• Step 3: Determine the transaction price

• Step 4: Allocate the transaction price to the performance obligationsi n the contract

• Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

The Group recognises revenue when (or as) a performance obligationi s satisfied, i.e. when “control” of the services underlying the particular performance obligationi s transferred to customers.

If control of the services transfers over time, revenuei s recognised over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenuei s recognised at a point in time when the customer obtains control of the services. The Group recognises revenue when the specific criteria have been met for the following activities:

Tuition and boarding fees received from students are generally paidi n advance prior to the beginning of each academic year, and are initially recorded as contract liabilities. Tuition and boarding fees are recognised proportionately over the periods of the applicable programme. The portion of tuition and boarding payments received from students but not earnedi s recorded as a contract liability andi s reflected as a current liability as such amounts represent revenue that the Group expects to earn within one year. The academic year of the Group’s schoolsi s generally from September to August of the following year.

Tuition fees from the provision of other education services to students are collectedi n advance on a lump sum basis. Revenuei s recognised proportionately over the periods of the applicable programme.

The Group does not expect to have any contracts where the period between the transfer of the promised services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

# Other income

Rental incomei s recognised on a time proportion basis over thel ease terms.

Interest income from a financial asset is recognised on an accrual basis using the effectivei nterest method by applying the rate that exactly discounts the estimated future cash receipts over the expectedl ife of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.

# Employee benefits

# Pension scheme

The employees of the Group’s subsidiaries which operatei n Mainland China are required to participate in a central pension scheme operated by thel ocal municipal government. The subsidiaries operatingi n Mainland China are required to contribute certain percentage of their payroll costs to the central pension scheme. The contributions are charged to profit or loss as they become payablei n accordance with the rules of the central pension scheme.

# Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the

assets are substantially 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 capitalised. All other borrowing costs are expensedi n the periodi n which they arei ncurred. Borrowing costs consist of interest and other costs that an entityi ncursi n connection with the borrowing of funds.

# Dividends

Final dividends are recognised as al iability when they are approved by the shareholdersi n a general meeting. Proposed final dividends are disclosedi n the notes to the Historical Financial Information.

Interim dividends are simultaneously proposed and declared, because the Company’s memorandum and articles of association grant the directors the authority to declarei nterim dividends. Consequently, interim dividends are recognisedi mmediately as al iability when they are proposed and declared.

# Foreign currencies

The Historical Financial Informationi s presentedi n RMB. Each entityi n the Group determinesi ts own functional currency andi temsi ncludedi n the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded by the entitiesi n the Group arei nitially recorded using their respective functional currency rates prevailing at the dates of the transactions. Monetary assets andl iabilities denominatedi n foreign currencies are translated at the functional currency rates of exchange ruling at the end of each of the Relevant Periods. Differences arising on settlement or translation of monetary items are recognisedi n profit orl oss.

Non-monetaryi tems that are measuredi n terms of historical cost in a foreign currency are translated using the exchange rates at the dates of thei nitial transactions. Non-monetaryi tems measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of a non-monetaryi tem measured at fair valuei s treatedi nl ine with the recognition of the gain or loss on changei n fair value of thei tem (i.e., translation difference on thei tem whose fair value gain orl ossi s recognisedi n other comprehensivei ncome or profit orl ossi s also recognised in other comprehensivei ncome or profit orl oss, respectively).

In determining the exchange rate oni nitial recognition of the related asset, expense or income on the derecognition of a non-monetary asset or non-monetaryl iability relating to an advance consideration, the date of initial transactioni s the date on which the Groupi nitially recognises the non-monetary asset or non-monetaryl iability arising from the advance consideration. If there are multiple payments or receiptsi n advance, the Group determines the transaction date for each payment or receipt of the advance consideration.

The functional currencies of certain overseas subsidiaries are currencies other than the RMB. As at the end of each of the Relevant Periods, the assets andl iabilities of these entities are translatedi nto RMB at the exchange rates prevailing at the end of each of the Relevant Periods and their statements of profit or loss and other comprehensivei ncome are translatedi nto RMB at the weighted average exchange rates for the year.

The resulting exchange differences are recognisedi n other comprehensivei ncome and accumulatedi n the exchange fluctuation reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operationi s recognisedi n profit orl oss.

# 3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

The preparation of the Historical Financial Information requires management to makej udgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets andl iabilities, and their accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets orl iabilities affected in the future.