 	 	 	
Subsidiary undertaking:	 	 	 	 	 	 	 	
Nord Anglia Education (UK) Holdings PLC	 	Ordinary	 	100	%	Holding company	 	
 
Remuneration of senior management is disclosed in Note 8.
 
The Group holds a 50% shareholding in EduAction Waltham Forest Limited through its 100% owned subsidiary Nord Anglia Education Limited. At the reporting date the joint venture was owed an amount of $0.9 m illion (2015 - $1.1 million, 2014 - $1.1 million) by the Group which is included within other payables due less than one year.
 
During the year ended August 31, 2016, consistent with August 31, 2015 financial statements, the Swiss schools continue to rent premises from a key member of management and companies which are controlled by the key member of management.

 	 	Balance at
August 31,
2014
$m	 	Rental
charge for
the period
$m	 	Balance at
August 31,
2015
$m	 	Rental
charge for
the period
$m	 	Balance at
August 31,
2016
$m	 	Rental
charge for
the period
$m	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Leosolis SA	 	0.2	 	3.4	 	—	 	3.2	 	—	 	4.2	 	
Catal Services DMCC	 	—	 	—	 	—	 	—	 	—	 	1.1	 	
Hunters SA	 	—	 	1.0	 	—	 	0.9	 	—	 	0.8	 	
Toumim SA	 	—	 	0.5	 	—	 	0.3	 	—	 	0.3	 	
Delphim SA	 	0.8	 	3.5	 	—	 	3.2	 	—	 	3.1	 	
Educim SA	 	—	 	0.0	 	—	 	3.1	 	—	 	2.4	 	
La Renardières Service SA	 	—	 	0.7	 	—	 	0.7	 	—	 	0.6	 	
Jérôme de Meyer	 	—	 	—	 	—	 	—	 	—	 	0.0	 	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
29                         Related party transactions (continued)
 
Future aggregate minimum lease payments to the key member of management as well as companies controlled by the key member of management are as follows:

2014	 	Total
payable
($m)	 	Due within
1 year
($m)	 	Due within
1 to 5 years
($m)	 	Due after
more than 5
years
($m)	 	
 	 	 	 	 	 	 	 	 	 	
Leosolis SA	 	68.8	 	3.3	 	13.1	 	52.4	 	
Hunters SA	 	12.8	 	0.9	 	2.6	 	9.3	 	
Toumim SA	 	6.7	 	0.3	 	1.3	 	5.1	 	
Delphim SA	 	40.5	 	3.4	 	13.5	 	23.6	 	
Educim SA	 	65.2	 	2.6	 	10.5	 	52.1	 	
La Renardières Service SA	 	7.5	 	0.6	 	2.3	 	4.6	 	
Residence Panorama SA	 	0.4	 	0.1	 	0.3	 	—	 	
Jérôme de Meyer	 	0.1	 	0.1	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
 	 	202.0	 	11.3	 	43.6	 	147.1	 	
 	 	 	 	 	 	 	 	 	 	
2015	 	Total
payable
$m	 	Due within 1
year
$m	 	Due within 1
to 5 years
$m	 	Due after
more than 5
years
$m	 	
 	 	 	 	 	 	 	 	 	 	
Leosolis SA	 	62.4	 	3.1	 	12.5	 	46.8	 	
Hunters SA	 	11.4	 	0.9	 	2.2	 	8.3	 	
Toumim SA	 	6.0	 	0.3	 	1.3	 	4.4	 	
Delphim SA	 	35.4	 	3.2	 	12.9	 	19.3	 	
Educim SA	 	59.7	 	2.5	 	10.0	 	47.2	 	
La Renardières Service SA	 	6.6	 	0.6	 	2.2	 	3.8	 	
Residence Panorama SA	 	0.3	 	0.1	 	0.2	 	—	 	
Jérôme de Meyer	 	0.0	 	0.0	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
 	 	181.8	 	10.7	 	41.3	 	129.8	 	
 	 	 	 	 	 	 	 	 	 	
