Table of Contents

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

 

----

 

**FORM 20-F**

 

----

 

**(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, 2015** |
| ** ** | ** **                                                                                                                                                 |
| **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) |

 

----

Table of Contents

 

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.
|   | 104,091,367   ordinary shares, par value $0.01 per share, as of August 31, 2015. |
|--------|----------------------------------------------------------------------------------|

 

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, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

| Large accelerated filer o |   | Accelerated filer x |   | Non-accelerated filer o |
|---------------------------|--------|---------------------|--------|-------------------------|

 

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

 

----

Table of Contents

 

**TABLE OF CONTENTS**

 

| IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY |   | ii                                                                             |
|--------------------------------------------------|--------|--------------------------------------------------------------------------------|
|                                             |   |                                                                           |
| FORWARD-LOOKING STATEMENTS                       |   | ii                                                                             |
|                                             |   |                                                                           |   |   |
| PART I                                      |   |                                                                           |   | 1 |
| Item   1.                                        |   | Identity   of Directors, Senior Management and Advisers                        |   | 1 |
| Item   2.                                        |   | Offer   Statistics and Expected Timetable                                      |   | 1 |
| Item   3.                                        |   | Key   Information                                                              |   | 1 |
| Item   4.                                        |   | Information   on the Company                                                   |   | 21 |
| Item   4A.                                       |   | Unresolved   Staff Comments                                                    |   | 53 |
| Item   5.                                        |   | Operating   and Financial Review and Prospects                                 |   | 53 |
| Item   6.                                        |   | Directors,   Senior Management and Employees                                   |   | 71 |
| Item   7.                                        |   | Major   Shareholders and Related Party Transactions                            |   | 81 |
| Item   8.                                        |   | Financial   Information                                                        |   | 81 |
| Item   9.                                        |   | The   Offer and Listing                                                        |   | 81 |
| Item   10.                                       |   | Additional   Information                                                       |   | 82 |
| Item   11.                                       |   | Quantitative   and Qualitative Disclosures About Market Risk                   |   | 92 |
| Item   12.                                       |   | Description   of Securities Other than Equity Securities                       |   | 92 |
|                                             |   |                                                                           |   |   |
| PART II                                     |   |                                                                           |   | 93 |
| Item   13.                                       |   | Defaults,   Dividend Arrearages and Delinquencies                              |   | 93 |
| Item   14.                                       |   | Material   Modifications to the Rights of Security Holders and Use of Proceeds |   | 93 |
| Item   15.                                       |   | Controls   and Procedures                                                      |   | 93 |
| Item   16A.                                      |   | Audit   Committee Financial Expert                                             |   | 94 |
| Item   16B.                                      |   | Code   of Ethics                                                               |   | 94 |
| Item   16C.                                      |   | Principal   Accountant Fees and Services                                       |   | 94 |
| Item   16D.                                      |   | Exemptions   from the Listing Standards for Audit Committees                   |   | 95 |
| Item   16E.                                      |   | Purchases   of Equity Securities by the Issuer and Affiliated Purchasers       |   | 95 |
| Item   16F.                                      |   | Change   in Registrant’s Certifying Accountant                            |   | 95 |
| Item   16G.                                      |   | Corporate   Governance                                                         |   | 95 |
| Item   16H.                                      |   | Mine   Safety Disclosure                                                       |   | 95 |
|                                             |   |                                                                           |   |   |
| PART III                                    |   |                                                                           |   | 95 |
| Item   17.                                       |   | Financial   Statements                                                         |   | 95 |
| Item   18.                                       |   | Financial   Statements                                                         |   | 95 |
| Item   19.                                       |   | Exhibits                                                                       |   | 96 |

 

i

----

Table of Contents

** **

**IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY**

 

We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).  An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies.  We may take advantage of these provisions until August 31, 2019 or such earlier time that we are no longer an emerging growth company.  We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our ordinary shares held by non-affiliates as of the last business day of our most recently completed second fiscal quarter, or issue more than $1.0 billion of non-convertible debt over a three-year period.

 

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued by the Financial Accounting Standards Board until those standards apply to private companies.  We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards.  Because we prepare our financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), accounting standards issued by the Financial Accounting Stands Board will not apply to us unless we adopt U.S. generally accepted accounting principles in place of IFRS or present a reconciliation of our financial statements to U.S. generally accepted accounting principles.

 

**FORWARD-LOOKING STATEMENTS**

 

This annual report includes statements that express our current opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”).  The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act.  These forward looking statements can generally be identified by the use of forward-looking terminology, including the terms “believe,” “expect,” “may,” “will,” “should,” “seek,” “project,” “approximately,” “intend,” “plan,” “estimate” or “anticipate,” or, in each case, their negatives or other variations or comparable terminology.  These forward-looking statements include all matters that are not historical facts.  They appear in a number of places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.

 

By their nature, forward-looking statements relate to events that involve risks and uncertainties or that depend on circumstances that may or may not occur in the future.  These statements include, among other things, statements relating to:

 

·                  our future market opportunities;

 

·                  our goals and strategies;

 

·                  our competitive strengths;

 

·                  our future results of operations and financial condition;

 

·                  our future business developments; and

 

·                  our acquisition and expansion strategy.

 

Although we base these forward-looking statements on assumptions that we believe are reasonable when made, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this quarterly report.  In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods.

 

Given these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements.  Any forward-looking statement that we make in this report speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments.

 

Other sections of this annual report include additional factors that could adversely impact our business and financial performance, principally “Item 3. Key Information—D. Risk Factors.”  Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.  We qualify all of our forward-looking statements by these cautionary statements.

 

ii

----

Table of Contents

 

**PART I**

 

**Item 1.**                                           **Identity of Directors, Senior Management and Advisers**

 

Not Applicable.

 

**Item 2.**                                           **Offer Statistics and Expected Timetable**

 

Not Applicable.

 

**Item 3.**                                           **Key Information**

 

A.                                                            Selected Financial Data

 

The following selected financial data for and as of the years ended August 31, 2013, 2014 and 2015 have been derived from our audited consolidated financial statements included in this annual report. In preparing our financial statements for the year ended August 31, 2015, we changed our accounting policy for expenses in respect of premium school land and building operating leases and depreciation charges arising from tangible assets owned by premium schools. These expenses are now treated as a direct cost and are included in cost of sales, instead of selling and administrative expenses as previously recorded. We have also adopted amendments to International Accounting Standards that are more fully described in Note 1 to our audited financial statements included elsewhere in this annual report. Financial information for and as of the years ended August 31, 2013 and 2014 have been retrospectively adjusted to reflect these changes in accounting policies.

 

The following selected consolidated income statement data for the years ended August 31, 2011 and 2012 and consolidated balance sheet data as of August 31, 2012 have been derived from our consolidated financial statements not included in this annual report, as retrospectively adjusted to reflect the changes in accounting policies described above.

 

The selected financial data presented in the tables below should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements and accompanying notes.  Our consolidated financial statements have been prepared in accordance with IFRS.

 

***Consolidated Income Statement Data:***

 
| ** **                                           | ** ** | **Year Ended August 31,**                                               | ** ** |
|------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|
| ** **                                           | ** ** | **2011**                                                                               | ** ** | **2012** | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
| ** **                                           | ** ** | **(unaudited)**                                                                        | ** ** | **(unaudited)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                           | ** ** | **(in millions of dollars, except per share data)** | ** ** |
|                                                 |       |                                                                                   |       |   |   |   |   |   |   |   |   |
| Revenue                                              |       | 225.2                                                                                  |       | 274.4 |   | 323.7 |   | 474.6 |   | 577.0 |   |
| Cost of sales                                        |       | (131.9                                                                                 | )          | (162.4 | ) | (190.4 | ) | (280.3 | ) | (355.9 | ) |
| **Gross   profit**                                   |       | **93.3**                                                                               |       | **112.0** |   | **133.3** |   | **194.3** |   | **221.1** |   |
| Selling, general   and administrative expenses       |       | (57.8                                                                                  | )          | (58.3 | ) | (64.5 | ) | (92.9 | ) | (127.0 | ) |
| Depreciation                                         |       | (0.6                                                                                   | )          | (0.3 | ) | (0.4 | ) | (2.0 | ) | (0.7 | ) |
| Amortization                                         |       | (2.8                                                                                   | )          | (3.5 | ) | (5.7 | ) | (10.4 | ) | (13.9 | ) |
| Impairment of   Goodwill                             |       | (16.7                                                                                  | )          | (10.7 | ) | — |   | — |   | — |   |
| Other losses                                         |       | —                                                                                 |       | — |   | — |   | — |   | (3.0 | ) |
| Exceptional   expenses                               |       | (9.4                                                                                   | )          | (12.5 | ) | (17.7 | ) | (100.2 | ) | (18.8 | ) |
| **Total   expenses**                                 |       | **(87.3**                                                                              | **)**      | **(85.3** | **)** | **(88.3** | **)** | **(205.5** | **)** | **(163.4** | **)** |
| **Operating   profit/(loss)**                        |       | **6.0**                                                                                |       | **26.7** |   | **45.0** |   | **(11.2** | **)** | **57.7** |   |
| Finance income                                       |       | 10.1                                                                                   |       | 2.0 |   | 2.3 |   | 2.0 |   | 2.8 |   |
| Finance expense                                      |       | (51.7                                                                                  | )          | (49.7 | ) | (51.3 | ) | (55.5 | ) | (39.7 | ) |
| **Net   finance expense**                            |       | **(41.6**                                                                              | **)**      | **(47.7** | **)** | **(49.0** | **)** | **(53.5** | **)** | **(36.9** | **)** |
| (Loss)/profit   before income tax                    |       | (35.6                                                                                  | )          | (21.0 | ) | (4.0 | ) | (64.7 | ) | 20.8 |   |
| Income tax   expense                                 |       | (12.5                                                                                  | )          | (16.4 | ) | (19.3 | ) | (25.7 | ) | (12.2 | ) |
| (Loss)/profit   after income tax                     |       | (48.1                                                                                  | )          | (37.4 | ) | (23.3 | ) | (90.4 | ) | 8.6 |   |
| (Loss)/profit   attributable to:                     |       |                                                                                   |       |   |   |   |   |   |   |   |   |
| - Owners of the   parent                             |       | (48.1                                                                                  | )          | (37.4 | ) | (23.3 | ) | (90.4 | ) | 7.4 |   |
| -   Non-controlling interest                         |       | —                                                                                 |       | — |   | — |   | — |   | 1.2 |   |
| **(Loss)/profit   for the period**                   |       | **(48.1**                                                                              | **)**      | **(37.4** | **)** | **(23.3** | **)** | **(90.4** | **)** | **8.6** |   |
| Earnings per   ordinary share(1) (in   dollars) |       |                                                                                   |       |   |   |   |   |   |   |   |   |
| Basic                                                |       | (0.65                                                                                  | )          | (0.52 | ) | (0.34 | ) | (1.07 | ) | 0.07 |   |
| Diluted                                              |       | (0.65                                                                                  | )          | (0.52 | ) | (0.34 | ) | (1.07 | ) | 0.07 |   |

 

----

(1)                                 Earnings per ordinary share is calculated by dividing (loss)/profit for the period by the weighted average ordinary shares outstanding for the period.  For the fiscal years 2011, 2012 and 2013 the basic and diluted weighted average ordinary shares outstanding were 74.0 million ordinary shares. On completion of our initial public offering on March 31, 2014, we issued 21.8 million ordinary shares and all previously existing preference shares and classes of ordinary shares were converted into 75.9 million ordinary shares of par value $0.01 per share. For the year ended August 31, 2014, the basic and diluted weighted average ordinary shares outstanding were 85.1 million ordinary shares.  For the year ended August 31, 2015, the basic and diluted weighted average ordinary shares outstanding were 99.4 million and 99.5 million, respectively.

 

1

----

Table of Contents

 

***Consolidated Balance Sheet Data:***

 
| ** **                                                | ** ** | **As of August 31,**         | ** ** |
|-----------------------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                                | ** ** | **2012**                                    | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
| ** **                                                | ** ** | **(unaudited)**                             | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                | ** ** | **(in millions of dollars)** | ** ** |
| **Non-current   assets**                                  |       |                                        |       |   |   |   |   |   |   |
| Property, plant   and equipment                           |       | 36.1                                        |       | 98.2 |   | 140.1 |   | 449.7 |   |
| Intangible   assets                                       |       | 455.1                                       |       | 763.4 |   | 801.5 |   | 1,415.5 |   |
| Investments in   joint ventures and associates            |       | 0.5                                         |       | 0.5 |   | 0.5 |   | 0.5 |   |
| Trade and other   receivables                             |       | 10.9                                        |       | 12.4 |   | 9.2 |   | 37.9 |   |
| Deferred tax   assets                                     |       | 6.1                                         |       | 21.2 |   | 20.9 |   | 70.4 |   |
|                                                      |       | **508.7**                                   |       | **895.7** |   | **972.2** |   | **1,974.0** |   |
| **Current   assets**                                      |       |                                        |       |   |   |   |   |   |   |
| Current tax   assets                                      |       | 0.3                                         |       | 1.0 |   | 1.6 |   | 1.2 |   |
| Trade and other   receivables                             |       | 49.3                                        |       | 83.2 |   | 94.8 |   | 131.1 |   |
| Cash and cash   equivalents (excluding bank overdrafts)   |       | 167.6                                       |       | 222.9 |   | 256.4 |   | 317.0 |   |
|                                                      |       | **217.2**                                   |       | **307.1** |   | **352.8** |   | **449.3** |   |
| **Total   assets**                                        |       | **725.9**                                   |       | **1,202.8** |   | **1,325.0** |   | **2,423.3** |   |
| **Current   liabilities**                                 |       |                                        |       |   |   |   |   |   |   |
| Trade and other   payables                                |       | (62.3                                       | )          | (96.8 | ) | (63.7 | ) | (170.9 | ) |
| Interest-bearing   loans and borrowings                   |       | (80.9                                       | )          | (82.4 | ) | (113.4 | ) | (98.3 | ) |
| Finance lease   liabilities                               |       | —                                      |       | (0.0 | ) | (0.0 | ) | (3.7 | ) |
| Deferred revenue                                          |       | (162.1                                      | )          | (267.2 | ) | (324.0 | ) | (518.8 | ) |
| Provisions for   other liabilities and charges            |       | (3.1                                        | )          | (3.6 | ) | (0.5 | ) | (0.0 | ) |
| Current tax   liabilities                                 |       | (5.0                                        | )          | (4.2 | ) | (1.7 | ) | (2.9 | ) |
|                                                      |       | **(313.4**                                  | **)**      | **(454.2** | **)** | **(503.3** | **)** | **(794.6** | **)** |
| **Non-current   liabilities**                             |       |                                        |       |   |   |   |   |   |   |
| Interest-bearing   loans and borrowings                   |       | (318.9                                      | )          | (630.4 | ) | (499.2 | ) | (1,066.3 | ) |
| Derivative   financial instruments                        |       | *—*                                    |       | — |   | — |   | (3.0 | ) |
| Finance lease   liabilities                               |       | *—*                                    |       | — |   | — |   | (44.6 | ) |
| Other payables                                            |       | (6.6                                        | )          | (38.5 | ) | (50.7 | ) | (45.7 | ) |
| Deferred revenue                                          |       | —                                      |       | — |   | (8.6 | ) | (27.4 | ) |
| Retirement   benefit obligations                          |       | (30.4                                       | )          | (22.2 | ) | (25.8 | ) | (46.6 | ) |
| Provisions for   other liabilities and charges            |       | (2.3                                        | )          | (2.2 | ) | (1.2 | ) | (1.7 | ) |
| Deferred tax   liabilities                                |       | (10.5                                       | )          | (35.3 | ) | (45.5 | ) | (114.1 | ) |
|                                                      |       | **(368.7**                                  | **)**      | **(728.6** | **)** | **(631.0** | **)** | **(1,349.4** | **)** |
| **Total   liabilities**                                   |       | **(682.1**                                  | **)**      | **(1,182.8** | **)** | **(1,134.3** | **)** | **(2,144.0** | **)** |
| **Net   assets**                                          |       | **43.8**                                    |       | **20.0** |   | **190.7** |   | **279.3** |   |
| **Equity   attributable to equity holders of the parent** |       |                                        |       |   |   |   |   |   |   |
| Share capital                                             |       | 67.5                                        |       | 67.5 |   | 1.0 |   | 1.0 |   |
| Share premium                                             |       | 255.2                                       |       | 256.5 |   | 597.1 |   | 735.2 |   |
| Other reserves                                            |       | 6.9                                         |       | 6.9 |   | 6.9 |   | 6.9 |   |
| Currency   translation reserve                            |       | (0.1                                        | )          | 9.8 |   | (1.1 | ) | (53.7 | ) |
| Shareholder   deficit                                     |       | (285.7                                      | )          | (320.7 | ) | (413.2 | ) | (414.0 | ) |
| **Shareholders’   funds**                            |       | **43.8**                                    |       | **20.0** |   | **190.7** |   | **275.4** |   |
| **Non-controlling   interest**                            |       | **—**                                  |       | — |   | — |   | **3.9** |   |
|                                                      |       | **43.8**                                    |       | **20.0** |   | **190.7** |   | **279.3** |   |

 

B.                                                                      Capitalization and Indebtedness

 

Not Applicable.

 

C.                                                                      Reasons for the Offer and Use of Proceeds

 

Not Applicable.

 

2

----

Table of Contents

 

D.                                                                      Risk Factors

 

An investment in our ordinary shares involves significant risks.  You should carefully consider the risks described below as well as the other information in this annual report, including our consolidated financial statements and related notes, before you decide to buy our ordinary shares.  If any of the following risks materializes, our business, prospects, financial condition and results of operations could be materially harmed, the trading price of our ordinary shares could decline and you could lose all or part of your investment.

 

**Risks Related to Our Business**

 

***Adverse changes in key industry drivers may reduce demand for our schools.***

 

We believe that the key industry drivers for our schools include:

 

·                  globalization and increasing foreign direct investment (“FDI”); and

 

·                  a growing emphasis by parents on high-quality education for their children.

 

Changes in our key industry drivers may materially adversely affect our business, prospects, results of operations and financial condition.  For example, if FDI stock declines in one of the countries in which we operate, the number of expatriate families in that country may decrease, which could reduce demand for our schools.  During the 2009/2010 academic year, attracting new students was more difficult than in previous and subsequent academic years, which we believe was due in part to the 2008 global financial crisis.  Furthermore, as some of the emerging markets in which we operate reach a higher level of economic development and develop a more skilled local workforce, companies could increasingly rely on the local workforce and employ fewer expatriates, which could reduce our business if we are unable to adapt or attract local students.

 

In addition, we believe that growth of GDP and individual disposable income in emerging markets tends to increase demand from local families, as they increase their focus and spending on premium quality education. Accordingly, decreases or limited growth in GDP or disposable income may reduce demand for our schools from local families and limit our ability to recruit and retain local students.

 

***Competition in the premium school market could reduce enrollments, increase our cost of recruiting and retaining students and teachers and put downward pressure on our tuition fees and profitability.***

 

We face competition from other schools in the locations in which we operate that target the children of expatriate and affluent local families.  Some of our existing and future competitors may be able to devote greater resources than we can to the development and construction of schools offering premium quality education and respond more quickly to changes in parents’ demands, admissions standards, market needs or new technologies.  Moreover, our competitors may increase capacity in any of our markets to an extent that leads to an over-supply.

 

If we are unable to differentiate our schools from those of our competitors and successfully market our schools to parents and students, we could face competitive pressures that reduce enrollment.  If our enrollment falls, we may be required to reduce our tuition fees or increase spending in order to attract and retain students, which could materially adversely affect our business, prospects, results of operations and financial condition.  See “Item 4. Information on the Company—B. Business Overview—Competition.”

 

***If we fail to increase or maintain our tuition fees, our financial performance may suffer.***

 

Tuition fees at our schools are among the highest in their markets.  Factors that could affect our ability to increase or maintain our premium tuition fees include:

 

·                  a decline in our reputation for quality;

 

·                  resistance to tuition fee increases from parents and expatriates’ employers as a result of difficult economic conditions or fee increases in recent academic years;

 

·                  pricing pressure from other premium schools in our markets; and

 

·                  government restrictions that limit our ability to increase tuition fees, such as those to which our schools in Qatar, Dubai and Abu Dhabi are subject (see “Item 4. Information on the Company—B. Business Overview—Regulation”).

 

3

----

Table of Contents

 

In addition, changes in expatriate compensation and benefits packages that alter the way in which employers pay for tuition fees may negatively affect our ability to increase or maintain our tuition fees.  For example, if employers were to increasingly rely on cost of living adjustments in the form of lump sum payments in cash to expatriate parents rather than paying tuition fees directly, parents may become more price sensitive to tuition fees.  Our inability to increase or maintain our tuition fees could materially adversely affect our business, prospects, financial condition and results of operations.