2016	 	Total
payable
$m	 	Due within
1 year
$m	 	Due within
1 to 5 years
$m	 	Due after
more than 5
years
$m	 	
 	 	 	 	 	 	 	 	 	 	
Leosolis SA	 	58.0	 	3.1	 	12.2	 	42.7	 	
Hunters SA	 	10.6	 	0.8	 	2.2	 	7.6	 	
Toumim SA	 	5.7	 	0.3	 	1.2	 	4.2	 	
Delphim SA	 	31.4	 	3.1	 	12.6	 	15.7	 	
Educim SA	 	55.4	 	1.8	 	9.8	 	43.8	 	
La Renardières Service SA	 	6.0	 	0.6	 	2.2	 	3.2	 	
Jérôme de Meyer	 	0.0	 	0.0	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
 	 	167.1	 	9.7	 	40.2	 	117.2	 	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
29                         Related party transactions (continued)
 
There is a rental guarantee made to Delphim SA for CHF 1.2 million in respect of a 14-year lease of school premises in Switzerland. The annual payment under this lease are CHF 3.1 million ($3.2 million) and the guarantee expires on August 31, 2026.
 
In addition to the above, companies owned by the key management personnel were also paid a consultancy fee of $2.7 million (2015 - $0.2 million, 2014 - $1.2 million) and reimbursement of costs of $1.0 million (2015 - $2.5 million, 2014 - $1.2 million).
 
Included within other payables is an amount of $0.6 million (current - $0.2 million, non-current - $0.4 million), 2015 - $0.8 million (current - $0.2 million, non-current - $0.6 million), 2014 - $0.8 million (current - $0.2 million, non-current - $0.6 million). The $0.6 million is due to the vendor of College Champittet for the earn-out agreement and is to be settled over the next three years (2015 - $0.8 million to be settled over the next four years, 2014 - $0.8 million to be settled over four years).
 
During the year ended August 31, 2014, $15.0 million was paid to Baring Private Equity Asia, the ultimate parent of the Group in respect of the termination of professional services and consultancy agreement in 2014 and management and consultancy fees in 2013. Furthermore in 2013, $0.2 million was paid to Barings Private Equity Asia for the reimbursement of travelling expenses.
 
During the year ended August 31, 2014, $61.2 million of preference share redemption premium was paid to PEH and the carrying value of the shares redeemed was $0.0 million. Included within the transactions with PEH is the $19.5 million consideration in respect of the transfer of British International School Abu Dhabi (“BISAD”) in the prior year. The remaining balance ($14.5 million) was settled as part of the share cancellation and recapitalization (see Note 24).
 
29(i)
 
During the year ended August 31, 2015, Premier Education Holdings Limited made discretionary payments in cash to key management personnel and a non-executive director, totaling $12.8 million. The payments were made to incentivize certain key management personnel not to sell their shares. The Group was not party to, and incurred no liability in respect of, these payments. In accordance with IFRS these payments are not required to be recorded in the Group’s Consolidated Income Statement, Consolidated Statement of Comprehensive Income/(Loss) or the Consolidated Balance Sheet.
 
Disclosure of this transaction was not included in the August 31, 2015 and August 31, 2016 consolidated financial statements. The Group considers that this should have been disclosed as a related party transaction in the August 31, 2015 consolidated financial statements and with respect to the comparative period in the August 31, 2016 consolidated financial statements. The Group has corrected the disclosure by revising the consolidated financial statements.
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
30                         Earnings/(loss) per share
 
Basic earnings/(loss) per share amounts are calculated by dividing the earnings/(losses) attributable to owners of the company by the weighted average number of ordinary shares in issue during the financial year, which has been adjusted to reflect retroactively as outstanding in all periods the shares held by PEH, the parent, immediately prior to the initial public offering. During the year $nil (2015 - $nil, 2014 - $32.1 million) of new preference shares were redeemed at the option of the Company. The amount paid on redemption was $nil (2015 - $nil, 2014 - $61.6 million) and the carrying value of the shares redeemed comprised of $nil (2015 - $nil, 2014 - $0.0 million) of share capital and $nil (2015 - $nil, 2014 - $61.6 million) of associated share premium. The redemption premium paid to the preference shareholders, whom are not the controlling party, has been added to loss for the year available for equity shareholders.
 
Diluted earnings/(loss) per share amounts are calculated by dividing the earnings/(losses) attributable to owners of the company by the weighted average number of ordinary shares in issue during the financial year adjusted for the effects of potentially dilutive options. The dilutive effect is calculated on the full exercise of all potentially dilutive ordinary share options granted by the Group, including performance-based options which the Group considers to have been earned.