 

***Any damage to the reputation of any of our schools may adversely affect our overall business, prospects, results of operations and financial condition.***

 

Our reputation could be adversely affected under many circumstances, including the following:

 

·                  members of our staff behave or are perceived to behave inappropriately or illegally;

 

·                  members of our staff fail to appropriately supervise children under their care;

 

·                  we fail to properly deal with an accident or other event that injures our students;

 

·                  we fail to conduct proper checks on members of our staff who come into contact with children and young adults;

 

·                  accidents, epidemics or other events adversely affect our students;

 

·                  our students engage in inappropriate or illegal conduct;

 

·                  we fail to obtain or lose a license, permit, accreditation or other authorization to operate a school;

 

·                  poor-quality operators use names that create confusion with our schools or fraudulently use our brand name or the name of one of our schools;

 

·                  we do not maintain consistent teaching quality or fail to deliver strong academic results;

 

·                  the curricula in our schools are not perceived as being sufficiently high quality;

 

·                  our school facilities do not meet the standards expected by parents and students of premium schools;

 

·                  we close one or more of our schools; and

 

·                  we become subject to litigation or other legal proceedings relating to any of the above or other matters.

 

The likelihood that any of the foregoing occurs increases as we expand our network of schools.  These events could influence the way our schools are viewed not only by students and parents, but also by other constituencies in the education sector and the general public.  Moreover, an event that directly damages the reputation of one of our schools could adversely affect the reputation and operations of our other schools.  If our reputation declines, our overall business, prospects, results of operations and financial condition could be harmed.

 

***If we fail to enroll new students and re-enroll existing students, our financial performance may suffer.***

 

Increasing enrollments in our schools is critical to our financial performance.  In our experience, approximately 28% of our students leave our schools each academic year, primarily due to expatriate relocations and graduation.  If our recruitment efforts fail to increase enrollment or replace departing students, our financial performance may suffer.  In addition, if we fail to maintain our quality of education, parents may choose not to re-enroll their children in our schools.  If we are unable to recruit and retain students, our business, prospects, results of operations and financial condition (including working capital and cash flow) could be materially adversely affected.

 

4

----

Table of Contents

 

***We may lose accreditations or permits that we require to operate our schools.***

 

In order to operate our schools, we maintain various accreditations from curriculum providers and permits from examination bodies, such as the International Baccalaureate Organization.  To maintain our accreditations and permits, we must meet standards related to, among other things, performance, governance, institutional integrity, educational quality, staff, administrative capability, resources and financial stability.  If any of our schools fails to meet these standards, it could lose its accreditations or permits, which could materially adversely affect our business, prospects, results of operations and financial condition.

 

***We may be unable to recruit, train and retain qualified and experienced principals and teaching staff.***

 

The process of hiring employees with the combination of skills and attributes required to implement our business strategy can be difficult and time-consuming.  Our school principals in particular are key to the success of their schools.  We face competition in attracting and retaining principals and teachers who possess the necessary experience and accreditation to teach at our schools.  We may find it difficult to recruit principals and teachers who are willing to relocate to some of our international locations, and we must provide competitive compensation packages to attract and retain qualified individuals.  Some of our principals and teachers remain at their school only for a limited time, which could affect our reputation in the market if we provide insufficient continuity.  As we expand and add personnel, it may be difficult to maintain consistency in the quality of our principals and teachers.  If we are unable to, or are perceived to be unable to, attract and retain experienced and qualified principals and teachers, our business, prospects, results of operations and financial condition may be materially adversely affected.

 

***We may lose the services of members of our senior management team.***

 

Our success depends in part on the continued skills, efforts and motivation of our officers and senior management team.  We have in the past, and may in the future, experience changes in our senior management for a variety of reasons, including restructuring, medical problems, retirement and resignations.  In addition, key personnel could leave us to join our competitors.  Losing the services of key members of senior management or experienced personnel may be disruptive and cause uncertainty.  We depend upon the services of our executive committee members and other members of our management team who have significant experience with our company and within the education industry.  If one or more members of our senior management team or key personnel are unable or unwilling to continue in their present positions, including for health, family or other personal reasons, we may not be able to replace them easily or at all.  Our inability to attract and retain qualified senior managers or key personnel in a timely manner could materially adversely affect our business, prospects, results of operations and financial condition.

 

***We may be unable to manage our current operations and future growth.***

 

Our recent significant growth may strain our ability to manage our operations and integrate our acquisitions.  During fiscal 2014 and 2015, we acquired 12 new schools, 7 of which are in jurisdictions in which we had not previously operated schools— Singapore, Cambodia, Vietnam and Mexico.

 

Acquiring or developing greenfield schools entails significant risks, including the following:

 

·                  we may be unable to integrate acquired schools into our network or achieve expected cost savings or synergies from acquisitions without disrupting our operations or diverting management’s attention or at all;

 

·                  we may incorrectly evaluate the financial performance or potential of our acquisitions or greenfield developments or schools we acquire may have insufficient financial or operational resources;

 

·                  we may be unable to successfully integrate and retain an acquired school’s principal, teachers and other employees or adequately staff greenfield schools;

 

·                  our use of cash to pay for acquisitions limits other potential uses of our cash and may deplete our cash reserves;

 

·                  acquisitions may require substantial new capital, either by the issuance of debt or equity, and we may not be able to access the capital or loan markets or obtain new capital on terms acceptable to us, or at all. Increases in our level of indebtedness resulting from acquisitions may have significant implications for our future business and operations. See “—Risks Related to our Debt;”

 

·                  the development of greenfield projects may be delayed as a result of many factors, such as delays in obtaining government approvals or licenses, delays in acquiring possession of the project site, shortage of key supplies and skilled labor, construction accidents, natural catastrophes and adverse weather conditions, some of which are beyond our control;

 

·      cost overruns;

 

·      resistance from parents, teachers or administrators to an acquisition could reduce its value; and

 

·      we may incur write-offs, impairment charges, amortization expenses or other expenses related to goodwill and other intangible assets we record.

 

5

----

Table of Contents

 

These risks may increase when we expand into new countries or new cities in countries where we already operate.  Managing the growth of a geographically diverse business involves significant risks and challenges.  We may find it difficult to manage financial resources, implement uniform policies and standards and maintain our operational, management and technology systems across our global network.  New markets also pose challenges related to cultural differences and relationships with local education authorities.

 

If we are unable to manage our current operations, our growth strategy or the risks that we may encounter in expanding our operations into new markets, our business, prospects, results of operations and financial condition may be materially adversely affected.

 

***Acquisitions may expose us to liabilities.***

 

When we acquire a school, we may become subject to regulatory, licensing, litigation, tax and other liabilities based on circumstances we fail to discover in our due diligence review.  When we do discover potential liabilities during our due diligence review, neither the valuation adjustment nor the contractual protections we negotiate may be sufficient to fully protect us from losses.  Although we generally have rights to indemnification, our rights are limited by survival periods for bringing claims and limitations on the nature and amount of losses we may recover, and we cannot be certain that any indemnification will be collectible or sufficient in amount, scope or duration to fully offset any loss we may suffer.  For example, we estimate that we face potential tax liabilities of up to $4.9 million as a result of one of our acquisitions.  Although the seller indemnified us against tax liabilities, we cannot assure you that our estimate of our potential tax liability is accurate or that we would be able to recover the full amount of any potential losses.

 

***If we fail to obtain suitable sites for greenfield schools, increase capacity at existing schools or acquire new schools we may not be able to grow our business.***

 

Our growth strategies include developing greenfield schools, increasing capacity at our current schools and acquiring new schools.  We may be unable to find suitable greenfield sites in desirable locations in markets where we wish to build new schools or expand our operations.  Available sites may be too small for our capacity requirements, prohibitively expensive or subject to zoning restrictions that do not permit school facilities.  If we do locate suitable sites for new schools or to expand capacity at existing schools, we may be unable to finance acquisition, construction or other costs.  Similarly, we may be unable to find acquisition targets that satisfy our requirements for size, quality, location, price or other factors we consider important, and we may be unable to finance the acquisition of suitable targets that we do find.  If we fail to grow our business, our prospects, results of operations and financial condition may be materially adversely affected.

 

***If we are unable to upgrade our schools, they may become less attractive to parents and students and we may fail to grow our business.***

 

All of our schools require periodic upgrades to remain attractive to parents and students.  Upgrading the facilities at our schools could be difficult for a number of reasons, including the following:

 

·                  our properties may not have the capacity or configuration to accommodate proposed renovations;

 

·                  construction and other costs may be prohibitive;

 

·                  we may fail to obtain regulatory approvals;

 

·                  we may be unable to finance construction and other costs; and

 

·                  we may not be able to negotiate reasonable terms with our landlords or developers or complete the work within acceptable timeframes.

 

Our failure to upgrade the facilities of our schools could lead to lower enrollment and may materially adversely affect our business, prospects, results of operations and financial condition.

 

6

----

Table of Contents

 

***Some of the cities in which we operate schools may become less popular destinations for expatriates.***

 

Changing environmental, political and other factors could make cities in which we operate schools less attractive to expatriates.

 

For example, concerns about air quality in Beijing have been widely reported by international media.  Poor air quality may particularly concern parents with school-age children, who are generally perceived to be more vulnerable to air pollution than adults.  We have recently experienced slower enrollment growth at our schools in Beijing, and we believe this is partially the result of concerns about air pollution.  If air quality in Beijing fails to improve or deteriorates, the number of expatriates with school-age children may decline, which could reduce our enrollments or limit our ability to grow.

 

Political tensions could also make cities less attractive to expatriates.  For example, if protests begin to occur regularly or become more severe in one of the cities where we have schools, we could face enrollment pressures as expatriates leave the region.

 

***Our leases may be terminated or we may be unable to renew our leases on acceptable terms; if we wish to relocate, we may incur additional costs if we terminate a lease.***

 

Many of the buildings our schools occupy underwent renovations or were custom-built to meet our requirements.  If we are unable to renew a lease on acceptable terms or if a lease is terminated:

 

·                  we may be unable to find a new property with the amenities and in the location we require, which may force us to close the school or move to a less desirable location;

 

·                  we may incur significant costs in identifying, securing and moving to a new location; and

 

·                  the relocation may significantly disrupt the school’s operations and the school may be unable to collect tuition fees or retain its students.

 

Our school properties in Singapore, Hong Kong and China are leased from government authorities, which can terminate our leases at any time due to public purpose or need.  In some cases a third party may take actions that would interfere with our use of a leased property as a result of contractual arrangements between the third party and the lessor.

 

In addition, terminating any of our school leases could be costly.  Many of our leases do not contain break provisions that would permit us to terminate the lease prior to its expiration.  In the past, we found it difficult to obtain early termination of some of our leases.  If we wish to terminate a lease in order to relocate or close a school, we may be unable to negotiate satisfactory termination arrangements and could incur significant costs or liabilities under the lease, which could materially adversely affect our business, prospects, results of operations and financial condition.

 

***If our landlords do not perform their obligations under the terms of our leases or a landlord changes in the course of the lease, our operations could be disrupted and our costs could increase.***

 

A good working relationship with the landlords of our school properties is fundamental to the successful operation of our schools and can generate additional property development opportunities that support our growth.  In many cases, our landlords are responsible for the maintenance of all or part of the facilities we lease.  If our landlords do not maintain our facilities to the required standards, we may have to increase our expenditures to maintain the quality of our schools.  In addition, during the course of our lease, the landlord of one or more of our schools could change, for example due to its insolvency or the sale of the underlying property, and we may need to develop a relationship with a new contracting party.  The new landlord may have interests that conflict with ours, may be less willing to expand the school’s capacity or improve its facilities or be a less reliable counterparty in fulfilling its obligations under the terms of the lease.  If an existing landlord or a new landlord does not comply with the terms of our leases for any reason, our operations could be disrupted, our costs could increase and we may be required to close or relocate the affected school, which could materially adversely affect our business, prospects, results of operations and financial condition.

 

***If we sell or close a school we may not achieve anticipated cost savings or other benefits and could remain liable for events that occurred while we operated the school.***

 

If we sell or close a school, we may not achieve anticipated cost savings or other benefits.  We could be subject to claims by the new owner, parents and educational authorities for financial liabilities related to our previous operation of the school and could be subject to unforeseen liabilities.  The reputation of some or all of our remaining schools may also suffer in the event we close one of our schools.  In addition, if a new owner does not operate the school to a high standard, our reputation could suffer by association, even though we no longer have any control over the operations of the school, which could damage our reputation.  As a result, selling or closing a school could materially adversely affect our business, prospects, results of operations and financial condition.

 

7

----

Table of Contents

 

***Any change in the timing of tuition fee payments could create cash flow issues for us.***

 

We collect most of our tuition fees before the beginning of the first term of the academic year and more than half of the remainder before the beginning of the second and third terms of the academic year.  If regulations in new markets, new regulations in existing markets or changing market conditions require us to collect our fees more evenly over the course of the academic year, our cash flow may be negatively affected and we may require additional working capital or third-party funding to finance our operations.

 

***We may not have adequate protection for our intellectual property, and we may infringe upon the intellectual property of others.***

 

In most of the markets where we operate schools, we do not have trademark protection for the brand names under which the schools operate.  As a result, we may need to spend significant resources in legal proceedings if other organizations improperly use a similar school name.  We rely on trademark protection in selected jurisdictions to protect our rights to the mark “Nord Anglia,” our distinctive logos and other marks associated with our services.  We cannot assure you that these measures will be adequate, that we have secured, or will be able to secure, appropriate protection for all of our proprietary rights in selected jurisdictions or that third parties will not infringe upon or misappropriate our trademark and brand name. In particular, in some new jurisdictions in which we operate, e.g. Cambodia, Singapore and Vietnam, we have submitted trademark applications but there is no guarantee that they can be successfully registered.  Policing the unauthorized use of our trademarks and brand names can be difficult and expensive, and litigation may be necessary to enforce or protect our brand name or determine the validity and scope of the proprietary rights of others.  We may not prevail in any intellectual property litigation and a favorable outcome may not be adequate to protect our rights.  In addition, third parties may accuse us of infringing their intellectual property.  Third-party intellectual property rights may be extremely broad and it may not be possible for us to conduct our operations without infringing those intellectual property rights.

 

***We could incur significant defense costs and losses in litigation or other legal proceedings and may become liable for the legal costs of the adverse party.***

 

From time to time, we are party to legal proceedings in the various jurisdictions in which we operate.  Litigation can be costly and time-consuming and may divert management attention and resources from our operations.  We could incur significant defense costs and, in the event of an adverse outcome, be required to pay damages and interest to the prevailing party and, depending on the jurisdiction of the litigation, be held responsible for the costs of the prevailing party.  Operating in highly litigious jurisdictions, such as the United States, increases the risk of materially adverse litigation.

 

***We may be liable for accidents or other events that affect our students and staff.  Events of this kind may harm our reputation among parents and government bodies.***

 

We may be held responsible for the health and safety of our students and staff.  If personal injuries or accidents occur, we may face claims from parents, government officials or other parties alleging that we were negligent, provided inadequate supervision or were otherwise responsible for causing injury.  We may also face allegations that teachers, other personnel or students committed unlawful acts.  The occurrence or alleged occurrence of these events and others that impact our students or staff could expose us to financial liability or harm our reputation, even if we are not at fault.  This would be especially true if the potential liability exceeded our insurance coverage.

 

A successful liability claim against us for injuries or other harm suffered by students, employees or other people could materially adversely affect our reputation and results of operations.  Even if such a claim is unsuccessful or unwarranted, it could divert management attention from our operations, cause us to incur substantial costs in defending the claim and harm our reputation, all of which could materially adversely affect our business, prospects, results of operations and financial condition.

 

***Our insurance may be inadequate or premiums may increase substantially.***

 

We maintain liability insurance at a level we believe to be adequate and consistent with industry practice.  However, claims in excess of our insurance coverage or claims not covered by our insurance could arise.  Furthermore, there can be no assurance that we will be able to obtain liability insurance coverage in the future on acceptable terms or at all.  A successful claim against us that is not covered by or is in excess of our insurance coverage could materially adversely affect our business, prospects, results of operations and financial condition.  Any such claims may also increase our insurance premiums.

 

8

----

Table of Contents

 

***Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.***

 

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and personally identifiable information of our employees and our students and their families, including academic and medical records, on our networks. The secure processing, maintenance and transmission of this information is critical to our operations. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information and regulatory penalties, and could disrupt our operations, damage our reputation and harm our ability to attract and retain students, any of which could adversely affect our business, prospects, results of operations and financial condition.

 

***We operate various information technology systems in different jurisdictions; the incompatibility or failure of these systems could materially adversely affect our business.***

 

We do not have a universal information technology system in place across all the jurisdictions in which we operate.  As a result, schools may have difficulty sharing information and curricula and we may have difficulties taking advantage of synergies among our different schools.  These difficulties and related risks are heightened by the growth of our business.  We may incur greater costs and achieve fewer savings as a result of maintaining multiple information technology systems than we would if there were one information technology system operating across all our jurisdictions.  These increased costs and lost opportunities for savings and synergies could materially adversely affect our business, prospects, results of operations and financial condition.

 

***Exchange rate fluctuations may materially adversely affect our results of operations and profitability.***

 

It is our general practice to collect revenues and pay expenses in the local currency.  The Chinese renminbi has an exchange rate tied to a basket of foreign currencies that include the U.S. dollar, euro, Japanese yen and South Korean won and is allowed to float within a narrow band around the central parity managed by the People’s Bank of China.  In the Middle East, substantially all of our operations are conducted in the Qatari riyal and the United Arab Emirates (“UAE”) dirham, which are pegged to the U.S. dollar.  Our operations in the United Kingdom are conducted in sterling.  Elsewhere in Europe, our operations are conducted in the euro and local currencies, including the Swiss franc, Czech crown, Hungarian forint and Polish zloty.  Our operations in Thailand are conducted in Thai baht.  Our operations in Singapore are conducted in Singapore dollars.  Our operations in Cambodia are conducted in Cambodian riel.  Our operations in Vietnam are conducted in Vietnamese dong. Our operations in Hong Kong are conducted in Hong Kong dollars.  Our operations in the United States are conducted in U.S. dollars.  Our operations in Mexico are conducted in Mexican pesos.  Conducting business across multiple currencies subjects us to currency fluctuation risks.  In particular, fluctuations in currency exchange rates can have an impact on the translation of foreign currency-denominated amounts into U.S. dollars, which is our functional currency, and affect our results of operations when we transact between foreign currencies.  As of August 31, 2015, the majority of our debt was denominated in U.S. dollars.  Because a majority of our income is denominated in currencies other than the U.S. dollar and we do not hedge our exchange rate risk, changes in exchange rates could reduce our ability to service our debt.  Conducting business in multiple currencies subjects us to exchange rate and currency risk that could materially adversely affect our business and reported results.

 

***We may become subject to taxes, penalties or additional liabilities in relation to our current and past use of independent consultants and the payment of some of our teachers.***

 

If our independent consultants are deemed to be, or deemed to have been, our employees, we could be subject to penalties and be liable for unpaid taxes, as well as unpaid employment benefits, and we would have to incur the cost of providing these consultants with such benefits going forward.  In addition, in some of our European schools we make payments to teachers through an offshore entity.  We have set aside a reserve of $0.9 million in our consolidated financial statements for fiscal 2015 in relation to this offshore payment arrangement.  If the local authorities were to successfully challenge the nature of such arrangements, we could be held liable for the payment of additional taxes, social security contributions, interest and penalties, and any such payment may materially adversely affect our business, results of operations and financial condition.

 

***The occurrence of epidemics or other adverse public heath developments, natural disasters or unanticipated catastrophic events could have an adverse material effect on our business, prospects, results of operations and financial condition.***

 

If an epidemic or other outbreak of disease occurs, parents may withdraw their children from school to protect them from the possibility of infection, faculty and staff may become ill or avoid coming to work in order to protect themselves from the outbreak or the government may order schools to close in order to contain the epidemic or outbreak.  For example, certain Asian countries have encountered epidemics, such as SARS, the avian flu and other influenza strains.  Past epidemic outbreaks, depending on their scale, have caused different degrees of damage to national and local economies throughout the world.  In 2012, there were reports of the outbreak of the viral hand, foot and mouth disease in Thailand, China and other neighboring countries, including several confirmed human cases and deaths, particularly among children.  In 2014, cases of Ebola virus disease, which originated in West Africa, appeared in Europe and the United States. An outbreak of SARS, avian flu, viral hand, foot and mouth disease, the Ebola virus or any other epidemic in any region in which we operate could materially adversely affect our business operations, including temporary closures of our schools.  Similarly, the occurrence of natural disasters or unanticipated catastrophic events could result in material disruptions to our businesses.  To the extent that any such interruption is not covered by our insurance, our business and results of operation could suffer and it may take a significant amount of time for our business to recover to previous levels of student enrollment and revenues.

 

9

----

Table of Contents

 

**Risks Related to Our Debt**

 

***Our debt could adversely affect our financial health and competitive position.***

 

As of August 31, 2015, we had total debt of face value $1,196.0 million.  Of this amount, $897.2 million was due under our term loan facility, which will mature in 2021, and $208.1 million was due under our Swiss franc denominated senior secured notes, which will mature in 2022.  See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Borrowings.”

 

Our debt could materially adversely affect our business by, for example:

 

·                  limiting our ability to pay dividends;

 

·                  increasing our vulnerability to general adverse economic and industry conditions;

 

·                  requiring us to dedicate a material portion of our cash flows from operations to make payments on our debt, thereby reducing the availability of cash to fund our operations or make capital expenditures;

 

·                  limiting our flexibility in planning for, or reacting to, changes in our business or industry; and

 

·                  limiting our ability to borrow additional funds.

 

***We require cash to service our debt, and our ability to generate cash is subject to many factors beyond our control.***

 

Our ability to service our debt and fund capital expenditures will depend on our ability to generate cash.  Our ability to generate cash depends on the performance of our schools, which in turn depends on global and local economic, financial, competitive, regulatory and other factors that are beyond our control.

 

We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt or to fund our other liquidity needs.  We may need to refinance all or a portion of our debt on or before maturity.  We cannot assure you that we will be able to refinance any of our debt on commercially reasonable terms or at all.  Failure to refinance our debt on terms we believe to be acceptable could materially adversely affect our business, financial condition, results of operations and cash flow.

 

***Our indebtedness may restrict our ability to pursue our business strategies.***

 

Our debt instruments limit our ability to, among other things:

 

·                  incur additional debt;

 

·                  pay dividends or make other distributions or repurchase or redeem our shares;

 

·                  make investments;

 

·                  sell assets, including capital stock of restricted subsidiaries;

 

·                  enter into agreements restricting our subsidiaries’ ability to pay dividends;

 

·                  consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

 

·                  enter into sale and leaseback transactions;

 

·                  enter into transactions with our affiliates; and

 

·                  incur liens.

 

                                                Our ability to comply with these covenants and restrictions may be affected by events beyond our control.  If we breach any of our covenants, we could be in default under our debt instruments.  This would permit our lenders to take certain actions, including requiring us to repay all our debt prior to the scheduled maturity.  Furthermore, our lenders could cancel our credit facility.  If our debt repayment were to be accelerated, we may not have the cash or liquid assets to repay our debt.  The occurrence of any of these events could materially adversely affect our business, financial condition and results of operations.

 

10

----

Table of Contents

 

***We are subject to interest rate risk resulting from general economic conditions and policies of governmental and regulatory agencies.***

 

As of August 31, 2015, we had total principal amount of $897.2 million floating rate debt outstanding.  Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of governmental and regulatory agencies and, in particular, the United States Federal Reserve Board.  Changes in monetary policy, including changes in interest rates, could influence the amount of interest we pay on our floating interest rate obligations and any floating interest rate obligations we may incur in the future.  If interest rates increase, our debt service obligations on our floating rate debt would increase even though the amount borrowed remained the same, and our net income would decrease.  We do not hedge our interest rate risk by use of derivative instruments and we may in the future be unable to do so.  An increase in our financing costs could materially adversely affect our results of operations and our ability to pay amounts due on our debt and make distributions to our shareholders.

 

**Risks Related to the Jurisdictions in which We Operate**

 

***We may experience adverse changes in general economic, political, social and regulatory conditions in our markets.***

 

We operate in China, Europe, the Middle East and Southeast Asia (“ME/SEA”) and North America where many local communities, economies and legal and administrative structures are rapidly evolving.  As a result, our success depends in part upon our ability to adapt to and succeed in differing economic, legal, social and political conditions.  In particular, financial risks associated with our operations include risks of liquidity, inflation, devaluation, price volatility, currency convertibility and exchange rates and actual or perceived risk of country default resulting from significant deficits or political instability.  Government interference in the economy in certain countries, changes in economic, political and social conditions (including, for example, significant changes to foreign exchange policies and wage controls) and changes in government attitudes toward for-profit education, particularly K-12 schools, could materially adversely affect our business, prospects, results of operations and financial condition.

 

***Uncertainties regarding the general regulatory and legal environment, particularly in China, the Middle East and parts of Southeast Asia, could adversely affect our business.***

 

Our international operations are governed by local laws and regulations applicable to foreign investments, foreign-owned enterprises and the operation of international schools generally.  Our business could be adversely affected by the interpretation and enforcement of and changes in these laws and regulations.  These laws and regulations often lack transparency, can be difficult to interpret and may be enforced inconsistently.

 

China, the Middle East and parts of Southeast Asia have not developed integrated legal systems that cover all aspects of our activities.  The Chinese legal system is based on written statutes.  Prior court decisions may be cited for reference but have limited precedential value.  Since 1979, Chinese legislation and regulations have significantly enhanced the protections afforded to various forms of foreign investments in China.  Because these laws and regulations are relatively new, and because of the limited volume of published decisions and their nonbinding nature, the interpretation and enforcement of these laws and regulations are uncertain.  In addition, the Chinese legal system is based in part on government policies and internal rules that may have retroactive effect and, in some cases, are not published at all.  As a result, we may not be aware of any alleged violation of these policies and rules until after the alleged violation has occurred.  Any litigation in China may be protracted and result in substantial costs and diversion of resources and management attention.

 

The laws and regulations of China and countries in ME/SEA are often unclear and subject to differing regulatory interpretation.  National, regional, local and other governmental bodies may issue inconsistent decisions and opinions.  In particular, the laws and regulations applicable to the establishment and operation of international schools can be vague and uncertain.  Regulatory agencies in China, the Middle East and parts of Southeast Asia have substantial discretionary authority to implement and enforce regulations.  Such implementation and enforcement is not always consistent or predictable.  We cannot assure you that we will not be found to be in violation of any current or future laws and regulations in these countries, including laws and regulations relating to the ownership and operation of our schools, including our curricula, admissions criteria and leases.  Potential consequences could include fines, penalties or the revocation of a school’s education license, or the ownership of a school could be challenged which would cause such school to cease operations.  In some jurisdictions, the legal interpretation of our leases and other agreements may be uncertain.  Exposure to regulatory uncertainty could limit our legal protection and ability to comply with regulations applicable to us, which could materially adversely affect our business, prospects, results of operations and financial condition.

 

11

----

Table of Contents

 

***Policies, laws and regulations of foreign governments, including those relating to education, could adversely affect our existing business and our potential growth.***

 

Our business is subject to the policies, laws and regulations of each jurisdiction in which we operate.  These policies and regulations apply to many aspects of our business, including:

 

·                  applying for, obtaining and maintaining necessary licenses, permits, visas, accreditations and other authorizations for operating our schools and employing our teachers;

 

·                  our ability to recruit expatriate and local students;

 

·                  pricing and mechanisms for receipt of tuition fees;

 

·                  employment conditions, including taxation rates and other factors related to both foreign and local staff;

 

·                  the development of curricula that meet the requirements of local educational authorities;

 

·                  ownership structure and governance, in particular policies and regulations that relate to foreign ownership; and

 

·                  the ability of our schools to earn profits or pay management or product fees or royalties and our ability to repatriate cash through dividends or fees.

 

We may not be able, in part or at all, to comply with such policies, laws and regulations in each of the jurisdictions in which we operate or would like to expand our operations, or we may incur significant costs to do so.  Our failure to comply or the imposition of significant compliance costs on us could materially adversely affect our business, prospects, results of operations and financial condition.

 

***Our schools in Guangzhou, Shanghai and Chengdu have not registered with the local Civil Affairs Bureau, which could subject the schools to enforcement actions resulting in sanctions, including a suspension of our operations.***

 

Under PRC laws and regulations, civil non-enterprise entities are generally required to register with the local Civil Affairs Bureau.  Failure to do so may give rise to sanctions such as warnings, orders for rectification or suspension of operations.  The Guangzhou Education Commission and the Guangdong Education Commission, which are the education commissions at the municipal and provincial levels, respectively, have each advised us that our recently acquired school in Guangzhou is not required to register with the Guangzhou Civil Affairs Bureau, and to our knowledge no other international school in Guangzhou has registered.  The Guangdong Education Commission has renewed the school’s annual license each year, most recently in June 2015.  In Shanghai, in the past, the Shanghai Education Commission had advised us not to register with the Shanghai Civil Affairs Bureau until the completion of a pilot program under which a few international schools registered.  Previously, we obtained a certificate of approval from the Shanghai Foreign Economic and Trade Commission.  The Shanghai Education Commission is now satisfied with the success of the pilot program and asked the British International School Shanghai (“BISS”) (among other international schools) to register with the Shanghai Civil Affairs Bureau.  Based on this advice, BISS has now:  (i) submitted the necessary papers to the Shanghai Education Commission to begin the registration process with the Shanghai Civil Affairs Bureau as a civil non-enterprise entity (which would involve filing its articles of association with the Shanghai Civil Affairs Bureau) and (ii) not applied to renew its certificate of approval from the Shanghai Foreign Economic and Trade Commission which it had previously held.  We have worked under the oversight of the Shanghai Education Commission since the inception of BISS and the Shanghai Education Commission has renewed BISS’s education license each year after completing its annual inspections, most recently in November 2015. Our school in Chengdu, Leman International School (“LIS”), which we acquired in June 2015, has commenced the process for registration with the Sichuan Provincial Department of Civil Affairs for its official establishment.

 

Given the uncertainties of interpretation and implementation of relevant regulations by different authorities, we cannot assure you that our school in Guangzhou will not be required to register with the Guangzhou Civil Affairs Bureau or that BISS and LIS will be successful with their applications to the Shanghai Civil Affairs Bureau and the Sichuan Provincial Department of Civil Affairs, respectively.  Our failure to complete required registrations could materially adversely affect our reputation, business, prospects, results of operations and financial condition.

 

12

----

Table of Contents

 

***We may face restrictions on our ability to transfer and distribute funds.***

 

We currently transfer and distribute funds among the jurisdictions in which we operate and we expect to continue to do so in order to fund our group-wide cash and financing requirements, including servicing our debt.  To transfer funds among jurisdictions, we rely principally on cash-pooling arrangements, dividends and other distributions, inter-company loans, and the payment of administrative and management fees, royalties and licensing fees.

 

BISS has made substantial distributions through dividends and our schools in Shanghai, Beijing and Guangzhou have transferred cash through consultancy services fees, royalties and management charges paid to one of our subsidiaries.  In addition, we have repatriated cash from China through intercompany transfers of interests in subsidiaries.  Our schools in Thailand and Vietnam make distributions through quarterly and annual dividends, respectively. We also receive management charges from our school in Guangzhou. If any of the transfers or arrangements described above were found to be invalid by the relevant authorities, distributions from these schools could be discontinued and we may be required to repay amounts previously transferred.

 

***Our ability to make distributions is restricted in some jurisdictions.***

 

Due to restrictions imposed by local authorities and regulations, the entities operating our schools in Hong Kong, Hungary, Slovakia and Mexico are non-profit making and cannot make distributions in the form of dividends. If we acquire or build more schools which are subject to similar restrictions, our ability to fund our operations, make distributions and pay dividends will be adversely affected.

 

***If the PRC government finds that the structures of our schools in China do not comply with applicable PRC laws and regulations or we failed to obtain required permits or approvals for our intra-group transfer of our schools in Beijing, we may be unable to operate these schools and may be subject to penalties.***

 

In China, the Ministry of Education regulates the education industry, and the local education commissions in the Chinese cities in which we operate have responsibility for local enforcement and oversight with respect to matters under their jurisdiction.  These authorities have broad discretion in dealing with any violation of PRC laws or regulations, including any failure to obtain, maintain or comply with any required permit or approval, by our schools in China.

 

Under the Interim Regulations Concerning the Establishment of Schools for the Children of Expatriates (the “Interim Regulations”), only foreign individuals with lawful residence in China, wholly foreign-owned enterprises and certain foreign entities duly registered or established in China may apply to establish an international school, subject to the approval of the Ministry of Education.  The approval authority has been delegated to the Ministry of Education’s local counterpart at the provincial level pursuant to the Decision of the State Council on the Sixth Batch of Cancelled and Amended Administrative Examination and Approval Items issued by the State Council of the PRC on September 23, 2012.  An employee of Nord Anglia Education, who had lawful residence in China at the time, applied to the Ministry of Education for the establishment of BISS in 2002 as its sponsor.  Since 2005, documents that we have submitted to the Shanghai Education Commission have identified as sponsor one of our wholly-owned subsidiaries that does not fall within one of the categories of permitted sponsors in the Interim Regulations.  To date, no challenges in this respect have been brought against the operations of BISS by local or national educational authorities.  We have not directly approached the Ministry of Education on this matter and do not anticipate doing so.

 

Pursuant to the Interim Measures for the Administration of Examination and Approval of Overseas Investment Projects, the National Development and Reform Commission (“NDRC”) requires approvals for overseas investment projects made by PRC entities.  We obtained approvals from the Ministry of Commerce of the PRC and the PRC State Administration of Foreign Exchange for the intra-group transfer of our schools in Beijing to our PRC subsidiaries and were advised by transaction counsel that local NDRC approval was not required.

 

If the Ministry of Education, the NDRC or other applicable PRC regulatory agencies were to find that the ownership structures of our schools do not comply with applicable PRC laws and regulations or we failed to obtain required approvals for the transfer of our schools in Beijing, we may be unable to operate our schools in Beijing and may be subject to penalties.

 

13

----

Table of Contents

 

***Our school in Guangzhou has not obtained written endorsement from the local and provincial education commissions for the site that houses its kindergarten.***

 

International schools in China require an endorsement from the local or provincial education commission to operate multiple teaching sites.  Prior to the acquisition of our school in Guangzhou, the school had not obtained a written endorsement from either the Guangzhou or Guangdong education commission for the site that houses its kindergarten.  Both the Guangzhou and Guangdong education commissions are aware of the kindergarten, and we intend to seek their formal endorsement.  However, we cannot assure you that we will obtain a formal endorsement.  If we are unable to obtain a formal endorsement, the education commissions could take various regulatory actions against us and we may be required to relocate our kindergarten students to our main Guangzhou campus.

 

***If our landlords’ title to the properties and/or other legal status of the facilities we lease for our schools were challenged, our operations could be disrupted.***

 

We lease all of our school facilities in China and Vietnam.  Our landlords should have valid land use and property ownership rights with respect to such school facilities and associated land.  If our landlords are not the holders of land use rights or lessees of such holders, they are required to receive full authorization to sub-lease the relevant properties.  In addition, in order to build new facilities or expand existing facilities, our landlords are also required to obtain all necessary planning, building and other regulatory approvals.

 

For five of our six schools in China there is some uncertainty as to the landlords’ land use and property ownership rights or the receipt by such landlords of all necessary regulatory approvals.  For the BISS Puxi campus, although the landlord has confirmed to us that the formal lease agreements and ownership certificates have been granted, it is unclear that the respective owners have obtained all of the requisite approvals from the competent land and building administrative authority to lease these facilities to BISS.  Also for the BISS Puxi campus, the landlord is in the process of obtaining the land use right associated with a grass sports field for the secondary school.  In Beijing, we have been advised by the landlord of The British School of Beijing’s Shunyi facility that it has requested from the competent land and building administrative authority the certificate confirming its valid property ownership needed to lease that facility.  With respect to The British School of Beijing’s Sanlitun facility, the landlord has not provided us with a valid land use right certificate.  Although we have been advised by the landlord that it is in the process of obtaining such certificate and other requisite approvals, they have not yet been obtained.  The landlord has advised that the facility was built more than 30 years ago and to the knowledge of our management no enforcement action has been taken by the relevant Beijing governmental authorities with respect to the allocation of the land to the landlord, the educational use of the land and the construction approvals held by the landlord.  With respect to the kindergarten campus of the British School of Guangzhou (“BSG”), the landlord has not provided us with a valid property ownership certificate.  With respect to the LIS campus, the landlord, the Chengdu Education Bureau, has yet to obtain a land use right certificate, approval to lease the land to LIS or real estate property certificates for the facilities on the land.

 

In each of these situations, we are not aware of any sanction, claim, or investigation being contemplated by the competent authorities.  However, due to the discretionary nature of regulatory enforcement in China, we cannot be certain that such action could not and will not be taken.  We cannot assure you that if title to and/or other legal status of the facilities leased by The British School of Beijing, BISS, BSG or LIS were challenged by the competent regulatory authorities or any third party, our landlords’ ability to perform their obligations under their leases with us would not be materially adversely affected and our operations in China would not be disrupted.  In addition, such uncertainty as to the landlords’ title to the properties may limit our ability to seek and obtain specific performance of such landlords’ obligations under their leases with us in the event of a dispute.

 

In addition, in accordance with local practice we did not register our lease contracts with the competent administrative department of the PRC within 30 days after their execution.  As a result, if our landlords enter into lease agreements with third parties for the premises we lease and the third parties register the leases, then the third parties may be able to challenge the validity of our leases.

 

In Vietnam, our landlord has not provided us with valid land use right certificates and building ownership documents in relation to certain areas leased by BIS Ho Chi Minh City, and our joint venture partners in Hanoi have not provided us with valid land use right certificates and building ownership documents for our two schools in Hanoi.

 

In the future, we may also operate more schools where there is defect or uncertainty in our title to land and property used for school operation, and the abovementioned risk we face will increase.

 

14

----

Table of Contents

 

***We operate three defined benefit pension schemes in the United Kingdom, all of which are currently in deficit.***

 

We operate three defined benefits plans in the United Kingdom:  the Lifetime Pension Scheme, the Wyburn School Limited Pension & Life Assurance Scheme (1985) and the Nord Anglia Joint Pension Scheme (collectively, the “UK Defined Benefit Plans”).  The Lifetime Pension Scheme is closed to future accrual, meaning new members cannot join the plan and existing members cannot build up additional entitlements within it.  The other two UK Defined Benefit Plans have no active members, meaning that no employees are currently accruing benefits in those plans in respect of their on-going employment.  In their place, we offer a defined contribution pension plan to our UK employees.  While this closure to future accrual will reduce any future service deficit, the past service deficit in respect of benefits already accrued will not be reduced by this change.

 

Our consolidated financial statements include reference to our defined benefit pension liability.  As of August 31, 2015, the aggregate deficit for the UK Defined Benefit Plans was $21.8 million on an IFRS accounting basis.

 

The last agreed actuarial valuation of the Lifetime Pension Scheme was carried out as of August 31, 2011, resulting in a deficit of £14.6 million on the scheme-specific basis.  Should a wind-up trigger occur in relation to this plan, the buy-out deficit will become due and payable by the employers with a liability to the plan, and the deficit of the Lifetime Pension Scheme on a buy-out basis was £29.6 million as of August 31, 2011.

 

The last actuarial valuation of each of the Wyburn School Limited Pension & Life Assurance Scheme (1985) and the Nord Anglia Joint Pension Scheme was carried out as of September 1, 2013.  The aggregate of the scheme-specific deficits of these plans was £0.9 million, and we estimate that the aggregate of their buy-out deficits was approximately £1.8 million.  Any movement as a result of changes reported in the actuarial valuations would not be regarded as significant.

 

As a result of these valuations, we are required to make on-going cash contributions in order to reduce the funding deficits.  We have agreed with the trustees to a schedule of payments until September 2020 for the Lifetime Pension Scheme based on the 2011 valuation.  This schedule began with a payment of £1.8 million in September 2013, increasing each year by 3.1% per annum until 2020, when the payment is £2.2 million.  We have also agreed on a funding recovery plan with the trustees of the Wyburn School Limited Pension & Life Assurance Scheme (1985) and the Nord Anglia Joint Pension Scheme of aggregate payments of £48,300 per annum until May 2020.

 

A number of our subsidiary companies also participate in the Lifetime Pension Scheme, making it a multi-employer pension plan.  Due to a number of these participating employers ceasing to employ any active members in the pension plan, statutory debts have become due from them to the plan.

 

These statutory debts represent a proportion of the plan’s overall liabilities, based on the amount which would be needed to secure annuities for members, calculated with reference to the number of members each participating employer is liable for.  As part of the 2011 valuation, these statutory debts have been allocated to the continuing employers in the Lifetime Pension Scheme.  In addition, Nord Anglia Education Limited has provided a guarantee in respect of the obligations of the participating subsidiary companies in the plan.

 

***Disputes with our joint venture partners may adversely affect our business.***

 

In some of the jurisdictions in which we operate or may operate in the future, including Abu Dhabi, Dubai, Qatar, Thailand and Vietnam, we operate our schools through joint ventures with local businesses or individuals due to regulatory or other business requirements.  Our joint venture partners may (i) have economic or business interests or goals that are inconsistent with ours, (ii) take actions contrary to our instructions or requests or contrary to our policies or objectives or (iii) be unable or unwilling to fulfill their obligations under their agreements with us.  A serious dispute with a joint venture partner could materially adversely affect our business, financial condition and results of operations.  In addition, if there is any adverse publicity in relation to our joint venture partners, the reputation and operations of our relevant joint ventures may be adversely affected.