 	 	2014	 	2015	 	2016	 	
 	 	Basic	 	Potentially
dilutive share
options	 	Diluted	 	Basic	 	Potentially
dilutive
share options	 	Diluted	 	Basic	 	Potentially
dilutive
share options	 	Diluted	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss ($m)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	(90.2	)	 	 	(90.2	)	6.5	 	 	 	6.5	 	47.1	 	 	 	47.1	 	
Preference share redemption premium	 	(0.4	)	 	 	(0.4	)	—	 	 	 	—	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total losses attributable to equity shareholders	 	(90.6	)	 	 	(90.6	)	6.5	 	 	 	6.5	 	47.1	 	 	 	47.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average number of shares (millions)	 	85.1	 	—	 	85.1	 	99.4	 	0.1	 	99.5	 	104.1	 	—	 	104.1	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Loss per share ($ per share)	 	(1.07	)	 	 	(1.07	)	0.07	 	 	 	0.07	 	0.45	 	 	 	0.45	 	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
31                         Subsequent events
 
A sale and purchase agreement was signed in relation to a Houston property, reported as an asset held for sale, subsequent to the year end, for a sale price of $9.7 million (see Note 12). This is subject to due diligence.
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
32                         Parent company financial information 
 
Income Statement
for the year ended August 31

 	 	 	 	2014	 	2015	 	2016	 	
 	 	Note	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Revenue	 	 	 	—	 	—	 	—	 	
Cost of sales	 	 	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Gross profit	 	 	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Selling, general and administrative expense	 	 	 	(3.0	)	(1.0	)	(4.1	)	
Depreciation	 	 	 	—	 	—	 	—	 	
Amortization	 	 	 	—	 	—	 	—	 	
Exceptional items	 	32c	 	(35.0	)	(16.1	)	1.7	 	
 	 	 	 	 	 	 	 	 	 	
Total expenses	 	 	 	(38.0	)	(17.1	)	(2.4	)	
 	 	 	 	 	 	 	 	 	 	
Operating loss	 	 	 	(38.0	)	(17.1	)	(2.4	)	
 	 	 	 	 	 	 	 	 	 	
Finance income	 	 	 	—	 	1.5	 	8.2	 	
Finance expense	 	32d	 	(10.4	)	(5.0	)	(5.5	)	
 	 	 	 	 	 	 	 	 	 	
Net financing income/(expense)	 	 	 	(10.4	)	(3.5	)	2.7	 	
 	 	 	 	 	 	 	 	 	 	
Profit/(loss) before tax	 	 	 	(48.4	)	(20.6	)	0.3	 	
Income tax	 	 	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the period	 	 	 	(48.4	)	(20.6	)	0.3	 	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
32                         Parent company financial information (continued)
 
Statement of Comprehensive Income/(Loss)
for the year ended August 31

 	 	 	 	2014	 	2015	 	2016	 	
 	 	Note	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Profit/(loss) for the period	 	 	 	(48.4	)	(20.6	)	0.3	 	
 	 	 	 	 	 	 	 	 	 	
Other comprehensive income/(loss) for the period, net of income tax	 	 	 	—	 	—	 	—	 	
 	 	 	 	 	 	 	 	 	 	
Total comprehensive income/(loss) for the year	 	 	 	(48.4	)	(20.6	)	0.3	 	
 	 	 	 	 	 	 	 	 	 	
Attributable to:	 	 	 	 	 	 	 	 	 	
Equity holders of the company	 	 	 	(48.4	)	(20.6	)	0.3	 	
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
32                         Parent company financial information (continued)
 
Balance Sheet
as at September 1, 2014, August 31, 2015 and 2016

 	 	 	 	September 1,
2014	 	August 31,
2015	 	August 31,
2016	 	
 	 	Note	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	 	 	
Non-current assets	 	 	 	 	 	 	 	 	 	
Investments	 	32b	 	538.3	 	538.3	 	550.6	 	
Advances to subsidiaries	 	 	 	—	 	119.7	 	123.0	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	538.3	 	658.0	 	673.6	 	
 	 	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	 	
Advances to subsidiaries	 	 	 	14.6	 	—	 	—	 	
Cash and cash equivalents	 	 	 	0.0	 	0.0	 	0.0	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	14.6	 	0.0	 	0.0	 	
 	 	 	 	 	 	 	 	 	 	
Total assets	 	 	 	552.9	 	658.0	 	673.6	 	
 	 	 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	 	 	
Other interest-bearing loans and borrowings	 	 	 	0.0	 	—	 	—	 	
Advances from subsidiaries and other payables	 	 	 	(25.2	)	(7.5	)	(2.4	)	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	(25.2	)	(7.5	)	(2.4	)	
Non-current liabilities	 	 	 	 	 	 	 	 	 	
Other interest-bearing loans and borrowings	 	 	 	0.0	 	—	 	—	 	
Advances from subsidiaries	 	 	 	(109.1	)	(114.4	)	(121.9	)	
 	 	 	 	 	 	 	 	 	 	
 	 	 	 	(109.1	)	(114.4	)	(121.9	)	
 	 	 	 	 	 	 	 	 	 	
Total liabilities	 	 	 	(134.3	)	(121.9	)	(124.3	)	
 	 	 	 	 	 	 	 	 	 	
Net assets	 	 	 	418.6	 	536.1	 	549.3	 	
 	 	 	 	 	 	 	 	 	 	
Equity attributable to equity holders of the parent	 	 	 	 	 	 	 	 	 	
Share capital	 	24	*	1.0	 	1.0	 	1.0	 	
Share premium	 	24	*	597.1	 	735.2	 	736.0	 	
Shareholder deficit	 	 	 	(179.5	)	(200.1	)	(187.7	)	
 	 	 	 	 	 	 	 	 	 	
Shareholders’ funds	 	 	 	418.6	 	536.1	 	549.3	 	
 
These financial statements set out on pages 120 to 128 were approved the board of Directors on November 29, 2016 and were signed on its behalf by:

A Fitzmaurice	 	G Halder	
Director	 	Director	
November 29, 2016	 	November 29, 2016	
 
Company number: MC-264950

* Reference refers to consolidated financial statement note.
 
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Notes to the financial statements for the year ended August 31, 2016 (continued)
 
32                         Parent company financial information (continued)
 
Statement of Changes in Equity
for the year ended August 31, 2014, August 31, 2015 and August 31, 2016

 	 	Share
capital	 	Share
premium	 	Shareholders’
deficit	 	Total
shareholder
equity	 	
 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2013	 	67.5	 	256.5	 	(133.7	)	190.3	 	
 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss for the year	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Loss for the year	 	—	 	—	 	(48.4	)	(48.4	)	
 	 	 	 	 	 	 	 	 	 	
Transactions with owners, recorded directly in equity	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Proceeds from shares issued (see Note 24*)	 	1.0	 	348.6	 	—	 	349.6	 	
Issue of preference shares	 	0.0	 	3.8	 	—	 	3.8	 	
Contribution from parent	 	—	 	14.5	 	—	 	14.5	 	
Transaction costs recognized directly in equity	 	—	 	(29.6	)	—	 	(29.6	)	
Return of capital to pre-IPO shareholders	 	(67.5	)	4.0	 	—	 	(63.5	)	
Forgiveness of the loan	 	—	 	14.3	 	—	 	14.3	 	
Distribution to parent	 	—	 	(15.0	)	—	 	(15.0	)	
Equity-settled share based payment transactions (see Note 24*)	 	—	 	—	 	2.6	 	2.6	 	
 	 	 	 	 	 	 	 	 	 	
Total contributions by and distributions to owners	 	(66.5	)	340.6	 	2.6	 	276.7	 	
 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2014 and September 1, 2014	 	1.0	 	597.1	 	(179.5	)	418.6	 	
 	 	 	 	 	 	 	 	 	 	
Total comprehensive loss for the year	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Loss for the year	 	 	 	 	 	(20.6	)	(20.6	)	
 	 	 	 	 	 	 	 	 	 	
Transactions with owners, recorded directly in equity	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Proceeds from shares issued (see Note 24*)	 	0.0	 	148.6	 	—	 	148.6	 	
Transaction costs recognized directly in equity	 	—	 	(10.8	)	—	 	(10.8	)	
Equity-settled share based payment transactions (see Note 24*)	 	—	 	0.3	 	0.0	 	0.3	 	
 	 	 	 	 	 	 	 	 	 	
Total contributions by and distributions to owners	 	0.0	 	138.1	 	0.0	 	138.1	 	
 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2015	 	1.0	 	735.2	 	(200.1	)	536.1	 	
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
32                         Parent company financial information (continued)
 
Statement of Changes in Equity
for the year ended August 31, 2014, August 31, 2015 and August 31, 2016 (continued)