 

***The ownership structure of our schools in Thailand may be challenged.***

 

Thai law requires all school permit holders to be majority owned by Thai persons.  Although the articles of association of our Thai subsidiaries entitle us to 100% of the economic benefits of our Thai schools, we hold 49% of the shares of each school while Thai persons hold the remaining shares.  The articles of association entitle the Thai persons to fixed, de minimus payments upon the declaration of dividends by the subsidiaries.  We consolidate these companies because we are entitled to 100% of their economic benefit.

 

We cannot assure you that, if our ownership structure is challenged, the Thai regulator will interpret the relevant legislation so as to find that the ownership structure of our Thai schools, including our entitlement to 100% of their economic benefit, complies with Thai regulations, or that Thai regulations governing foreign ownership of schools will not change in the future.  If the ownership structure of our schools in Thailand is found to be non-compliant with Thai regulations, we may be unable to operate our schools in Thailand, which could materially adversely affect our business, prospects, results of operations and financial condition.

 

15

----

Table of Contents

 

***We are subject to anti-corruption laws in the jurisdictions in which we operate including, anti-corruption laws of China and the U.S. Foreign Corrupt Practices Act (“FCPA”).  Our failure to comply with these laws could result in penalties which could harm our reputation and materially adversely affect our business, results of operations and financial condition.***

 

We are subject to the FCPA, which generally prohibits companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining any benefit, along with various other anti-corruption laws.  Although we have implemented policies and continue to carry out training and introduce procedures designed to ensure that we, our employees and other intermediaries comply with the FCPA and other anti-corruption laws to which we are subject, there is no assurance that such measures will work effectively all of the time or protect us against liability under the FCPA or other laws for actions taken by our employees and other intermediaries with respect to our business or any businesses that we may acquire.  If we fail to comply with the FCPA or other laws governing the conduct of business with government entities or other corruption offences, or if any of the schools we acquire are found to have failed to comply with those laws before we acquired them, we may be subject to criminal and civil penalties and other remedial measures, which could adversely affect our business, financial condition, results of operations and liquidity.  Any investigation of any potential violations of the FCPA or other anti-corruption laws by U.S. or foreign authorities could also adversely affect our business, financial condition, results of operations and liquidity, regardless of the outcome of the investigation.

 

***The audit report included in this annual report is prepared by auditors who are not inspected fully by the Public Company Accounting Oversight Board and, as such, you are deprived of the benefits of such inspection.***

 

As an auditor of companies that are publicly traded in the United States and a firm registered with the Public Company Accounting Oversight Board, or PCAOB, PricewaterhouseCoopers is required under the laws of the United States to undergo regular inspections by the PCAOB. However, because we have substantial operations within the People’s Republic of China, a jurisdiction where the PCAOB is currently unable to conduct inspections without the approval of the Chinese government authorities, our auditor and its audit work is not currently inspected fully by the PCAOB.

 

Inspections of other auditors conducted by the PCAOB outside of China have at times identified deficiencies in those auditors’ audit procedures and quality control procedures, which may be addressed as part of the inspection process to improve future audit quality. The lack of PCAOB inspections of audit work undertaken in China prevents the PCAOB from regularly evaluating our auditor’s audits and its quality control procedures. As a result, shareholders may be deprived of the benefits of PCAOB inspections, and may lose confidence in our reported financial information and procedures and the quality of our financial statements.

 

Proceedings instituted by the SEC against five PRC-based accounting firms, including the affiliate of our independent registered public accounting firm, and/or any related adverse regulatory development in the PRC, could result in our financial statements being determined to not be in compliance with the requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

 

Proceedings instituted by the SEC against five PRC-based accounting firms, including the affiliate of our independent registered public accounting firm, could result in our financial statements being determined to not be in compliance with the requirements of the Exchange Act.

 

In late 2012, the SEC commenced administrative proceedings under Rule 102(e) of its Rules of Practice and also under the Sarbanes-Oxley Act of 2002 against the mainland Chinese affiliates of the “big four” accounting firms, including the affiliate of our auditor, and also against Dahua, the former BDO affiliate in China. The Rule 102(e) proceedings initiated by the SEC relate to the failure of these firms to produce documents, including audit work papers, in response to the request of the SEC pursuant to Section 106 of the Sarbanes-Oxley Act of 2002, as the auditors located in China are not in a position lawfully to produce documents directly to the SEC because of restrictions under PRC law and specific directives issued by the CSRC. The issues raised by the proceedings are not specific to the Chinese affiliate of our auditor or to us, but potentially affect equally all PCAOB-registered audit firms based in China and all businesses based in China (or with substantial operations in China) with securities listed in the United States. In addition, auditors based outside of China are subject to similar restrictions under PRC law and CSRC directives in respect of audit work that is carried out in China which supports the audit opinions issued on financial statements of entities with substantial China operations.

 

16

----

Table of Contents

 

In January 2014, the administrative judge reached an initial decision that the China-based affiliates of the “big four” accounting firms should be barred from practicing before the SEC for a period of six months.

 

In February 2015, each of the “big four” accounting firms agreed to a censure and to pay a fine to the SEC to settle the dispute with the SEC. The settlement stays the current proceeding for four years, during which time the firms are required to follow detailed procedures to seek to provide the SEC with access to Chinese firms’ audit documents via the CSRC. If a firm does not follow the procedures, the SEC would impose penalties such as suspensions, or commence a new, expedited administrative proceeding against the non-compliant firm or it could restart the administrative proceeding against all four firms.

 

If the affiliate of our independent registered public accounting firm were denied, temporarily, the ability to practice before the SEC, we would need to consider with our Hong Kong based auditor the alternate support arrangements they would need in their audit of our operations in China. In addition, in May 2014, PRC Ministry of Finance proposed certain draft regulations that would require auditors based outside of China, including our independent registered public accounting firm, to cooperate with mainland Chinese auditors with requisite qualifications in order to conduct audit work for overseas-registered mainland Chinese companies but with operating entities in China. Since the proposed regulations are in draft form and the interpretation, application or enforcement of such proposed regulations is uncertain. However, if the proposed regulations were to be adopted in their current form, our independent registered public accounting firm may need to establish appropriate arrangements with mainland Chinese auditors in order to continue to audit our financial statements, which may be difficult in light of the SEC’s administrative proceedings described above. If our auditor were unable to have alternate support or cooperation arrangements or otherwise were unable to address issues related to the production of documents pursuant to Section 106 of the Sarbanes—Oxley Act of 2002 or any adverse regulatory development in the PRC, and we were unable to timely find another independent registered public accounting firm to audit and issue an opinion on our financial statements, our financial statements could be determined to not be in compliance with the requirements of the Exchange Act. Such a determination could ultimately lead to delisting of our shares from the New York Stock Exchange or deregistration from the SEC, or both. Moreover, any negative news about the proceedings against these audit firms may adversely affect investor confidence in companies with substantial mainland China based operations listed in the U.S. All these would materially and adversely affect the market price of our shares and substantially reduce or effectively terminate the trading of our shares in the United States.

 

**Risks Related to Ownership of Our Ordinary Shares**

 

***The trading price of our ordinary shares may be volatile, which could result in substantial losses to investors.***

 

The trading price of our ordinary shares could fluctuate widely.  Factors that could affect the trading price of our ordinary shares include broad market and industry trends over which we have no control and factors specific to our operations, including the following:

 

·                  actual or anticipated fluctuations in our quarterly results of operations;

 

·                  variations in our revenues, earnings and cash flow;

 

·                  announcements of new investments, acquisitions, strategic partnerships or joint ventures;

 

·                  announcements of expansions by us or our competitors;

 

·                  changes in financial estimates by securities research analysts;

 

·                  departures of our executive officers and key personnel;

 

·                  release or expiry of lock up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and

 

·                  potential litigation or regulatory investigations.

 

Any of these factors may result in large and sudden changes in the volume and price at which our ordinary shares will trade.  Furthermore, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies.  These market fluctuations may also materially adversely affect the market price of our ordinary shares.  As a result, you could lose all or part of your investment.

 

17

----

Table of Contents

 

***If our operating results do not meet analyst projections, our stock price could decline.***

 

Several independent securities analysts publish quarterly and annual projections of our financial performance. These projections are developed independently by these analysts based on their own analyses. We do not disclose to analysts any material non-public information, internal forecasts or other confidential business information. As a result, you should not assume that we endorse any reports issued by, or any statement or view expressed in, these securities analysts’ reports. Moreover, we expressly disclaim any responsibility to advise securities analysts or the public markets of our views regarding the accuracy of their published reports. If our actual results do not meet analysts’ guidance, our stock price could decline.

 

***Substantial future sales or expected sales of our ordinary shares in the public market could cause the price of our ordinary shares to decline.***

 

Sales of substantial amounts of our ordinary shares, or the expectation that these sales could occur, could adversely affect the price of our ordinary shares and could impair our ability to raise capital through the sale of additional shares.  As of December 24, 2015, we had 104,101,223 ordinary shares outstanding.  The ordinary shares are freely tradable without restriction under the Securities Act, except for any of our ordinary shares that may be held or acquired by our directors, executive officers and other affiliates, as that term is defined in the Securities Act, which are restricted securities under the Securities Act.  Restricted securities may not be sold in the public market unless the sale is registered under the Securities Act or an exemption from registration is available.

 

In the future, we may also issue our securities if we need to raise capital in connection with a capital raise or acquisition.  The amount of our ordinary shares issued in connection with a capital raise or acquisition could constitute a material portion of our then-outstanding ordinary shares.

 

***Because we do not expect to pay any dividends on our ordinary shares for the foreseeable future, you may never receive a return on your investment.***

 

You should not rely on an investment in our ordinary shares to provide dividend income.  We do not anticipate paying any cash dividends to our shareholders in the foreseeable future.  Instead, we plan to retain any earnings to maintain and expand our operations.  In addition, our ability to pay cash dividends is currently limited by the terms of our debt instruments, and any future debt instruments may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our ordinary shares.  Accordingly, you must rely on sales of your ordinary shares after price appreciation, which may never occur, as the only way to realize any return on your investment.

 

***Our articles of association contain anti-takeover provisions that could materially adversely affect the rights of holders of our ordinary shares.***

 

Our articles of association limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions.  These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction.  For example, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares.  Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult.  If our board of directors decides to issue preferred shares, the price of our ordinary shares may fall and the voting and other rights of the holders of our ordinary shares may be materially adversely affected.

 

***Premier Education Holdings has significant influence over us, including control over decisions that require the approval of shareholders, which could limit your ability to influence the outcome of key transactions, including a change of control.***

 

Our controlling shareholder is Premier Education Holdings.  Premier Education Holdings owns 65.2% of our outstanding shares.  For as long as Premier Education Holdings continues to beneficially own shares representing more than 50% of the voting power of our shares, it will be able to direct the election of a majority of the members of our board of directors and exercise a controlling influence over our business and affairs, including any determinations requiring shareholder approval with respect to mergers or other business combinations, the acquisition or disposition of assets, the incurrence of debt, the issuance of any additional shares or other equity securities, the repurchase or redemption of shares and the payment of dividends.  Similarly, Premier Education Holdings has the power to determine matters submitted to a vote of our shareholders without the consent of our other shareholders, has the power to prevent a change in our control and could take other actions that might be favorable to it.  Even if its ownership falls below 50%, Premier Education Holdings may continue to be able to strongly influence or effectively control our decisions.

 

Additionally, affiliates of Premier Education Holdings are in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with us and may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

 

18

----

Table of Contents

 

***Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings, and you may not receive distributions with respect to the underlying ordinary shares if it is impractical to make them available to you.***

 

We may from time to time distribute rights to our shareholders, including rights to acquire our securities.  However, we cannot make rights available to our shareholders in the United States unless we register the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available.  We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause such a registration statement to be declared effective.  Moreover, we may not be able to establish an exemption from registration under the Securities Act.  Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.

 

***We are a Cayman Islands company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than under U.S. law, you may have less protection for your shareholder rights than you would under U.S. law.***

 

Our corporate affairs are governed by our amended and restated memorandum and articles of association, the Cayman Islands Companies Law (2013 Revision) and the common law of the Cayman Islands.  The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.  The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as that from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands.  The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States.  In particular, the Cayman Islands has a different body of securities laws than the United States.  In addition, some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands.

 

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as shareholders of a U.S. public company.

 

***We are a foreign private issuer and, as a result, are not subject to U.S. proxy rules and are subject to more lenient and less frequent Exchange Act reporting obligations than a U.S. issuer.***

 

Because we qualify as a foreign private issuer under the Securities Exchange Act of 1934, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including (i) the sections of the Exchange Act that regulate the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (ii) the sections of the Exchange Act that require insiders to file public reports of their stock ownership and trading activities and impose liability on insiders who profit from trades made in a short period of time and (iii) the rules under the Exchange Act that require the filing of quarterly reports on Form 10-Q containing unaudited financial and other specified information and current reports on Form 8-K upon the occurrence of specified significant events.  In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year.  Foreign private issuers are also exempt from Regulation FD, aimed at preventing issuers from making selective disclosures of material information.  As a result, you may not have the same protections afforded to stockholders of companies that are not foreign private issuers.

 

***We may lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.***

 

The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter and, accordingly, the next determination will be made with respect to us on February 29, 2016.  We would lose our foreign private issuer status if (i) a majority of our outstanding voting securities are directly or indirectly held of record by U.S. residents and (ii) a majority of our directors or executive officers are U.S. citizens or residents, a majority of our assets are located in the United States or our business is administered principally in the United States.  If we were to lose our foreign private issuer status, the regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly higher.  We may also be required to modify certain of our policies to comply with corporate governance practices associated with U.S. domestic issuers, which would involve additional costs.

 

19

----

Table of Contents

 

***We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our ordinary shares less attractive to investors.***

 

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act.  We cannot predict if investors will find our ordinary shares less attractive because we may rely on these exemptions.  If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and the trading price of our ordinary shares may be more volatile.  In addition, our costs of operating as a public company may increase when we cease to be an emerging growth company.

 

***The obligations associated with being a public company require significant resources and management attention, and failure to achieve and maintain effective internal controls could have a material adverse effect on our business, results of operations and the trading price of our ordinary shares.***

 

As a public company in the United States, we incur legal, accounting and other expenses that we did not previously incur as a private company.  We are subject to the reporting requirements of the Exchange Act, and the Sarbanes-Oxley Act, the listing requirements of the New York Stock Exchange and other applicable securities rules and regulations.  Compliance with these rules and regulations increases our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increases demand on our systems and resources, particularly after we are no longer an “emerging growth company.” The Exchange Act requires that we file annual and current reports with respect to our business, financial condition and results of operations.  The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting.  Furthermore, the need to establish and maintain the corporate infrastructure demanded of a public company may divert management’s attention from implementing our growth strategy, which could prevent us from improving our business, financial condition and results of operations.  We have made, and will continue to make, changes to our internal controls and procedures for financial reporting and accounting systems to meet our reporting obligations as a public company.  However, the measures we have taken, and will continue to take, may not be sufficient to satisfy our obligations as a public company.  In addition, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.  For example, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to incur substantial costs to maintain the same or similar coverage.  These additional obligations could have a material adverse effect on our business, financial condition, results of operations and cash flow.

 

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming.  These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.  This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.  We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities.  If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business, financial condition, results of operations and cash flow could be adversely affected.

 

For as long as we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act.  We could be an emerging growth company until August 31, 2019.  Furthermore, after the date we are no longer an emerging growth company, our independent registered public accounting firm will only be required to attest to the effectiveness of our internal control over financial reporting depending on our market capitalization.  Even if our management concludes that our internal controls over financialreporting are effective, our independent registered public accounting firm may still decline to attest to our management’s assessment or may issue a report that is qualified if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us.

 

20

----

Table of Contents

 

In connection with the preparation of this annual report on Form 20-F, we carried out an evaluation of the effectiveness of our internal control over financial reporting.  Based on this evaluation, our principal executive officer and principal financial officer concluded that our internal control over financial reporting was not effective based on management’s identification of two material weaknesses. See “Item 15. Controls and Procedures.”

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual and interim financial statements will not be prevented or detected on a timely basis.

 

We are in the process of implementing measures to remedy these material weaknesses. We cannot assure you that we will be able to resolve these material weakness in internal control over financial reporting in a timely and effective manner or that a significant deficiency or material weakness in our internal control over financial reporting will not be identified in the future. If we fail to maintain effective internal control over financial reporting in the future, we and our independent registered public accounting firm may not be able to conclude that we have effective internal control over financial reporting. This could in turn result in the loss of investor confidence in the reliability of our financial statements and negatively impact the trading price of our common shares, inhibiting our ability to raise sufficient capital on favorable terms.

 

***We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of our ordinary shares.***

 

Based on the current market price of our ordinary shares and the composition of our income, assets and operations, we do not expect to be treated as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes for the current taxable year or in the foreseeable future. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you the U.S. Internal Revenue Service will not take a contrary position. Furthermore, this is a factual determination that must be made annually after the close of each taxable year. If we are a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information—E. Taxation—Material United States Federal Income Tax Considerations”) holds our ordinary shares, certain adverse U.S. federal income tax consequences could apply to such U.S. Holder. See “Item 10. Additional Information—E. Taxation—Material United States Federal Income Tax Considerations—Passive Foreign Investment Company.”

 

**Item 4.**                                           **Information on the Company**

 

A.                                                                               History and Development of the Company

 

Our controlling shareholder is Premier Education Holdings Ltd, which is controlled by Baring Private Equity Asia.

 

Our business was founded in 1972.  From 1997 through August 2008, we conducted business as Nord Anglia Education plc, whose shares were listed on the main board of the London Stock Exchange.  In August 2008, Nord Anglia Education plc was acquired in a going-private transaction led by Baring Private Equity Asia.  Premier Education (UK) Holdco Limited, renamed “Nord Anglia Education (UK) Holdings plc” in 2012, was the buying consortium’s ultimate holding vehicle that owned the acquiring entity that purchased all the shares in Nord Anglia Education plc.  After the acquisition, Nord Anglia Education plc was delisted and renamed “Nord Anglia Education Limited.”  We, Nord Anglia Education, Inc., were incorporated in the Cayman Islands as an exempted company in 2011, and in 2012 shareholders of Nord Anglia Education (UK) Holdings plc swapped their shares for shares in our company.

 

Our principal executive offices are located at Level 12, St. George’s Building, 2 Ice House Street, Central, Hong Kong.  Our telephone number at this address is +852-3951-1100.  Our registered office is located at Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

 

21

----

Table of Contents

 

B.                                                                               Business Overview

 

**Overview**

 

We believe we are the world’s leading global operator of premium international schools.  We teach over 34,300 students, from kindergarten through the end of secondary school (“K-12”), at our 42 premium schools in China, Europe, ME/SEA and North America.  We primarily operate in geographic markets with high FDI, large expatriate populations and rising disposable income.  We believe that these factors contribute to high demand for premium schools and strong growth in our business.  Our student enrollment increased at a compound annual growth rate (“CAGR”) of 29% from the end of fiscal 2008 to the end of fiscal 2015.

 

Our commitment to quality drives our strong operating performance.  Our highly qualified principals, teachers and support staff strive to maximize every student’s academic performance.  Although we accept students with a wide range of academic ability, for many of whom English is their second language, our students’ standardized examination results exceed global averages. In 2015, our IBDP pass rate equaled 90.9% compared to the IB World Average of 79.3%, and 12.5% of our IBDP students scored over 40 points out of 45, compared with the IB World Average of 6.7%. In 2015, one out of three of our graduates matriculated to one of the world’s top 100 universities in QS World University Rankings.  Our academic quality helps us maintain our market-leading position, supports our premium pricing and drives consistent enrollment growth.

 

Our schools derive all of their revenue from private sources and therefore are not exposed to government funding risk.  As of September 27, 2015, 63% of our students were expatriates and 37% were from local families.  Employers of expatriates fund most of our tuition fees as part of expatriate compensation packages, through allowances or direct payments to our schools.  Education allowances are often key recruitment incentives for expatriate employees.

 

Our attractive business model leads to good visibility, price inelasticity, low capital requirements and strong cash generation.  Our average student tenure of 3.6 years provides good visibility on future enrollments and revenues. Giving pro forma effect to our acquisition of our four schools in Vietnam and six schools from Meritas, our average tenure in the last two years would have been 4.3 years. Our private-pay model and the importance of education to parents make us resilient to changing economic conditions and government policies.  We have been able to increase tuition fees at an average of approximately 4-5% per year over the last five years.  Our capital-light approach to growth enables us to generate high returns on capital.  We focus on securing high-quality, purpose-built schools through long-term leases, with the construction costs of many of our schools funded by real estate developers desiring premium schools within their residential and commercial developments.  Our strong margins and working capital dynamics make our business highly cash generative.  We generally receive a large portion of our schools’ revenue before the beginning of the fiscal year.  As an example, we received approximately 51% of our fiscal 2015 schools’ revenue before August 31, 2014.

 

We have grown our business significantly since 2008.  We increased our student capacity and enrollments from 5,393 places and 4,010 students as of August 31, 2008 to 48,998 places and 34,314 students as of November 15, 2015.  During that period, we expanded capacity at our existing schools by 4,651 places, developed six greenfield schools with a total of 7,012 places and acquired 31 schools with a total of 31,942 places.