 	 	Share
capital	 	Share
premium	 	Shareholders’
deficit	 	Total
shareholder
equity	 	
 	 	 	 	 	 	 	 	 	 	
Balance at September 1, 2015	 	1.0	 	735.2	 	(200.1	)	536.1	 	
 	 	 	 	 	 	 	 	 	 	
Total comprehensive income for the year	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Income for the year	 	—	 	—	 	0.3	 	0.3	 	
 	 	 	 	 	 	 	 	 	 	
Transactions with owners, recorded directly in equity	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	
Proceeds from shares issued (see Note 24*)	 	0.0	 	0.6	 	—	 	0.6	 	
Equity-settled share based payment transactions # (see Note 24*)	 	0.0	 	0.0	 	12.3	 	12.3	 	
Exercise of share option	 	—	 	0.2	 	(0.2	)	—	 	
 	 	 	 	 	 	 	 	 	 	
Total contributions by and distributions to owners	 	0.0	 	0.8	 	12.1	 	12.9	 	
 	 	 	 	 	 	 	 	 	 	
Balance at August 31, 2016	 	1.0	 	736.0	 	(187.7	)	549.3	 	

* Reference refers to consolidated financial statement note.
 
# Represents all vested share options of the employee employed by subsidiaries.
 
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Table of Contents
 
Notes to the financial statements for the year ended August 31, 2016 (continued)
 
32                         Parent company financial information (continued)
 
Cash Flow Statement
for the year ended August 31,

 	 	2014
$m	 	2015
$m	 	2016
$m	 	
 	 	 	 	 	 	 	 	
Cash flows from operating activities	 	 	 	 	 	 	 	
Profit/(loss) for the period before taxation	 	(48.4	)	(20.6	)	0.3	 	
Adjustments for:	 	 	 	 	 	 	 	
Bond redemption expense	 	13.8	 	—	 	—	 	
Loan to subsidiary forgone	 	—	 	14.5	 	—	 	
Net financial (income)/expense	 	10.4	 	3.5	 	(2.7	)	
Equity settled share-based payment expenses	 	2.6	 	0.3	 	0.2	 	
 	 	 	 	 	 	 	 	
Cash used in operations	 	(21.6	)	(2.3	)	(2.2	)	
 	 	 	 	 	 	 	 	
Payment of bond redemption expense	 	(13.8	)	—	 	—	 	
Interest paid	 	(9.4	)	(5.0	)	(5.5	)	
 	 	 	 	 	 	 	 	
Net cash used in operating activities	 	(44.8	)	(7.3	)	(7.7	)	
 	 	 	 	 	 	 	 	
Cash flows from investing activities	 	 	 	 	 	 	 	
Investment in subsidiary	 	(206.2	)	—	 	—	 	
Interest received	 	—	 	1.5	 	8.2	 	
Advances to subsidiaries	 	(5.3	)	(116.2	)	(3.3	)	
 	 	 	 	 	 	 	 	
Net cash generated from/(used in) investing activities	 	(211.5	)	(114.7	)	4.9	 	
 	 	 	 	 	 	 	 	
Cash flows from financing activities	 	 	 	 	 	 	 	
Proceeds from the issue of share capital, net	 	323.8	 	118.9	 	—	 	
Advances from subsidiaries	 	161.0	 	3.1	 	2.8	 	
Repayment of borrowings	 	(150.0	)	—	 	—	 	
Distribution to parent	 	(15.0	)	—	 	—	 	
Share redemption	 	(63.5	)	—	 	—	 	
 	 	 	 	 	 	 	 	
Net cash generated from financing activities	 	256.3	 	122.0	 	2.8	 	
 	 	 	 	 	 	 	 	
Net increase in cash and cash equivalents	 	0.0	 	0.0	 	0.0	 	
Cash and cash equivalents at the beginning of period	 	0.0	 	0.0	 	0.0	 	
Effect of exchange rate fluctuations on cash held	 	0.0	 	0.0	 	0.0	 	
 	 	 	 	 	 	 	 	
Cash and cash equivalents at August 31	 	0.0	 	0.0	 	0.0	 	
 
F- 117 

Table of Contents
 
Notes to the parent company financial statements
 
32                         Parent company financial information (continued)
 
Nord Anglia Education, Inc. was incorporated in the Cayman Islands on December 14, 2011 as an exempt company with limited liability under the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The address of its registered office is Offices of Maples Corporate Services, Ugland House, PO Box 309, Grand Cayman, KY1-1104, Cayman Islands.
 
32a       Basis of preparation
 
The parent company financial statements are prepared on the historical cost basis. The financial statements are presented in US dollar (“$”), unless otherwise stated.
 
The financial statements are prepared on a going concern basis. The Net assets as at August 31, 2016 amount to $549.3 million (2015 - $536.1 million, 2014 - $418.6 million).
 
The Directors have reviewed the latest guidance relating to going concern and, having made all relevant enquiries, have formed a judgement that Nord Anglia Education, Inc and its subsidiaries (together “the Group”) has adequate resources at its disposal to continue its operations for the foreseeable future. This judgement is based on a review undertaken of the current business forecast to twelve months after the signing of the financial statements and the projected cash requirements over that period to assess the likelihood of the Group being able to continue as a going concern. Suitable sensitivities were run for the periods up to twelve months after the signing of the financial statements to assess the headroom available. This review concluded that there were no material uncertainties that potentially could give rise to a significant doubt about the business continuing as a going concern.
 
Investments
 
In accordance with IAS 27R — Separate financial statements, the Company accounts for its investments in subsidiaries and associates at cost.
 
The Group operates a share based compensation plan under which the entity receives services from employees as consideration for equity instruments (options) of the Group (see Note 22). All vested share options of employees employed by subsidiaries are recognized as investments in subsidiaries and share based payment reserve.
 
Investments are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds the recoverable amount, and the recoverable amount is the higher of value in use and fair value less costs to sell.
 
Borrowings and borrowing costs
 
All loans and borrowings are recognized initially at the fair value of the consideration received net of issue costs associated with the borrowing. Borrowings are stated subsequently at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the Company Income Statement over the period of the borrowings using the effective interest rate method.
 
Borrowing costs are expensed in the period in which they are incurred, except for issue costs, which are amortized over the period of the borrowing. Any initial differences between book value and the fair value of the loan due to the parent company are adjusted to equity to the extent they represent capital transactions with the parent.
 
Out of period adjustments
 
Management has corrected historical share based payment accounting error in the current year financial statements. This had the effect of increasing Investments in the Parent company, with a corresponding increase in the Shareholders’ funds. The impact relating to 2014 and 2015 is $3.8 million and $2.1 million, respectively. This had no impact on the consolidated financial statements, no impact on the Company Income Statement, and was not deemed to be a material error. As a result, the correction was made in the current year Balance Sheet.
 
F- 118 

Table of Contents
 
Notes to the parent company financial statements (continued)
 
32                         Parent company financial information (continued)
 
32b       Investments

 	 	$m	 	
 	 	 	 	
At August 31, 2013	 	332.1	 	
Additions during the year	 	206.2	 	
 	 	 	 	
At August 31, 2014	 	538.3	 	
Additions during the year	 	—	 	
 	 	 	 	
At August 31, 2015	 	538.3	 	
Additions during the year	 	12.3	 	
 	 	 	 	
At August 31, 2016	 	550.6	 	
 
Investments represent 100% of the issued share capital of Nord Anglia Education (UK) Holdings PLC, a company incorporated in the United Kingdom. The principle activity of this subsidiary is that of a holding company.
 
The additions of investment costs in 2016 represent all vested share options of the employee employed by subsidiaries .
 
The Directors believe the carrying value of the investments is supported by their underlying net assets and future cash flows.
 
Details of investments indirectly held by the Company are disclosed in Note 14 of the consolidated financial statements.
 
32c       Exceptional items
 
Included within the current year income of $1.7 million is the release of an over-accrual of Meritas transaction acquisition costs from 2015 of $1.8 million. The finalization of the transaction costs was completed in April 2016 when the last of the invoices was received and settled.
 
Included within the 2015 charge of $16.1 million is a loan to a subsidiary (NA Schools Limited) of $14.5 million which was written off. A charge has been recognized through the profit and loss as a result of the de-recognition of the financial asset.
 
In 2014, the exceptional charges of $35.0 million relates to the Initial Public Offering and the extinguishment of the 8.5% Senior PIK toggle notes due 2018.
 
32d       Finance expense
 
The amount is an interest payable to a subsidiary.
 
32e       Contingent liabilities
 
The Company had no contingent liabilities at August 31, 2016 (2015 - $nil, 2014 - $nil).
 