 

In fiscal 2015, we had revenue of $577.0 million, profit for the period of $8.6 million and Adjusted EBITDA of $133.7 million.  In fiscal 2015, our schools in China, Europe, ME/SEA and North America contributed 32.5 %, 23.7%, 29.1% and 14.7% of our schools’ revenue, respectively.

 

The following table shows our regional enrollments as of November 15, 2015:

 
| ** **                       | ** ** | **November 15,   2015** | ** ** | **% of Total** | ** ** |
|----------------------------------|------------|------------------------------|------------|--------------------------|------------|
|                             |       |                         |       |                     |       |
| Full-time   equivalent students: |       |                         |       |                     |       |
| China                            |       | 5,752                        |       | 17                       | %          |
| Europe                           |       | 6,492                        |       | 19                       | %          |
| ME/SEA                           |       | 12,630                       |       | 37                       | %          |
| North America                    |       | 9,440                        |       | 27                       | %          |
| Total                            |       | 34,314                       |       | 100                      | %          |

 

**Our Market Opportunity**

 

We primarily target geographic markets with high FDI, large expatriate populations and rising disposable incomes, all of which increase demand for premium schools. Employers of expatriates fund most of our tuition fees. We believe that companies that rely on expatriate employees view the availability of high-quality schools as vital to recruiting and retaining key employees. In addition, many governments and business and trade associations actively promote premium international schools in their jurisdictions, recognizing that the availability of premium quality education for the children of expatriate employees is critical to attracting FDI from corporations.

 

22

----

Table of Contents

 

A majority of premium schools are family-owned and operated or managed by foundations. Family operators and foundations typically focus on academic performance, exclusivity and prestige. These operators have historically been reluctant to add capacity even when demand in their markets exceeds supply, leaving significant opportunities for companies that operate schools with high academic standards while also focusing on financial performance and growth.

 

Competitors seeking to enter the premium school market face significant barriers to entry, including:

 

·                  the lead time required to build brand recognition and reputation, both locally and globally;

 

·                  the challenges unproven operators face in securing government licenses and regulatory approval in many jurisdictions;

 

·                  in many markets, the scarcity of real estate in desirable areas that can accommodate a sizeable campus with the comprehensive and high-quality facilities expected of premium schools;

 

·                  the tendency of property developers and landlords to require school operators with significant financial resources and a reputation for quality in order to enhance the value of their adjacent residential or retail real estate; and

 

·                  the tendency of students to stay enrolled in the same school until they graduate or their parents relocate.

 

We believe increasing globalization and a growing emphasis by parents on high-quality education for their children will drive strong growth in many markets. There are few premium-quality operators with the global scale required to benefit from this attractive opportunity.

 

**Our Strengths**

 

***Global Market Leadership and Partner of Choice***

 

We believe we are the world’s leading operator of premium international schools. We teach over 34,300 students at our network of 42 premium international schools in 34 locations in 15 countries.  We are a trusted partner of key stakeholders, including governments, sellers of premium schools and real estate developers, and enjoy significant benefits of scale.

 

Our strong reputation among governmental authorities, which recognize the importance of premium schools in attracting FDI, helps us secure schools in prime education markets.  For example, in April 2013, following an extensive tender process, the Hong Kong Education Bureau awarded us a vacant school site in Kowloon, Hong Kong.  This school was one of three allocated by the Hong Kong Education Bureau in 2013, and we were the only school operator without an established school in Hong Kong to be granted a campus.  We opened the school in September 2014 with a capacity of 792 places.

 

Sellers of premium schools often focus on the operating record, financial stability and reputation of potential buyers.  Our acquisitions in China, Switzerland, Thailand, Singapore, Cambodia and Vietnam resulted from exclusive discussions with sellers who were primarily concerned with the success and reputation of their schools under their new owners.  In addition, real estate developers and landlords seek school operators with a reputation for quality in order to enhance the value of their adjacent residential or retail real estate.  For example, in Shanghai-Puxi we collaborated with a developer and the local government, who were eager to develop Puxi into an attractive location for expatriates.  We started the school in 2005 with a capacity of 668 places and have increased capacity to 2,000 places, with all of the building expansion costs funded by the developer.

 

Our reputation also helps create unique opportunities to improve our educational offering. For example, in February 2015 we announced The Juilliard-Nord Anglia Performing Arts Program, a multifaceted collaboration to provide an innovative arts education curriculum for students in grades K-12. Developed in conjunction with The Juilliard School, the world-renowned performing arts conservatory, the program seeks to inspire and equip our students with the skills, curiosity and cultural literacy to engage in the performing arts throughout their lives.

 

23

----

Table of Contents

 

Our market leadership and scale also enable us to:

 

·                  recruit, develop and retain top-quality principals and teachers;

 

·                  set tuition fees at the high end of each market;

 

·                  apply best practices throughout our network, including cost management and control through benchmarking;

 

·                  stay at the forefront of educational theory; and

 

·                  offer initiatives, such as the Global Campus and The Juilliard-Nord Anglia Performing Arts Program, which develop our students into world-ready, global citizens.

 

***Premium Quality Education with Strong Brand Recognition***

 

Our schools have excellent reputations and are among the most respected premium K-12 school brands in their markets.  We focus on the needs of individual students and track each student’s performance against personalized targets to help maximize every student’s academic achievement.

 

Our approach to education and the benefits of belonging to a global network of premium schools help to distinguish our schools from our competitors. For example, we have developed a supplementary learning platform, the Global Campus, which is accessible to all of our students from grade 4. The Global Campus Online is an Internet-based system that complements our curricula and allows our students to interact online with experts in various fields and collaborate with students at any of our schools around the world. This innovative learning environment creates independent learners, prepares students for future university study and helps them to become global citizens. As part of the Global Campus, students also have opportunities to come together from around the world and take part in unique experiences in the Global Campus Worldwide. In 2014, our Global Campus Worldwide brought 100 students from 18 schools in 11 countries to Tanzania for an eight-day transformational learning experience, and in 2015 our Global Orchestra Challenge invited students of all ages from all of our schools to audition for choir, soloist and instrumental ensembles which will join together in New York for a week-long residential program culminating in a public performance to celebrate their musical accomplishments in June 2015.

 

Although our admissions policy is not based on academic ability, and English is not the first language of many of our students, our students’ standardized examination results well exceed global averages.  In 2015, our International Baccalaureate Diploma Program (“IBDP”) pass rate equaled 90.9% compared to the IB World Average of 79.3%, and 12.5% of our IBDP students scored over 40 points out of 45, compared with the IB World Average of 6.7%.  In 2015, one out of three of our graduates matriculated to one of the world’s top 100 universities in QS World University Rankings.

 

Our reputation for quality and a distinctive approach to education result in high referral rates, with 92% of parents of children at our schools whom we surveyed in the academic year 2014/2015 reporting that they would recommend our schools.  Our reputation and attention to individual students are key to parents who choose our schools over competing schools.

 

Our principals and teaching staff are highly qualified and experienced, and we recruit them through a rigorous hiring process.  We are able to attract highly qualified staff through our international scale, reputation for quality and competitive compensation packages.  We emphasize on-going professional development and a policy to promote from within to attract and retain teachers.  Initiatives such as Nord Anglia University, which provides comprehensive professional training programs for teachers and principals, underscore our commitment to professional development.

 

In our drive to align our teacher recruitment practices with our status as the leading global premium schools organization, we launched the Outstanding Teachers for Outstanding Schools project (“OTOS”) across our network of schools in August 2012. OTOS aims to attract premium candidates, maintain an outstanding recruitment process and ensure that we select the highest quality candidates. As part of OTOS, we hold an annual teacher recruitment event in London that is exclusive to Nord Anglia Education’s schools. We believe we are the only premium schools organization to host an exclusive event of this nature. Our OTOS recruitment event held in London in January 2015 attracted 9,688 applications for 284 job advertisements for our schools.

 

24

----

Table of Contents

 

***Superior Business Model***

 

Our business model emphasizes operational efficiency and uses a data-driven approach to enhance student achievement, growth and profitability.  Our global, regional and school teams track and analyze key performance indicators and we refine our operating strategy accordingly.

 

We focus on the following key areas of our operations:

 

·                  *Academic quality assurance*:  We monitor the academic quality of our schools and assess the quality of schools we acquire through a structured quality review framework that includes an annual review by our central Schools’ Academic Performance Board.  In addition, we perform ad hoc assessments of schools as required.  We evaluate the achievement of students, the quality of teaching, the behavior and safety of students, the quality of school leadership and management and overall effectiveness.

 

·                  *Student recruitment*:  We have a systematic approach to student recruitment.  Our comprehensive recruitment strategies are adapted to each school’s local market and executed by each school’s principal, admissions team and marketing manager.  We use a relationship management system to monitor an applicant’s file from initial inquiry through enrollment.

 

·                  *Pricing*:  We monitor local market trends, including economic developments and supply and demand dynamics, to set tuition fees.

 

·                  *Cost management*:  We use metrics-based management throughout our school operations to enhance efficiencies.  We achieve operational efficiencies through various means, including efficient class scheduling and optimizing our teaching resources.  We accomplish this by minimizing teachers’ administrative responsibilities, allowing them to spend more time focused on teaching.

 

·                  *Capacity planning*:  Our expertise in planning and adding capacity to meet demand enables us to manage growth by efficiently utilizing capacity at existing schools and expanding as necessary.  We also work with architectural consultants who specialize in optimizing school configurations.  Our approach to growing our network of schools is highly analytical, includes the use of demographic and economic models and we often commission third-party market research to identify opportunities for expansion.

 

We use a balanced scorecard of key performance indicators that measures each school’s performance from the perspective of all stakeholders, including parents, students, teachers and investors.  Our balanced scorecard evaluates each school based on student safety, student performance, financial performance, staff performance and marketing and admissions.  By regularly monitoring key performance indicators at each school, we can ensure that its operations meet our expectations.  We learn of potential problems at any school in real time and intervene as required.  This helps us maintain consistency across our schools and allows us to quickly integrate newly acquired or greenfield schools, which makes our business highly scalable.

 

***Capital Efficient, Returns-Focused Approach to Growth***

 

We have significantly grown our business while driving high returns on capital.  Our capital efficient expansion strategy focuses on securing high-quality, purpose-built schools through long-term leases, with the construction cost of many of our schools funded by real estate developers.  When we acquire existing schools, we often acquire the operating businesses and enter into long-term leases with the sellers who retain ownership of the real estate.

 

***Highly Attractive Financial Profile***

 

·                  *High Visibility and Predictability*:  We operate a highly visible and predictable business. Average student tenure across our network in the last five years was 3.6 years. Giving pro forma effect to acquisition of four schools in Vietnam and six schools from Meritas, our average tenure in the last two years would have been 4.3 years.  In our latest academic year we lost only 2% of our students for reasons related to academic quality, student needs or tuition levels, based on parent responses to our exit surveys.  At a majority of our schools, our terms and conditions require a full term’s notice of withdrawal for a refund of prepaid tuition.  The final academic term at most of our schools starts in April of each year and historically we have had few requests for refunds.  We track inquiries and visits to estimate new enrollments.  In fiscal 2015, we converted 50% of prospective student visits to our schools into enrollments (excluding schools acquired in 2015).  As a result, we can estimate in-year and year-to-year student re-enrollment, new enrollment and revenue.

 

·                  *Favorable Working Capital Dynamics*:  We generally receive a large portion of our schools’ revenue before the beginning of the fiscal year. As an example, we received approximately 51% of our fiscal 2015 schools’ revenue before August 31, 2014.  We collected an additional 25% of our schools’ revenue prior to January 2015, and an additional 17% prior to April 2015.  The timing of our schools’ revenue collection allows us to finance our operating expenses principally with pre-paid tuition fees.

 

25

----

Table of Contents

 

·                  *Price Inelasticity Supported by Private Pay Model*:  We have been able to increase our tuition fees at an average of approximately 4-5% per year over the last five years, which we believe exceeds the median rate of inflation in the markets where our schools are located, while continuing to grow enrollment organically.  Our private pay model insulates our schools from volatility in government funding resulting from changing economic conditions or policies.  The high quality of our schools supports our premium pricing. A majority of our tuition fees are directly or indirectly paid by employers, who we believe accept price increases because education allowances typically represent only a small percentage of an expatriate’s total compensation.  We believe self-funding expatriates and affluent local families also accept our price increases because of the importance they place on a quality education for their children.

 

·                  *Strong Margins*:  Our premium pricing and operating efficiencies result in strong margins.  In fiscal 2015, our Adjusted EBITDA margin was 23.2%.  With capacity utilization of 75% as of November 15, 2015, we have significant scope to expand our margins by growing enrollments without increasing capacity.

 

***Experienced Management Team with Local and Global Expertise***

 

Our management team combines seasoned executives with experience in running publicly listed companies and leading education specialists.  Andrew Fitzmaurice has been our CEO for more than 12 years and was CEO when Nord Anglia Education plc was listed on the main board of the London Stock Exchange.  Over the last several years, we have bolstered our senior management team with a number of significant appointments, including our corporate development director, education director, human resources director and marketing director. Our senior management team is supported by experienced regional managers and local school administrators who implement our operating philosophy in each of our markets.

 

**Our Strategies**

 

***Continue to Deliver High-Quality Education and Strong Outcomes for Students***

 

Our commitment to quality will remain the foundation of our operating performance and growth.  We will continue to offer our students an excellent education, recruit and retain experienced and highly qualified principals and teachers and strive to help each student achieve high academic performance.  We believe that building upon our reputation for quality and ensuring that our schools live up to the expectations of students and parents are key to strengthening our position as the world’s leading international operator of premium schools.

 

***Increase Student Enrollments at Our Existing Schools***

 

We aim to continue to increase enrollments by applying our systematic processes for generating inquiries, converting inquiries to enrollments and retaining existing students.  Our school principals lead the recruitment effort with dedicated admissions and marketing teams.  We generate inquiries and visits through referrals and digital and other marketing activities.  In fiscal 2015, we converted 50% of prospective student visits to our schools into enrollments (excluding schools acquired in fiscal 2015).

 

***Continue Price Leadership***

 

We will continue to invest in our teachers and campuses to enable us to consistently provide high-quality premium education.  Improving our schools supports our strong reputation in the markets where we operate, which we expect will allow us to continue increasing prices in excess of inflation.

 

***Increase Capacity***

 

Using our capital efficient, returns-focused approach, we may increase capacity across our geographically diverse school portfolio.

 

·                  *Capacity Expansion at Our Existing Schools*.  At our existing schools, we may increase capacity where market demand supports additional places.  We will continue to develop our relationships with real estate developers and landlords, who we expect will continue to fund our capacity expansion.  Our systematic approach to capacity expansion has enabled us to add 4,651 places to existing schools since August 31, 2008.

 

26

----

Table of Contents

 

·                  *Greenfield Expansion in Existing and New Markets*.  We may strategically open new schools in markets where we currently operate and in attractive new markets.  We have successfully completed eleven greenfield projects since 1992. We have one greenfield project under development in Houston where we are partnering with a real estate developer to build a new campus with approximately 2,000 places to open in September 2016 and our existing campus will relocate to the new campus at that time.

 

In many new markets, our global market leadership and premium quality attract inquiries from governments, real estate developers and landlords.  Governments and business and trade associations recognize that the availability of premium quality education for the children of expatriate employees is critical to attracting FDI from corporations.

 

·                  *Pursue Acquisitions*.  An abundance of single-site operators provides a continuous supply of incremental acquisition opportunities.  Potential sellers often engage with us in exclusive negotiations because of our reputation, success at integrating schools, capital resources and interest in keeping sellers involved as landlords and consultants without the ongoing responsibility of operating the school.  We evaluate each potential acquisition using a returns-based approach focused on the school’s quality, reputation, curriculum, local market dynamics, tuition levels, financial position and opportunities for growth.  Once we acquire a school, our proven operating model drives educational improvements, enrollment growth and operational efficiencies.  We have a highly successful record of acquiring and integrating schools.

 

**Our Approach to Academic Quality**

 

Although our schools are inclusive in that they accept students with a wide range of academic ability, we ensure that our students achieve academic results that are comparable to those of students attending schools with admissions policies based on academic ability.

 

The key elements that we focus on to promote academic quality are:

 

*An academically rigorous educational program*

 

We believe that our personalized approach to teaching and learning can help every student achieve strong academic results. We use a customized technology platform designed around individual students, which enables us to track the performance of individual students as well as benchmark within and across our schools. We believe that this maximizes our students’ performance by giving each student and our faculty an accurate gauge of individual progress. In addition, this platform allows us to set clear objectives for a classroom, class year or entire school and intervene as required. Our technology platform also creates accountability among faculty members and drives consistency in instruction by applying comparable metrics across our network.

 

In addition, we have a supplementary informal online learning environment, our Global Campus Online, which is accessible to all of our students. The Global Campus Online is an Internet-based system that complements our curricula while allowing our students to interact online with experts in various fields and collaborate with students at any of our schools around the world. This innovative learning environment creates independent learners, preparing them for future university study and turning them into global citizens. Almost all of our schools teach the English National Curriculum.

 

*Highly qualified principals, teachers and administrative staff*

 

We demonstrate our commitment to premium quality education by hiring and retaining highly qualified principals, teachers and administrative staff. Our international reputation allows us to recruit from among the best candidates. We generally require our teachers to have formal teacher qualifications, such as a Post Graduate Certification in Education or its equivalent, and at least two years of teaching experience.

 

Our principals and teachers also benefit from the centralized support and experience of our educational team. In addition, we have in place various continuing professional development initiatives, including Nord Anglia University, which is designed to prepare our staff for career progression and help continuously improve all of our teachers. We regularly and rigorously review our principals and teaching staff to ensure that their performance meets our high standards.

 

27

----

Table of Contents

 

*Small class sizes*

 

We restrict classes to a maximum of 22 students, with a few exceptions, in order to provide each student with close teacher interaction and individual attention and support. This benefits students and promotes staff retention by providing a rewarding environment for our teachers.

 

*High-quality school facilities*

 

Our school facilities, such as science laboratories, music and theater resources, swimming pools and other sports facilities enhance the educational experience of our students. In addition, the majority of classrooms provide interactive digital technologies that facilitate student participation. We use internationally-recognized architectural consultants specializing in school design to develop new facilities and expand or refurbish our existing schools in order to create outstanding learning environments for our staff and students.