32f       Operating leases
 
The Company had no operating leases at August 31, 2016 (2015 - $nil, 2014 - $nil).
 
32g       Capital commitments
 
The Company had no capital commitments at August 31, 2016 (2015 - $nil, 2014 - $nil).
 
32h       Related party transactions
 
There are no related party transactions other than those disclosed in the Group accounts. Under IAS 24 — Related party disclosures, the Company is exempt from disclosing transactions within wholly-owned subsidiaries.
 
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Table of Contents
 
Notes to the parent company financial statements (continued)
 
32                         Parent company financial information (continued)
 
32i        Supplemental information
 
The following reconciliations are provided as additional information to satisfy the schedule 1 SEC requirements for parent-only financial information.

 	 	2014	 	2015	 	2016	 	
Year ended August 31	 	$m	 	$m	 	$m	 	
 	 	 	 	 	 	 	 	
IFRS profit/(loss) reconciliation	 	 	 	 	 	 	 	
Parent only — IFRS profit/(loss) for the period	 	(48.4	)	(20.6	)	0.3	 	
Additional profit/(loss) if subsidiaries had been accounted for on the equity method of accounting as opposed to cost	 	(41.8	)	27.1	 	46.8	 	
 	 	 	 	 	 	 	 	
Consolidated IFRS profit/(loss) for the period	 	(90.2	)	6.5	 	47.1	 	
 	 	 	 	 	 	 	 	
IFRS equity reconciliation	 	 	 	 	 	 	 	
Parent only — IFRS equity	 	418.6	 	536.1	 	549.3	 	
Additional loss if subsidiaries had been accounted for on the equity method of accounting as opposed cost	 	(226.0	)	(259.0	)	(262.8	)	
 	 	 	 	 	 	 	 	
 	 	192.6	 	277.1	 	286.5	 	
 
F- 120 

Exhibit 12.1
 
Certification by the Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
I, Andrew Fitzmaurice, certify that:
 
1.                                       I have reviewed this annual report on Form 20-F of Nord Anglia Education, Inc.;
 
2.                                       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and
 
3.                                       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report.
 
Date:  June 9, 2017

By:	/s/ Andrew Fitzmaurice	 	
 	Name: Andrew Fitzmaurice	 	
 	Title: Chief Executive Officer	 	

Exhibit 12.2
 
Certification by the Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
I, Graeme Halder, certify that:
 
1.                                       I have reviewed this annual report on Form 20-F of Nord Anglia Education, Inc.;
 
2.                                       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and
 
3.                                       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report.
 
Date:   June 9, 2017

By:	/s/ Graeme Halder	 	
 	Name:	Graeme Halder	 	
 	Title:	Chief Financial Officer	 	

Exhibit 13.1
 
Certification by the Chief Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
In connection with the annual report of Nord Anglia Education, Inc. (the “Company”) on Form 20-F for the fiscal year ended August 31, 2016 initially filed with the Securities and Exchange Commission on November 29, 2016, as amended by Amendment No. 1 on Form 20-F/A filed on the date hereof (the “Report”), I, Andrew Fitzmaurice, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
(1)                                  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)                                  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:     June 9, 2017

By:	/s/ Andrew Fitzmaurice	 	
 	Name:	Andrew Fitzmaurice	 	
 	Title:	Chief Executive Officer	 	

Exhibit 13.2
 
Certification by the Chief Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
In connection with the annual report of Nord Anglia Education, Inc. (the “Company”) on Form 20-F for the fiscal year ended August 31, 2016 initially filed with the Securities and Exchange Commission on November 29, 2016, as amended by Amendment No. 1 on Form 20-F/A filed on the date hereof (the “Report”), I, Graeme Halder, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
 
(1)                                  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
(2)                                  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:    June 9, 2017

By:	/s/ Graeme Halder	 	
 	Name:	Graeme Halder	 	
 	Title:	Chief Financial Officer	 	

Exhibit 15.1

		
 
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-195020) and on Form F-3 (No. 333-204586) of Nord Anglia Education, Inc. of our report dated November 29, 2016, except for Note 29(i) as to which the date is June 9, 2017, relating to the financial statements, which appears in this Form 20-F/A.
 
/s/PricewaterhouseCoopers
Hong Kong
June 9, 2017
 
PricewaterhouseCoopers 22/F Prince’s Building, Central, Hong Kong
T +852 2289 8888, F +852 2810 9888, www.pwchk.com