 

**Our Schools**

 

We operate 42 schools in 34 locations across China, Europe, ME/SEA and North America.  The following table sets forth certain information about each school and its educational programs.

 
| **School**                                                                    | ** ** | **Date   Founded** | ** ** | **Date   Acquired/   Founded** | ** ** | **Curriculum**                               | ** ** | **Qualification**                          |
|-------------------------------------------------------------------------------|------------|--------------------|------------|--------------------------------|------------|----------------------------------------------|------------|--------------------------------------------|
| **China**                                                                     |       |               |       |                           |       |                                         |       |                                       |
| Nord Anglia   International School Shanghai, Pudong (Pudong, Shanghai, China) |       | 2002               |       | 2002                           |       | English National Curriculum                  |       | IGCSE/IBD                                  |
| The British   International School Shanghai, Puxi (Puxi, Shanghai, China)     |       | 2005               |       | 2005                           |       | English National Curriculum                  |       | IGCSE/IBD                                  |
| The British   School of Beijing, Sanlitun (Sanlitun, Beijing, China)          |       | 2003               |       | 2009                           |       | English National Curriculum                  |       | K-6(1)                                     |
| The British   School of Beijing, Shunyi (Shunyi, Beijing, China)              |       | 2009               |       | 2009                           |       | English National Curriculum                  |       | IGCSE/IBD                                  |
| The British School   of Guangzhou (Guangzhou, China)                          |       | 2006               |       | 2013                           |       | English National Curriculum                  |       | IGCSE/A levels                             |
| Léman   International School (Chengdu, China)                            |       | 2009               |       | 2015                           |       | IB Curriculum                                |       | AP/IBD                                     |
| Nord Anglia   International School Hong Kong (Hong Kong, China)               |       | 2014               |       | 2014                           |       | English National Curriculum                  |       | K-9(1)                                     |
| **Europe**                                                                    |       |               |       |                           |       |                                         |       |                                       |
| The British   School Warsaw (Warsaw, Poland)                                  |       | 1992               |       | 1992                           |       | English National Curriculum                  |       | IGCSE/IBD                                  |
| The English   International School Prague (Prague, Czech Republic)            |       | 1995               |       | 1995                           |       | English National Curriculum                  |       | IGCSE/IBD                                  |
| The British   International School Bratislava (Bratislava, Slovakia)          |       | 1998               |       | 1998                           |       | English National Curriculum                  |       | IGSE/IBD                                   |
| The British   International School Budapest (Budapest, Hungary)               |       | 2002               |       | 2002                           |       | English National Curriculum                  |       | IGCSE/IBD                                  |
| Collège Beau-Soleil   (Villars-sur-Ollon, Switzerland)                   |       | 1910               |       | 2011                           |       | French and Swiss Curriculum                  |       | IBD or French Bac                          |
| Collège   Champittet Pully (Pully, Switzerland)                          |       | 1903               |       | 2011                           |       | French and Swiss Curriculum                  |       | French Bac/Swiss Maturité/ IBD        |
| Collège   Champittet Nyon (Nyon, Switzerland)                            |       | 2007               |       | 2011                           |       | French and Swiss Curriculum                  |       | K-7(1)                                     |
| La Côte   International School Aubonne (Aubonne, Switzerland)            |       | 2008               |       | 2011                           |       | English National Curriculum and IBC          |       | IBD                                        |
| Collège du Léman   (Geneva, Switzerland)                            |       | 1960               |       | 2005                           |       | U.S., French, Swiss & IB Curriculum |       | AP/IBD/ICSE/Swiss Maturité/French Bac |
| International   College Spain (Madrid, Spain)                                 |       | 1982               |       | 2013                           |       | IB Curriculum                                |       | IBD                                        |
| **ME/SEA**                                                                    |       |               |       |                           |       |                                         |       |                                       |
| Nord Anglia   International School Dubai (Dubai, UAE)                         |       | 2014               |       | 2014                           |       | English National Curriculum                  |       | IGCSE/IBD                                  |
| The British   International School Abu Dhabi (Abu Dhabi, UAE)                 |       | 2009               |       | 2013                           |       | English National Curriculum                  |       | IGCSE/IBD                                  |

 

28

----

Table of Contents

 
| **School**                                                                                     | ** ** | **Date   Founded** | ** ** | **Date   Acquired/   Founded** | ** ** | **Curriculum**                | ** ** | **Qualification**  |
|------------------------------------------------------------------------------------------------|------------|--------------------|------------|--------------------------------|------------|-------------------------------|------------|--------------------|
| Compass   International School Doha, Gharaffa (Gharaffa, Doha, Qatar)                          |       | 2006               |       | 2013                           |       | English National Curriculum   |       | K-6(1)             |
| Compass   International School Doha, Madinat Khalifa (Madinat Khalifa, Doha, Qatar)            |       | 2010               |       | 2013                           |       | English National Curriculum   |       | IGCSE(1)           |
| Compass   International School Doha, Rayyan, (Al Rayyan, Doha, Qatar)                          |       | 2009               |       | 2013                           |       | English National Curriculum   |       | K-6(1)             |
| Nord Anglia   International School, Al Khor (Al Khor, Qatar)                                   |       | 2012               |       | 2013                           |       | English National Curriculum   |       | K-9(1)             |
| Regents   International School Pattaya (Pattaya, Thailand)                                     |       | 1994               |       | 2012                           |       | English National Curriculum   |       | IGCSE/IBD          |
| St Andrews   International School Bangkok (Bangkok, Thailand)                                  |       | 1997               |       | 2013                           |       | English National Curriculum   |       | IGCSE/IBD          |
| Dover Court   International School (Singapore)                                                 |       | 1972               |       | 2014                           |       | English National Curriculum   |       | IGCSE              |
| Northbridge   International School Cambodia (Phnom Penh, Cambodia)                             |       | 1996               |       | 2014                           |       | English National Curriculum   |       | IBD                |
| The British International   School, Ho Chi Minh City (Ho Chi Minh City, Vietnam)               |       | 2000               |       | 2015                           |       | English National Curriculum   |       | IGCSE/IBD          |
| The British   International School, Hanoi (Hanoi, Vietnam)                                     |       | 2012               |       | 2015                           |       | English National Curriculum   |       | IGCSE/A-Levels     |
| The British Vietnamese   School, Ho Chi Minh City (Ho Chi Minh City, Vietnam)                  |       | 2011               |       | 2015                           |       | English National Curriculum   |       | IGCSE/A-Levels     |
| The British   Vietnamese School, Hanoi (Hanoi, Vietnam)                                        |       | 2012               |       | 2015                           |       | English National Curriculum   |       | IGCSE/A-Levels     |
| **North   America**                                                                            |       |               |       |                           |       |                          |       |               |
| The British   School of Washington (Washington D.C., U.S.A.)                                   |       | 1998               |       | 2013                           |       | English National Curriculum   |       | IGCSE/IBD          |
| The British   International School of Boston (Boston, Massachusetts, U.S.A).                   |       | 2000               |       | 2013                           |       | English National Curriculum   |       | IGCSE/IBD          |
| The British International   School of Houston (Houston, Texas, U.S.A.)                         |       | 2000               |       | 2013                           |       | English National Curriculum   |       | IGCSE/IBD/A-Levels |
| The British   International School of Chicago, Lincoln Park (Chicago, Illinois,   U.S.A.) |       | 2001               |       | 2013                           |       | English National Curriculum   |       | IGCSE/IBD          |
| The British   International School of Chicago, South Loop (Chicago, Illinois, U.S.A.)     |       | 2015               |       | 2015                           |       | English National Curriculum   |       | IGCSE/IBD          |
| The British   International School of Charlotte (Charlotte, North Carolina, U.S.A.)            |       | 2003               |       | 2013                           |       | English National Curriculum   |       | IGCSE              |
| Nord Anglia   International School New York (New York, U.S.A.)                                 |       | 2011               |       | 2013                           |       | English National Curriculum   |       | K-6(1)             |
| The Village   School (Houston, Texas, USA)                                                     |       | 1966               |       | 2015                           |       | U.S. & IB Curriculum |       | AP/IBD             |
| North Broward   Preparatory School (Coconut Creek, Florida, USA)                               |       | 1957               |       | 2015                           |       | U.S. & IB Curriculum |       | AP/IBD             |
| Windermere   Preparatory School (Windermere, Florida, USA)                                     |       | 2000               |       | 2015                           |       | U.S. & IB Curriculum |       | AP/IBD             |
| Instituto San   Roberto (Monterrey, Mexico)                                                    |       | 1982               |       | 2015                           |       | U.S. & IB Curriculum |       | K-9(1)             |

 

----

(1)                                 This school educates students in pre-qualification years.

 

“AP” stands for Advanced Placement; “IBD” stands for International Baccalaureate Diploma Program; and “ICSE” stands for International General Certificate of Secondary Education.

 

***Our Seven Schools in China***

 

Our schools in China all use English as the primary language of instruction and, in compliance with our Chinese education licenses, each student receives four lessons in Mandarin a week (except in Hong Kong, where this is optional).

 

All of our schools are located in prime areas for expatriates and have premium sporting and extracurricular facilities.

 

29

----

Table of Contents

 

*Nord Anglia International School Shanghai, Pudong —Pudong, Shanghai, China*

 

We opened this school, our first school in China, in 2002 with an initial capacity of 100 places.  The school now has a capacity of 1,800 places.  The school is located within a large scale residential development in Pudong, approximately five miles from the center of Shanghai in the free trade zone.

 

Its facilities include science laboratories, computer suites, art, music and physical education rooms, libraries, a 1,000-seat state-of-the-art theater, a new secondary school building, three indoor sports halls and a 25-meter indoor swimming pool.

 

As of September 27, 2015, 97% of the students at this school were expatriates.

 

*The British International School Shanghai, Puxi—Puxi, Shanghai, China*

 

We opened this school in 2005 with an initial capacity of 668 places and the school now has a capacity of 2,000 places.  The school is adjacent to several high-end residential developments popular with expatriate families.  The school’s facilities include two gymnasiums, two swimming pools of 15 and 25 meters, a dance studio, a fitness suite, outdoor basketball courts, four tennis courts, one astro-turf football field and playing fields.  Other facilities include two libraries, a 250 seat auditorium, a 500 seat auditorium, an internet cafe, science laboratories, music rooms and two cafeterias.  The expansion to this school was officially opened by His Royal Highness Prince Andrew in 2011.

 

As of September 27, 2015, 98% of the students at this school were expatriates.

 

*The British School of Beijing, Shunyi—Shunyi, Beijing, China*

 

We acquired this school in 2009 with a capacity of 400 places and moved it to new custom built facilities with 1,500 places one mile from its original location.  The school is located in a large residential area containing many expatriate developments in suburbs on the outskirts of Beijing.  The school’s campus includes outdoor and indoor sport facilities, gymnasiums, fitness suites, a football field and tennis and basketball courts, along with an indoor swimming pool and dance studio.  In addition, the school has two theaters, dedicated music rooms, computer music suites, a recording studio, a Lego robotics laboratory, science laboratories and art studios.  The school was officially opened by His Royal Highness Prince Andrew in 2010.

 

As of September 27, 2015, 100% of the students at this school were expatriates.

 

*The British School of Beijing, Sanlitun—Sanlitun, Beijing, China*

 

We acquired this school in 2009 with a capacity of 280 places and the school now has a capacity of 600 places.  The school is located in the heart of the Embassy district of Beijing and educates students from age three to age 13.  Its facilities include a football pitch, a full size gymnasium, an assembly hall, tennis and basketball courts and an Astroturf play area with climbing frames.

 

As of September 27, 2015, 100% of the students at this school were expatriates.

 

*The British School of Guangzhou—Guangzhou, China*

 

We acquired this school in 2013 with a capacity of 904 places and the school now has a capacity of 1,184 places.  The school is located on the shores of scenic Nanhu Lake, a short drive from the business district of Guangzhou.  The school features separate campuses for lower- and upper-school students.  Facilities include gymnasiums, four basketball courts, four football pitches, a driving range and a top-class swimming pool complex.  In addition, the school has a theater, three fully-equipped music rooms, a dance studio and two libraries.

 

As of September 27, 2015, 100% of the students at this school were expatriates.

 

*Léman International School—Chengdu, China*

 

We acquired Léman International School in June 2015 as part of the Meritas acquisition with a capacity of 1,050 places. Founded in 2009, Léman International School is located near the city center of Chengdu. The expansive campus features a library, state-of-the-art media center, science and computer labs, large dance and theater studio, art and music studios, gymnasium, and a 25-meter heated swimming pool. Outdoor facilities include an extensive green space with a 400m/6 lane athletic track, two soccer fields and tennis courts.

 

As of September 27, 2015, 89% of the students at this school were expatriates.

 

30

----

Table of Contents

 

*Nord Anglia International School Hong Kong—Hong Kong, China*

 

We opened this school in September 2014 with a capacity of 792 places. The school’s facilities include a large sports and performance hall, specialist classrooms for music, art, drama and science and a Learning Resource Centre that can be used for individual and group study. A 25 meter enclosed swimming pool is currently under development and is scheduled to open in 2015.

 

As of September 27, 2015, 78% of the students at this school were expatriates.

 

***Our Ten Schools in Europe***

 

*Collège Champittet Pully—Pully, Switzerland*

 

Founded by Dominican monks in 1903, we believe that Collège Champittet is one of the best known private schools in Switzerland.  The school is located near the banks of Lake Geneva in Lausanne.  An affiliate of our parent company acquired this school in 2009 and we acquired it in February 2011. The school includes high-quality academic and recreation facilities including sports fields, playgrounds, a library, science laboratories, a chapel, a dining hall and cafeteria and computer suites.  The school also has boarding accommodation for up to 100 students. The school has a capacity of 944 places.

 

As of September 27, 2015, 28% of the students at this school were expatriates.

 

*Collège Champittet Nyon—Nyon, Switzerland*

 

This school opened in 2007 and was acquired by an affiliate of our parent company in 2009.  We acquired it in February 2011 in conjunction with the acquisition of Collège Champittet-Lausanne. The school is located near the banks of Lake Geneva between Geneva and Lausanne.  Its facilities include playgrounds, a dining hall and a computer lab. The school has a capacity of 240 places.

 

As of September 27, 2015, 15% of the students at this school were expatriates.

 

*Collège Beau-Soleil—Villars-sur-Ollon, Switzerland*

 

We acquired this boarding school in January 2011 with a capacity of 220 places and the school now has a capacity of 240 places.  The school is located in the Alpine region not far from Lake Geneva.  The school’s facilities include an Astroturf pitch with seating, premium boarding facilities, a recently renovated art center, a fitness center, two restaurants, a theater and a private ski slope.  Founded in 1910, Beau-Soleil is one of the oldest Swiss educational establishments.

 

As of September 27, 2015, 94% of the students at this school were expatriates.

 

*La Côte International School—Aubonne, Switzerland*

 

This school was founded in 2008 and we acquired the school in September 2011.  At acquisition, the school had a capacity of 220 places and was located near Lake Geneva in Gland.  In September 2014, we relocated the school to a new state-of-the-art campus in Aubonne, Switzerland with a total capacity of 840 places. The new campus boasts 44 classrooms and 12 special rooms designed for science, computing, art and music.

 

As of September 27, 2015, 73% of the students at this school were expatriates.

 

*Collège du Léman—Geneva, Switzerland*

 

We acquired Collège du Léman in June 2015 as part of the Meritas acquisition with a capacity of 2,475 places.  Founded in 1960, the school is situated at the right bank of Lake Geneva and nestled between the Jura Mountains and the lake on the outskirts of Geneva. The campus offers attractive residential facilities and recreational areas including a theater, outdoor sports grounds for tennis, basketball and football, a swimming pool and two sports domes for indoor use. The school also has boarding accommodation for approximately 275 students.

 

As of September 27, 2015, 88% of the students at this school were expatriates.

 

31

----

Table of Contents

 

*The British International School Bratislava—Bratislava, Slovakia*

 

We opened this school in 1998 with a capacity of 100 places.  The school is operated out of two locations, with one allocated for the kindergarten and Year 1 students and the other for students in Years 2 to 13.  The location for younger students has its own library, information and communication technology room, music area, and a playground.  The second building has three well-equipped science labs, three ICT rooms, two specialist music rooms, and a computer-equipped library.  The campus also has two gymnasiums, one of which has a climbing wall, a dance studio, basketball courts, a 200-meter athletics track, and a half-size football field.  In response to increasing demand, we opened the second building in 2006 bringing the school to its current capacity of 770 places.  The new facilities were formally opened by His Royal Highness Prince Andrew.

 

As of September 27, 2015, 71% of the students at this school were expatriates.

 

*The British International School Budapest—Budapest, Hungary*

 

We assumed operations of this school in 2002 with a capacity of 420 places.  In 2005, we relocated the school to new custom built facilities in its current location in Budapest’s third district.  Its facilities include two science labs, music rooms equipped with computers, a dance and drama studio, an amphitheater and a library.  Its outdoor facilities include an organic wild garden for science lessons as well as an outdoor pavilion classroom.  Its sporting facilities include a half-size football pitch, a 220-meter track, an outdoor basketball court, and a large indoor gymnasium.  The school now has a capacity of 730 places.

 

As of September 27, 2015, 68% of the students at this school were expatriates.

 

*The English International School Prague—Prague, Czech Republic*

 

We opened this school in 1995 on a site that we converted for educational use near the center of the city.  In September 2007, we moved the school to a new custom built campus with modern facilities in two buildings including a sports field, a gymnasium, two libraries, art and music rooms and a dance studio.  The classrooms are all networked, with interactive digital technologies, and each section of the school is equipped with its own computer suite.  The new campus was formally opened by Her Royal Highness Princess Anne. The school has a capacity of 550 places.

 

As of September 27, 2015, 80% of the students at this school were expatriates.

 

*The British School Warsaw—Warsaw, Poland*

 

Founded by Nord Anglia Education in 1992 in association with a local family, this was our first international school.  In 2004, we opened a new building, which was formally opened by His Royal Highness Prince Andrew, by converting a former electrical engineering college into high-quality academic facilities and this building has been further expanded and upgraded on a number of occasions.  The school boasts modern facilities, including a sports field, a gymnasium, and art and music rooms.  The school has a capacity of 1,028 places.

 

As of September 27, 2015, 54% of the students at this school were expatriates.

 

*International College Spain—Madrid, Spain*

 

We acquired International College Spain through our acquisition of WCL Group in 2013.  This prestigious school is located in the prosperous suburbs of Alcobendes and has built an excellent reputation since it was established in 1980. The campus has five science laboratories, two music rooms, six language rooms, two gymnasiums, two libraries, a dance studio, a drama room and an auditorium including a stage.  Outdoor facilities include extensive open recreational space for students, including fenced-in tennis courts and space for a football pitch. The school has a capacity of 800 places.

 

As of September 27, 2015, 65% of the students at this school were expatriates.

 

***Our Fourteen Schools in ME/SEA***

 

*The British International School Abu Dhabi— Abu Dhabi, United Arab Emirates*

 

We opened the British International School Abu Dhabi (“BISAD”) in September 2009 and in August 2010 sold our 49% equity interest in the school to Premier Education Holdings, our shareholder, and entered into an agreement to manage the school.  On September 28, 2012, Nord Anglia Education entered into an agreement to re-purchase the 49% equity interest from Premier Education Holdings.  On April 1, 2013, we began consolidating the results of BISAD under IFRS, as we obtained effective control of BISAD from that date. The school’s facilities include dedicated music rooms, a drama studio with the latest media technology, gardens and outdoor learning areas as well as a wide range of indoor and outdoor sports. The school has a capacity of 1,800 places.

 

As of September 27, 2015, 80% of the students at this school were expatriates.

 

32

----

Table of Contents

 

*Nord Anglia International School Dubai—Dubai, United Arab Emirates*

 

We opened Nord Anglia International School Dubai in September 2014 with a state-of-the-art new campus. The school has excellent facilities including an auditorium, large well-lit open plan art studios, craft centers, dark rooms and theater spaces. The school also has outdoor sports facilities, a swimming pool and three dining rooms. The school has a capacity of 1,500 places.

 

As of September 27, 2015, 99% of the students at this school were expatriates.

 

*Compass International School Doha, Rayaan—Doha, Qatar*

 

We acquired this school through our acquisition of WCL Group in 2013. Founded in 2006, this campus is situated in the west of Doha on the grounds of a former palace. Since the school first opened, extensive renovations have been completed, including the recent addition of 10 new classrooms, a large sports hall, IT facilities, a library and enhanced play facilities. The school has a capacity of 413 places.

 

As of September 27, 2015, 83% of the students at this school were expatriates.

 

*Compass International School Doha, Gharaffa —Doha, Qatar*

 

We acquired this school through our acquisition of WCL Group in 2013. The Gharaffa campus is a primary school campus and the facilities include outdoor grass play areas, a football pitch, a swimming pool, a large multipurpose hall, two libraries, a computer suite and dedicated language learning rooms. The school has a capacity of 600 places.

 

As of September 27, 2015, 83% of the students at this school were expatriates.

 

*Compass International School Doha, Madinat Khalifa —Doha, Qatar*

 

We acquired this school through our acquisition of WCL Group in 2013. The Madinat Khalifa campus opened in September 2010 to meet growing demand for places in the area. The campus is based in a residential area near the Landmark Shopping Mall. School facilities include a 20 meter swimming pool, specialist rooms for science, music, art and languages, and an air-conditioned sports hall. The school has a capacity of 720 places.

 

As of September 27, 2015, 88% of the students at this school were expatriates.

 

*Nord Anglia International School Al Khor—Al Khor, Qatar*

 

We acquired this school through our acquisition of WCL Group in 2013.  Founded in 2012, the school is located on the outskirts of Doha, 15 miles from the city limits.  The school has two science laboratories, a language room, a gymnasium and a library.  Outdoor facilities include an extensive hard and soft area for sports and recreation, including a football pitch, a basketball court and a covered courtyard area. The school has a capacity of 818 places.

 

The school was established to provide high-quality education to employees of Shell.  While Al Khor accepts students whose parents do not work for Shell, it benefits from a contract with Shell to supply up to 300 guaranteed student places. The initial contract with Shell expires in July 2016 (unless terminated early with twelve months’ notice).  We expect the contract to be extended beyond 2016.

 

As of September 27, 2015, 59% of the students at this school were expatriates.

 

*Regents International School Pattaya—Pattaya, Thailand*

 

We acquired this school on August 1, 2012. The school is located in the Eastern Seaboard region of the Gulf of Thailand, 120 kilometers southeast of Bangkok and 16 kilometers northeast of Pattaya.  The facilities at the school include a 25 meter swimming pool with audience seating, a full-size rugby and football pitch (with two additional, smaller football pitches), a double gymnasium with basketball facilities and tennis courts, a 400-seat theater, a brand new early-years building for younger children and boarding houses. The school has a capacity of 1,350 places.

 

As of September 27, 2015, 70% of the students at this school were expatriates.

 

33

----

Table of Contents

 

*St. Andrews International School Bangkok—Bangkok, Thailand*

 

We acquired this school in August 2013.  The school is located on an attractive campus close to Bangkok’s amenities and transportation links.  The school features a gymnasium, a football pitch and a 25-meter salt water swimming pool.  In addition, the school has computer suites and computer research centers, a new library, design technology and art facilities and two fully-equipped music rooms. The school has a capacity of 1,120 places.

 

As of September 27, 2015, 51% of the students at this school were expatriates.

 

*Dover Court International School—Singapore, Singapore*

 

We acquired this school in April 2014. Founded in 1972, Dover Court International School is set in 14 acres in the center of Singapore with facilities including a large swimming pool complex, a six-lane running track, a full sized soccer pitch, extensive playing fields and an indoor multi-purpose hall. The school is also equipped with modern classroom facilities, computer rooms, music halls and science labs. The school has a capacity of 1,025 places.

 

As of September 27, 2015, 93% of the students at this school were expatriates.

 

*Northbridge International School Cambodia—Phnom Penh, Cambodia*

 

We acquired this school in July 2014 with an initial capacity of 650 places. Founded in 1996, the school is situated on a 20 acre-campus and provides outstanding facilities to students. It has a world-class performing arts center, an outdoor plaza with amphitheater, a covered gymnasium, outdoor playing fields, tennis courts, and a 25-meter long by six-lane wide competition sized swimming pool. The school has a capacity of 954 places.

 

As of September 27, 2015, 42% of the students at this school were expatriates.

 

*The British International School, Ho Chi Minh City—Ho Chi Minh City, Vietnam*

 

We acquired this school in January 2015 with an initial capacity of 2,100 places. Founded in 2000, the school operates on a modern purpose-built campus in the vibrant city of Ho Chi Minh. It has superb facilities including interactive whiteboards in every primary school classroom, a 25 meter indoor swimming pool, state-of-the-art libraries, large sports halls, and a 250 seat auditorium.

 

As of September 27, 2015, 70% of the students at this school were expatriates.

 

*The British International School, Hanoi—Hanoi, Vietnam*

 

We acquired this school in January 2015 with an initial capacity of 1,718 places. Founded in 2012, BIS Hanoi is a first class, purpose-built school situated in Vinhomes, Riverside, Long Bien District, Hanoi. The campus boasts exceptional facilities including large libraries, a theater, an auditorium, a 25 meter indoor swimming pool and grass playing fields.

 

As of September 27, 2015, 22% of the students at this school were expatriates.

 

*The British Vietnamese International School, Ho Chi Minh City—Ho Chi Minh City, Vietnam*

 

We acquired this school in January 2015 with an initial capacity of 2,480 places. Founded in 2011, the BVIS HCMC campus is situated in the Binh Chanh District, Ho Chi Minh City. The facilities include a modern theater, a library, a sports hall, grass playing fields and specialist suites for Science, Music, Art and Drama. In addition, Primary classrooms also feature special ‘breakout’ rooms for dual-language work and Early Years classrooms have their own dedicated mini splash pools, sand pits and outside playground.

 

As of September 27, 2015, 5% of the students at this school were expatriates.

 

*The British Vietnamese International School Hanoi—Hanoi, Vietnam*

 

We acquired this school in January 2015 with an initial capacity of 1,350 places. Founded in 2012, this campus is conveniently situated in the city center of Hanoi. The facilities include well stocked libraries, music and computer suites, large sports halls, an auditorium with full stage, lighting and sound system and science laboratories.

 

As of September 27, 2015, 10% of the students at this school were expatriates.

 

34

----

Table of Contents

 

***Our Eleven Schools in North America***

 

*The British School of Washington—Washington, D.C.*

 

We acquired this school through our acquisition of WCL Group in 2013.  Founded in 1998, the British School of Washington was the first WCL Group school and established the British Schools of America brand.  The school is located in the Georgetown neighborhood, in the heart of Washington, D.C.  The school has four science laboratories, four language rooms, two libraries, an indoor fitness room and an auditorium including a stage.  A nearby gymnasium and playing fields are rented as required for tennis, swimming, football, athletics and rugby. The school has a capacity of 735 places.

 

As of September 27, 2015, 68% of the students at this school were expatriates.

 

*The British International School of Boston—Boston, Massachusetts*

 

We acquired this school through our acquisition of WCL Group in 2013.  The British School of Boston was founded in 2000 and has been located at its current site near Jamaica Plains in Boston since 2004.  The school has three science laboratories, a music room, a gymnasium and a dance studio.  Outdoor facilities include a playing field and wooded areas, all-weather outdoor play areas and a shared swimming pool. The school has a capacity of 480 places.

 

As of September 27, 2015, 43% of the students at this school were expatriates.

 

*The British International School of Houston—Houston, Texas*

 

We acquired this school through our acquisition of WCL Group in 2013.  Founded in 2000, the British School of Houston is located in northwest Houston, twenty minutes from downtown. The school has four science laboratories, a music room, five language rooms, two gymnasiums, two libraries, a dance studio and a drama room.  Outdoor facilities include a large outdoor space with an all-weather running track, extensive green space for play and a purpose-built all-weather play area for younger children. The school has a capacity of 1,000 places.

 

As of September 27, 2015, 93% of the students at this school were expatriates.

 

*The British International School of Chicago, Lincoln Park—Chicago, Illinois*

 

We acquired this school through our acquisition of WCL Group in 2013.  Founded in 2001, the British International School of Chicago moved in 2008 to the prestigious Lincoln Park neighborhood of Chicago, minutes from the business district. The school has three science laboratories, three music rooms, three language rooms, a gymnasium, three libraries and a dance studio.  Students also have access to third-party sports facilities. The school has a capacity of 900 places.

 

As of September 27, 2015, 13% of the students at this school were expatriates.

 

*The British International School of Chicago, South Loop—Chicago, Illinois*

 

We opened a second campus for The British International School of Chicago in September 2015. Located on South Wells Street, the new campus features a 9,000-square-foot gymnasium, technology classrooms with 3D printers, a state-of-the-art science wing, two libraries, a music recording studio and sound-proof practice rooms, a restaurant-style cafeteria, a community rooftop garden, and an on-site sports field with artificial turf. The school has a capacity of 1,100 places.

 

As of September 27, 2015, 20% of the students at this school were expatriates.

 

*The British International School of Charlotte—Charlotte, North Carolina*

 

We acquired this school through our acquisition of WCL Group in 2013.  Founded in 2003, the British American School of Charlotte is located in the Ballantyne section of Charlotte. The school has science laboratories, a computer room, an arts room, a music room, a language room, a gymnasium and a library.  Outdoor facilities include an extensive green space with a soccer pitch, and a playground area. The school has a capacity of 400 places.

 

As of September 27, 2015, 41% of the students at this school were expatriates.

 

35

----

Table of Contents

 

*Nord Anglia International School New York—New York, New York*

 

Nord Anglia International School New York was founded in 2011 and we acquired this school through our acquisition of WCL Group in 2013. The recently refurbished facilities in New York include a music room, a gymnasium and a library.  A roof area accessible by an elevator is currently being built and will be converted into an outside play area. The school has a capacity of 480 places.

 

As of September 27, 2015, 42% of the students at this school were expatriates.

 

*The Village School—Houston, Texas, USA*

 

We acquired the Village School as part of the Meritas acquisition in June 2015 with an initial capacity of 1,766 places. Founded in 1966, the Village School is the only IB boarding school in the greater Houston area, located in a residential area of West Houston near the prestigious Energy Corridor.  The school has three libraries, three computer labs, a dance studio and a gymnasium.  Outdoor facilities include a large outdoor space with athletic fields.  The school also has boarding accommodation for up to 152 students and capacity of 2,098 places.

 

As of September 27, 2015, 58% of the students at this school were expatriates.

 

*North Broward Preparatory School—Coconut Creek, Florida, USA*

 

We acquired North Broward Preparatory School as part of the Meritas acquisition in June 2015 with an initial capacity of 1,758 places. Founded in 1957, the school is a prestigious, purpose-built boarding school comprising two campuses. The primary campus is located in Coconut Creek north of Ft. Lauderdale and a second boarding campus is located in Coral Springs approximately 15 minutes’ drive away from the primary campus. The campuses offer exceptional indoor facilities including a large athletic center, elite boarding suites, gymnasium, and theater. Outdoor facilities include a running track, football and baseball field. The school also has boarding accommodation for up to 298 students. The school has a capacity of 2,090 places.

 

As of September 27, 2015, 27% of the students at this school were expatriates.

 

*Windermere Preparatory School—Windermere, Florida, USA*

 

We acquired Windermere Preparatory School as part of the Meritas acquisition in June 2015 with an initial capacity of 1,400 places. Founded in 2000, the school is located by Lake Cypress in the Windermere Rural Settlement of southwest Orange County, Florida. The expansive campus includes a library, specialist rooms for science, computers, music and art, a sports center, track and football field, baseball field and basketball and tennis courts. The school also has boarding accommodation for up to 104 students. The school has a capacity of 1,625 places.

 

As of September 27, 2015, 13% of the students at this school were expatriates.

 

*Instituto San Roberto—Monterrey, Mexico*

 

We acquired Institution San Roberto as part of the Meritas acquisition in June 2015 with an initial capacity of 2,931 places. Founded in 1982, the school is located in the Monterrey metropolitan area with two campuses. Both campuses offer indoor and outdoor facilities including a library, auditorium, science and technology labs, art and music rooms, outdoor basketball courts, turf soccer fields, racetrack, gymnasium with basketball courts and semi-Olympic pool.

 

As of September 27, 2015, 15% of the students at this school were expatriates.

 

**Marketing Our Schools**

 

***Our Brand***

 

Our marketing strategy is designed to develop brand awareness among prospective parents and students and brand loyalty and advocacy amongst existing parents and students.  We seek to build brand awareness in each of our existing and new markets with respect to our individual schools and the “Nord Anglia Education” name.  We believe that this brand building approach also contributes to the recruitment and retention of quality teachers and principals.

 

In April 2015, we launched our new philosophy, which can be summed up by the phrase “Be Ambitious.” We are ambitious for our students, our people and our family of schools. All the schools in our family are aligned to this philosophy and therefore promote the same brand values. This clear message allows everyone to understand what Nord Anglia Education stands for and enables us to develop Nord Anglia Education as a leading global brand. Our brand identity was also refreshed at this time to reflect our brand positioning with an identity that better resonates with parents.

 

36

----

Table of Contents

 

We believe that a school’s attractiveness to parents and students is based largely upon its reputation.  Accordingly, our marketing strategy is focused on the communication and enhancement of the excellent reputation that our schools enjoy within their respective markets.  Our marketing strategy is executed at each school by our principals and the admissions and marketing teams.  Our marketing strategy focuses on our online presence, reputation and referrals from existing parents as opposed to costly media campaigns.  Accordingly, we achieve our enrollment results in a highly cost-effective manner.

 

We have developed a systematic approach to student recruitment and retention and we ensure that enquiry generation and conversion into new student enrollments are prioritized and well managed.

 

***Student Recruitment***

 

The student recruitment process has three stages:

 

·                  *Enquiries: * parents considering enrolling their child at one of our schools register their child’s details and request further information.

 

·                  *Visits*:  parents personally visit the school campus often accompanied by their children.

 

·                  *Enrollments*:  parents register their child with the school, specify a start date and pay a non-refundable application fee.  Almost all applicants enroll either within the academic year in which they applied or in the subsequent academic year.

 

***Generation of Enquiries***

 

The majority of our enquiries are generated through the following methods.

 

*Digital Marketing*

 

In our experience, when considering overseas assignments, parents’ first step is often to thoroughly research schools online.  We recognize that online marketing is a critical means of communication with prospective parents and students and a key part of our strategy is to prioritize online tools.  We ensure that our websites are optimized to deliver important information to prospective parents in a concise and user friendly manner.  This enables them to make informed decisions when evaluating our schools.

 

*Corporate and School Websites*

 

Our corporate website is designed to introduce parents to our commitment and approach to outstanding education, network of schools and history.  Our corporate website contains direct web links to each individual school and provides details of the innovative educational work undertaken by our educational team. Each of our schools has an individual school website that is designed to inform prospective parents about that school’s curriculum, facilities, admissions process and why parents should choose the school for their children.

 

*Search Engine Optimization / Search Engine Marketing / Web Advertising*

 

We have tailored each school’s website to maximize effectiveness and ease of use.  Our ongoing search engine optimization and search engine marketing techniques generate a substantial number of visits to our website.  We also identify and advertise on popular websites used by our target families.

 

*Parent Referrals*

 

Parent referrals are important for generating enquiries.  We believe that prospective parents seek out parents of current and former students for their opinions on our schools, helping to convert enquiries to visits and applications.  We encourage the parents of current and former students to speak positively about our schools and achieve this by providing high quality education, communicating with and involving parents in our schools and seeking to place each of our schools at the center of its community.

 

In our most recent parental surveys, 92% of our parents said that they would be happy to recommend our school.

 

37

----

Table of Contents

 

***Relocation Agents***

 

Relocation agents who settle expatriate families are an important source of enquiries.  We develop close relationships with these relocation agents through a variety of initiatives, such as hosting school visits, providing quality information on our schools and producing user-friendly materials they can share with their clients.

 

In addition, we invite relocation agents to participate in the community events that the schools run.  These events are a useful networking opportunity for relocation agents and also provide us with an excellent opportunity to showcase our schools.

 

***Employers***

 

In each of our markets, we have established relationships with major employers, such as multinational corporations and embassies.  From our research, we know that parents consult their employers for school recommendations and information.  In addition, we ensure these key personnel participate in the community events the school runs, providing us with an excellent opportunity to showcase our schools.

 

***Converting Enquiries***

 

Parents will typically draw up a shortlist of schools for their child and then physically visit these school campuses.  Parents generally visit two or three different schools and usually undertake these visits with an open mind as to which school they will eventually select. Management of the school visit is therefore important and we have designed our systems carefully to help maximize the conversion ratio between visit and application.

 

A parent’s perception of a school’s academic quality is frequently a key factor in school selection.  Based on research conducted by an independent education consultancy, we found that the main criteria parents use to assess academic quality are teacher quality and students’ work observed during a visit.  We therefore manage the visit to provide adequate time for parents to interact with the actual teachers who will educate their child and also ensure we showcase the excellent work produced by current pupils.

 

Each of our schools has a dedicated admissions and marketing team who work closely with our principals during the student recruitment process in order to maximize the conversion of enquiries and visits to enrollments.  Our marketing and admissions teams typically have prior education industry experience and are chosen through a highly selective hiring process.  In order to ensure that we achieve high conversion rates, we use a highly personalized approach to engaging prospective parents that is designed to respond to their child’s particular needs and interests.

 

***Retention***

 

We are focused on retaining our students.  Once a student has enrolled at one of our schools, the school’s teaching staff and principal are responsible for ensuring that the student receives a premium education and remains enrolled.

 

To this end, we track the number of students who leave for reasons other than those outside of our control such as graduation or family relocation.  Over the last two years we have lost an average of only 2% of our total number of students per year for reasons related to academic quality, student needs or tuition levels, based on parent responses to our exit surveys.  We monitor the number of students leaving on a weekly basis and take immediate corrective action on any weaknesses identified for each school.

 

***Visibility***

 

In addition to high levels of visibility in relation to the financial performance for the current fiscal year, we are able to forecast enrollments for the following fiscal year with a certain degree of confidence.  Our students stay in our schools for an average of 3.6 years.  By analyzing inquiries and visits, we can gauge likely enrollment trends for each school.  This visibility is an important tool in our budgetary process, most notably for the recruitment of additional teachers and planning capacity.

 

38

----

Table of Contents

 

**Our Teaching, Administrative, Regional and Central Support Staff**

 

As of August 31, 2015, we had 7,131 full-time equivalent employees.  Our schools had 6,988 full-time equivalent employees, of whom 4,967 were teaching staff, 1,953 were school administration and management and 68 were regional support.  Our learning services business had 49 full-time equivalent employees.  In addition, we had 94 Group Central Support staff.  The table below shows our full-time equivalent employees by category of activity as of August 31, 2013, 2014 and 2015:

 
| ** **                         | ** ** | **Full-time equivalent employees** | ** ** |
|------------------------------------|------------|----------------------------------------------|------------|
| ** **                         | ** ** | **2013**                                     | ** ** | **2014** | ** ** | **2015** | ** ** |
| Teachers and   Teacher Support     |       | 2,319                                        |       | 2,752 |   | 4,967 |   |
| School Support                     |       | 839                                          |       | 944 |   | 1,953 |   |
| Regional Support                   |       | 31                                           |       | 34 |   | 68 |   |
| Learning   Services                |       | 304                                          |       | 127 |   | 49 |   |
| Group Central Support   (Globally) |       | 55                                           |       | 78 |   | 94 |   |
| **Total**                          |       | **3,548**                                    |       | **3,935** |   | **7,131** |   |

 

The table below shows our full-time equivalent employees by geographic location as of August 31, 2013, 2014 and 2015:

 
| ** **    | ** ** | **Full-time equivalent employees** | ** ** |
|---------------|------------|----------------------------------------------|------------|
| ** **    | ** ** | **2013**                                     | ** ** | **2014** | ** ** | **2015** | ** ** |
| China         |       | 1,033                                        |       | 1,173 |   | 1,258 |   |
| Europe        |       | 1,032                                        |       | 1,094 |   | 1,422 |   |
| ME/SEA        |       | 1,026                                        |       | 1,231 |   | 2,665 |   |
| North America |       | 457                                          |       | 437 |   | 1,786 |   |
| **Total**     |       | **3,548**                                    |       | **3,935** |   | **7,131** |   |

 

***Outstanding Teachers for Outstanding Schools and Growing Our Own***

 

In our drive to align our recruitment practices with our desire to be the leading global premium education company, we launched the “Outstanding Teachers for Outstanding Schools” project (“OTOS”) across our network in August 2012.  The scope of the OTOS project includes:  attracting premium candidates, maintaining an outstanding process and administration for recruitment, ensuring selection of quality candidates and enhancing levels of successful recruitment.

 

In 2014, we launched a “Growing Our Own” project as part of our focus on retaining and developing leaders from within our organization and have developed a Talent Framework to drive best practice in all areas of recruitment, performance management, development and succession planning.

 

In addition to the above projects, we have also launched an initiative to attract more female leaders to the organization and held our first female leaders in education conference in September 2014: “Your Place at the Table: Growing Female Leaders in Global Education.”

 

Our OTOS recruitment campaign focuses on an “all-School” recruitment event in London where our 31 schools gathered to attract the very best teaching Talent in the UK. By the end of January 2015, this campaign attracted 9,688 applications for 284 job advertisements for our schools. This type of event, where candidates are booked for specific interviews, not following a recruitment fair philosophy, is the only one of its kind on this scale. Our annual recruitment campaign extends past the recruitment event in January to take into account growth and the need to attract internationally-based teachers.

 

***Staff Development***

 

We are committed to supporting our teachers to be the best that they can be.  Through Nord Anglia University, we provide on-going professional development for our principals, senior and middle leaders and classroom teachers, in the form of online, in-school and face-to-face training and support.

 

39

----

Table of Contents

 

This program is vital to ensure that we attract and retain the best possible academic faculty.  Nord Anglia University offers the following:

 

·                  *Talent Framework*:  In January 2014, we agreed an organization-wide Talent Framework, which was rolled out throughout our 2014/15 academic year.  This includes a structured process of talent review boards at both a regional and group levels. As part of the Talent Framework, we have developed a set of core leadership capabilities called “The Core 7,” against which all employees can compare themselves and identify gaps that can help guide their development. All our existing leadership programs have these leadership capabilities embedded into their learning outcomes from January 2015 and allow us to become even more aligned as a group with the strategy and growth of the organization. The Talent Framework was rolled out in March and April 2015 with the Regional and Group Talent Review Boards taking place during April and May 2015. The results of these review boards provide valuable developmental data that can be fed into our group-wide leadership programs and also provide a robust and layered succession plan to enable us to continue to “Grow Our Own” as we grow as an organization.

 

·                  *Executive Leadership Program*:  An online and face-to-face comprehensive executive leadership program for all school principals, which develops academic and commercial capabilities.  The program includes individual mentoring and is independently accredited by the Windsor Leadership Trust, a leading organization dedicated to providing opportunities for leaders to develop their own leadership wisdom and insight.

 

·                  *Senior Leadership Program*:  An online and face-to-face experience, including two residential and an in-school action research project, to develop all of our heads of primary and secondary and our vice-principals.  This program has specifically been developed to enable career progression and development to more senior posts (for example principal roles or senior roles in larger schools) as well as providing a firm foundation for all of our senior leaders to be successful in their current roles.

 

·                  *Middle Leadership Program*:  An online and face-to-face program to develop current high-performing middle leaders, such as academic department heads, for future senior leadership posts either in their existing school or in other schools in the group.  Like the senior and executive leadership programs, this 6-month experience offers residential, online study, coaching and the opportunity to complete an in-school action based research project.

 

·                  *International Staffroom*:  A proprietary online portal for the development of all teaching staff.  Both external experts and our own staff with relevant expertise are used to enhance high-quality teaching and to share best practice teaching methods throughout the organization.

 

As professionals, teachers are particularly focused on continuous professional development which we are able to provide through initiatives such as Nord Anglia University.  The opportunity to receive ongoing professional development and keep up to date with professional practice is not always available in international schools and is a key differentiator in our ability to attract talent.

 

**Competition**

 

The local market for premium schools in each of the cities where we operate is highly fragmented and competitive. All of our schools face competition from other private premium schools, including schools that use the English National Curriculum and the International Baccalaureate Curriculum and schools that use curricula based on other educational traditions. We also compete with other school operators for acquisition opportunities. There are significant barriers to entry in the premium schools market, which include:

 

·                  the lead time required to build brand recognition and reputation, both locally and globally;

 

·                  the challenges faced by unproven operators in securing government licenses and regulatory approval in some jurisdictions;

 

·                  in many markets, the scarcity of real estate in the most desirable areas to establish a sizeable campus with the comprehensive and high-quality facilities expected of premium schools;

 

·                  property developers and landlords facing substantial capital expenditure commitments when building premium school facilities and thus increasingly requiring tenants in good financial standing and with strong track records in operating schools; and

 

·                  the tendency of students to stay enrolled in the same school until they graduate, or, in the case of expatriates, until their parents complete their overseas assignments.

 

Although we benefit from these barriers to entry in the markets in which we operate, some of these barriers may make it difficult for us to enter new markets. In addition, competitors that are able to devote greater resources than we can to overcoming barriers to entry may have an advantage over us.

 

40

----

Table of Contents

 

We believe that premium schools compete based on:

 

·                  their reputation and brand recognition;

 

·                  the quality of education they provide;

 

·                  the curricula they use;

 

·                  their ability to recruit and retain students;

 

·                  their ability to recruit and retain principals and teaching staff;

 

·                  their ability to identify and secure locations;

 

·                  the overall quality of the educational experience they provide and their relationships with parents; and

 

·                  the strength of their relationships with educational authorities and other key stakeholders, such as real estate developers.

 

**Information Technology Systems and Management**

 

Nord Anglia has invested in a comprehensive and reliable information technology infrastructure that supports the company’s data-driven approach to managing our portfolio of schools.  This platform enables our executive team, regional managers, school principals and teachers to engage in timely decision-making on key performance indicators. Our information technology platform is both scalable and customizable to support the future growth of our schools.

 

We are currently deploying a global infrastructure to allow the entire organization to collaborate and share information seamlessly and effectively. This new infrastructure includes a common e-mail platform, instant messaging, conference services as well as an intranet and file storage system using a hybrid model of cloud and in-house services and resources.

 

Furthermore, the deployment of a new Management Information System (MIS) for all our schools will provide a uniform system across the group for enquiry and admissions tracking, monitoring student academic progress, as well as invoice billing and management.  This new MIS solution will feed into a data warehouse for information extraction and reporting to analyze key business metrics and facilitate overall strategic decision-making.  The implementation of this system will enhance each individual student’s academic progress through tracking performance at a student and subject level.  The key benefits of this platform will include the ability to:

 

·                  maximize individual student performance;

 

·                  implement accountability at a student, teacher, year group, subject and overall school level;

 

·                  encourage parental involvement and ownership of students’ academic objectives; and

 

·                  maintain comprehensive benchmarking within and among schools.

 

In addition, we have implemented a suite of virtual learning applications based around Moodle 2.6, with Global Campus being a flagship product available to all of our schools.

 

Our infrastructure is managed and monitored by a team of technology professionals, who are both in-house and outsourced.

 

**Intellectual Property**

 

We have applied for or registered trademarks relating primarily to our logos and names, including “Nord Anglia,” “British Schools of America,” “British American School” and “Léman” in various jurisdictions. Apart from Singapore and Vietnam, in which we own the trademark “The British International School” and “British Vietnamese International School” (and school logo), respectively, we do not own the rights to the name “The British School,” “The British International School” or similar names in any jurisdiction in which we operate a school under these names, and any organization that meets certain accreditation requirements can use these names.

 

41

----

Table of Contents

 

**Regulation**

 

Our schools are subject to regulation by national and local authorities under applicable law. Most of our premium schools are subject to regular inspections by national or local education authorities.

 

*China*

 

China regulates the education services industry at central and provincial levels. The highest executive organ of the central government of China is the State Council, and we are regulated by several ministries and agencies under its authority, including the Ministry of Education (“MOE”) and the Ministry of Civil Affairs (“MCA”), and their respective local counterparts.

 

*The Education Law*

 

In 1995, the National People’s Congress enacted the Education Law, which established the fundamental principles relating to the educational system of China at all levels, from preschool through higher education, a system of nine year compulsory education and a system of education certificates. Under this legislation, the government formulates plans for the development of education and establishes and operates schools and other educational institutions.

 

*Regulation of International Schools in China*

 

International schools in China (like The British International School Shanghai, The British School of Beijing and the British School of Guangzhou) are regulated under the Interim Regulations Concerning the Establishment of Schools for the Children of Expatriates issued by the MOE on April 5, 1995 (“Interim Regulations”).

 

Under the Interim Regulations, the establishment of international schools requires approval from the MOE with prior verification by the MOE’s local counterpart at the provincial or municipal level. Our international schools in Beijing, Shanghai, Guangzhou and Chengdu have obtained such approval from the MOE. The approval authority has been delegated to MOE’s local counterpart at the provincial level pursuant to the Decision of the State Council on the Sixth Batch of Cancelled and Amended Administrative Examination and Approval Items issued by the State Council of the PRC on September 23, 2012.

 

From the date of MOE approval, our international schools attained legal person status and could assume civil liabilities. International schools are permitted to admit only the children of parents holding a foreign passport and having a legal residence in China.

 

The Interim Regulations impose various criteria and restrictions on the establishment and operation of international schools. For example:

 

·                  only foreign individuals with legal residence in China or the following entities can apply to establish an international school: foreign institutions registered in China, wholly foreign owned enterprises duly established in China or international organizations’ institutions in China; and

 

·                  the establishment and operation of an international school is subject to approval by the MOE.

 

The Tentative Administrative Measures on the Registration of Civil Non-enterprise Entities issued by the State Council on October 25, 1998 require all civil non-enterprise entities to register with the local civil affairs authorities. It is commonly understood that international schools are civil non-enterprise entities as defined under these measures and, under these regulations, our schools in Shanghai, Beijing, Guangzhou and Chengdu could be required to register with the Shanghai Civil Affairs Bureau, the Beijing Civil Affairs Bureau, the Guangzhou Civil Affairs Bureau and the Sichuan Provincial Department of Civil Affairs, respectively. See “Item 3. Key Information —D. Risk Factors—Risks Related to the Jurisdictions in which We Operate—Our schools in Guangzhou, Shanghai and Chengdu have not registered with the local Civil Affairs Bureau, which could subject the schools to enforcement actions resulting in sanctions, including a suspension of our operations.”

 

*Regulation of Transfers of Foreign Exchange*

 

The transfer of foreign currency from within China to persons offshore is regulated by the State Administration of Foreign Exchange (“SAFE”) under the Regulations on the Administration of Foreign Exchange of the People’s Republic of China. Under these regulations, these transfers require the approval of the competent office of SAFE. In the event of a transfer offshore of foreign exchange made in violation of these regulations, the competent office of SAFE may request that such foreign exchange be returned onshore within a time period specified by it and may also impose a fine. If imposed, the fine would be an amount less than 30% of the amount of foreign exchange improperly transferred. If the non-compliance is serious (the rules do not set forth criteria for determining which violations are serious), then a fine of up to 100% of the amount of foreign exchange improperly transferred may be imposed.

 

42

----

Table of Contents

 

In addition, the Administrative Measures on the Settlement, Sale and Payment of Foreign Exchange, which were issued in June 1996, require that revenues of onshore entities received offshore in foreign exchange must be remitted onshore timely. In the event that such foreign exchange revenues are not remitted onshore timely, the competent office of SAFE may request that such foreign exchange revenues be remitted onshore within a time period specified by it and may also impose a fine and/or confiscate illegal gains.

 

*Hong Kong*

 

Under the laws of Hong Kong, every school must be registered or provisionally registered with the Hong Kong Education Bureau.  Our school in Hong Kong, Nord Anglia International School, Hong Kong completed its provisional registration with the Hong Kong Education Bureau as a new private school offering primary and secondary education.  Nord Anglia International School, Hong Kong commenced its first school year in September 2014 following completion of refurbishment of the school site awarded by the Hong Kong Education Bureau.

 

Nord Anglia International School, Hong Kong was founded by Nord Anglia School (Hong Kong) Limited as its sponsoring body.  The school is managed by Nord Anglia International School, Hong Kong Limited as its management committee.  Both entities are recognized charitable institutions in Hong Kong in the legal form of companies limited by guarantee.  Any surplus from the operation of Nord Anglia International School, Hong Kong must be applied by the charitable institutions exclusively for the purposes of the school and for the advancement of education and is not available for distribution.

 

*Europe*

 

In contrast to China, regulation of private schools such as ours in countries in which we operate in Europe is quite limited, except as described in the country sections below. There is a relatively simple registration regime for private schools, which is not focused on operations or curriculum, and there are few, if any, restrictions on fees. In addition, all of these countries are part of the European Union, which greatly facilitates the applicable administrative formalities.

 

*Poland*

 

Under Polish law, all private primary schools (“szkoła podstawowa”) and junior high schools (“gimnazjum”), including Grades 1 through 9, must have equal status with Polish public schools. To this end, private primary schools and junior high schools must comply with terms and conditions established by Polish law, unless the Minister of Education gives a special authorization permitting exceptions from such terms and conditions. Private schools are registered by the local authorities. In the case of our primary school, junior high school and high school in Poland, the competent local authority is the President of the capital city of Warsaw. Our primary school, junior high school and high school are duly registered with the registry of non-public schools and institutions maintained by the President of the capital city of Warsaw. The Minister of Education has given our junior high school and high school special authorizations allowing them to employ foreign teachers and teach the English National Curriculum.

 

We operate our school in Poland as a limited liability company.

 

*The Czech Republic*

 

Our school in Prague, the English International School Prague, operates as a corporation under various licenses, including those covering specialized retail operations and English language teaching. All licenses are in full force and effect and are issued for an indefinite period.

 

The English International School Prague operates as a foreign school established by a foreign legal entity and is not registered in the Czech registry of schools. This precludes the school from obtaining government subsidies. In 2000, the Czech Ministry of Education ruled that Czech students at the school may fulfill their mandatory school attendance requirements at the English International School Prague. In order for the Czech authorities to recognize the educational qualifications earned by students at the school, the students need to arrange with a Czech school to take Czech examinations for certain subjects. Studying at the English International School Prague is recognized by the Czech Ministry of Education as being equivalent to studying at a Czech secondary school for the purpose of the Czech pension insurance and state social security systems relating to compulsory education, so long as the grade levels overlap with Czech secondary school levels.

 

43

----

Table of Contents

 

The English International School Prague has the appropriate licenses to conduct its activities as well as a general uncertified license that covers the provision of various services, including extracurricular education and training, courses, seminars and lectures. These licenses are sufficient to operate an educational institution which is not a Czech school.

 

We operate our school in the Czech Republic as a company and extract profits accordingly.

 

*Hungary*

 

Under Hungarian law, a nondomestic educational entity may operate in Hungary if it is validly accredited under the law of its home country. Our school in Budapest, the British International School Budapest is accredited with Edexcel International and the Examinations Board. In addition, British International School Budapest is registered with the Hungarian Minister of National Resources and has a valid license to carry on educational activities in Hungary.

 

British International School Budapest is a separate legal entity established under Hungarian Act No. LXXIX of 1993 on Public Education, and was founded and is operated by the British International School Foundation. The British International School Budapest holds an operating permit granted by the Ministry of Education (now Ministry of National Resources). The British International School Foundation operates in the legal form of a foundation registered in Hungary. The activities of the British International School Foundation are not profit-oriented, but it may pursue business activity secondarily, solely in the interest of and without jeopardizing its objectives and to provide the necessary funds in compliance with the applicable legal provisions. The British International School Foundation may not distribute profits acquired through its business activities but shall use such profits exclusively for purposes of its main education objectives and activities.

 

*Slovakia*

 

Under the laws of Slovakia, a private school can be established only if it forms part of a school system and the Ministry of Education has determined that it has been integrated into that school system. These requirements have been met by our school in Bratislava. British International School Bratislava operates as a legal entity on a not for profit basis and the founder has no right to dividends or similar distributions from the school. Under Slovak law, any use of profits from school fees is limited to operational expenses, financing of salaries, including insurance payments for mandatory public health insurance, social insurance, contributions for pension savings, modernization of educational facilities, the development of the school, solving of emergency situations and the improvement of the quality of the services provided by it.

 

The British International School Bratislava has received approval by the Ministry of Education for the integration into the network of schools and educational facilities in Slovakia Republic for the private primary school, nursery and private high school. The British International School Bratislava is duly registered with the statistical office.

 

*Spain*

 

Education is acknowledged to be a fundamental right in the 1978 Spanish Constitution (*Constitución Española*), the main terms of which are set forth in two organic laws: (i) Organic Law on the right to education (*Ley Órganica 8/1985, de 3 de julio, reguladora del derecho a la educación*), which develops the basic rights and principles set forth in the Spanish Constitution regarding education, such as the right to receive an education, parents’ right to choose their children’s educational center, parents’ freedom of association, etc.; and (ii) Organic Law on Education (Ley Órganica 2/2006, de 3 de mayo, de Educación), which, on the basis of the principles of offering universal quality education cooperation at all levels and achieving the European Union’s goals in the education sector, sets forth the main organization and planning of school-level education, teachers, educational centers, inspection and the allocation of public sector resources.

 

Spanish privately-owned foreign schools, as is International College Spain, S.A.U., are regulated under the Royal Decree 806/1993 (*Real Decreto 806/1993, de 28 de mayo, por el que se regula el régimen de los centros docentes extranjeros en España* , hereinafter, the “Royal Decree”).

 

In order to carry out their business in Spain, the aforementioned schools must obtain an opening and functioning authorization from the Spanish education authorities. Once obtained, they must register within the Public Registry of Schools and are subject to inspection by the Spanish education authorities.

 

In order to obtain the foregoing authorization, foreign privately-owned schools must satisfy, along with certain basic Spanish requirements (such as adequate hygiene and safety conditions at the school premises), the legal requirements set forth by their domestic education authorities in order for the education received to be officially valid in their country, which shall be proved to the Spanish education authorities generally by means of a certificate issued by their relevant domestic authorities or their diplomatic representation in Spain (such as the Embassy or Consulate).

 

44

----

Table of Contents

 

In addition, in order to be able to teach Spanish students, pursuant to the Royal Decree, the teaching of the foreign educational curriculum must be completed with certain Spanish-specific contents.

 

*Switzerland*

 

Under Swiss law, operating and teaching in a private boarding school is subject to authorization in accordance with applicable provisions of both Swiss federal and cantonal law regarding, in particular, the protection of minors and private education. Our schools in the canton of Vaud operate under the supervision of the cantonal authority, the Department of Education and Youth. The authorization for the director to operate a private boarding school and the authorizations for the teachers to teach in the school are individual. The direction of the private school must confirm to the competent authority that all teachers meet the requirements. The Vaud Department of Education and Youth can verify, if necessary by examinations, that the education provided in a private school is at least equivalent to the education received in public schools.

 

We operate our schools in Switzerland as a company and extract profits accordingly.

 

*ME/SEA*

 

*Abu Dhabi, United Arab Emirates*

 

The Abu Dhabi Education Council (“ADEC”) regulates education institutions based in the Emirate of Abu Dhabi and has developed minimum standards for non-government schools.

 

A proprietor intending to establish a new non-government school in Abu Dhabi must make an application to ADEC, in order to obtain a provisional license. Under the laws of the Emirate of Abu Dhabi, all private schools are required to register with the ADEC and to allow inspections of their sites. BISAD registered accordingly and obtained such a license, allowing the school to open on September 6, 2009.

 

BISAD must continue to demonstrate on-going compliance with ADEC’s By-Laws for Non-Government Schools in order to qualify for annual license renewal. In order to assess whether a school meets the criteria, a team from ADEC inspects the school approximately every two years and compiles a report based on the school’s performance against nine inspection standards. ADEC also requires each licensed, non-government school to prepare an annual report to publicly disclose the school’s educational, financial performance and other policies of the school, as identified by the Director-General of ADEC.

 

The ability for BISAD to increase tuition fees is restricted by law. The Ministerial Resolution No. (4592) of 2001 on the Executive Regulation of the Federal Law (28) of 1999, Concerning Special & Further Education as amended by Ministerial Resolution No. 203/1 of 2008 on the Controls of Private School Fees Increase (the “Resolution”) governs the ability of private schools to increase their tuition fees. Broadly, the Resolution limits the rate of increase to: (i) between 5% and 10% in the event that one year has lapsed since the last approved increase; (ii) between 10% and 20% in the event that two years have lapsed since the last approved increase; and (iii) between 20% and 30% in the event that three years have lapsed since the last approved increase. Authority to approve increases within these limits has been delegated from the Ministry of Education to ADEC. Any proposed increase must be justified on grounds such as the improvement of student services, development of school buildings or the incorporation of new technology into teaching methods.

 

We entered into a definitive agreement to acquire the 49% equity interest in BISAD owned by our parent in September 2012 and completed the acquisition in February 2014. In accordance with the provisions of the UAE Federal Commercial Companies Law No. 8 of 1984 (the “Law”), the shares of a UAE partner in a limited liability company (“LLC”) should not be less than 51% at all times. Although the Law provides that the capital of an LLC should be divided into equal shares and further confirms that the profits and losses shall be equally divided amongst the shares, it qualifies this general provision by stating “unless otherwise stipulated in the memorandum of association.” It has been a widely accepted practice to provide in the memorandum of the LLC that the profits and losses of an LLC will be shared in a ratio different to that of the shareholder’s stake.

 

*Cambodia*

 

Under the laws of Cambodia, the national educational system is divided into three classes: primary (grade 1 to grade 6), secondary (including lower secondary from grade 7 to grade 9 and upper secondary from grade 10 to grade 12) and higher education (university and institute). Schools may be either public or private school, and may offer either general education or technical and vocational education. Cambodia does not have special laws governing the operations of international schools.

 

45

----

Table of Contents

 

Regulations governing the classification and management of schools and the frameworks, guidelines and mechanisms for monitoring education including control and evaluation systems, fall within the responsibility of the Ministry of Education, Youth and Sport (“MoEYS”).

 

Establishment and operating a school in Cambodia requires a specific, per-category, school license, which a natural person or public or private legal entity may apply for at the MoEYS. School licenses are valid for 5 years and are thereafter renewable.  Licenses are granted according to the level of education that a school provides. In order to obtain a school license, the school has to enter into a contract with the MoEYS under which the school, among other things, is obligated to periodically and regularly submit reports on the administrative and technical affairs of the school to the relevant authorities of the MoEYS. Failing to do so may cause the MoEYS to revoke the school license.

 

According to the Education Law, adopted in 2007, the basic curriculum for general education determined by the MoEYS is compulsory at all schools in Cambodia. A school may, however, implement a specific curriculum, which is different from the MoEYS’s adopted curriculum or in a foreign language, with the prior approval of the MoEYS. The MoEYS’s review and approval of a curriculum generally is made simultaneously with the grant of a school license during the application process.

 

At all times, a school has to keep the MoEYS and its relevant authorities informed of any changes made to the operation of the school.

 

Our school in Cambodia, through the Prakas No. 1506 on “Establishment of Private General Education School ‘Northbridge International School (Cambodia) Limited’,” issued on July 1, 2014 by the MoEYS, has met the foregoing requirements and has been granted a school license to operate a private school offering primary to secondary general education under its international curriculum.

 

The Law on Foreign Exchange Control permits purchases and sales of currency on foreign exchange markets, money transfers, all kinds of international settlements, and capital flows in foreign or domestic currency, between Cambodia and other countries or between residents and nonresidents. However, the above-mentioned transactions may be carried out only through authorized intermediaries, meaning all licensed financial institutions in Cambodia. Any person who violates this obligation shall be liable for a fine of 50% of the amount involved.

 

In case of a foreign exchange crisis, the National Bank of Cambodia (“NBC”) may impose temporary restrictions on foreign exchange operations of the authorized intermediaries for a maximum period of 3 months. In case the crisis still persists, the NBC and the Ministry of Economy and Finance must seek the approval from the Prime Minister to extend the restrictions.

 

Investments made abroad by a resident for an amount equaling or exceeding USD 10,000 are subject to prior declaration to the NBC. Any person who violates this obligation shall be liable for a fine of 20% of the amount involved. Loans and other borrowings, including trade credits, may be freely contracted between residents and nonresidents, provided that disbursements and repayments are made through authorized intermediaries.

 

*Dubai, United Arab Emirates*

 

The Knowledge and Human Development Authority in Dubai (“KHDA”) is tasked with planning, providing for and developing the requirements for knowledge and human development, including the licensing and regulation of educational institutions in Dubai.  The Dubai Schools Inspection Bureau (“DSIB”) is responsible for the monitoring of educational institutions in Dubai and the School Agency at the KHDA (“School Agency”) is responsible for the development of the school sector specifically. The relationship between KHDA and each of the DSIB and the School Agency, broadly and as it pertains the regulation of schools like Nord Anglia International School Dubai, is governed by working agreements that align the strategic objectives of the KHDA with each entity, create a framework for cooperation and outline the powers and duties of each party.

 

As a school licensed by the KHDA, Nord Anglia International School Dubai is required to comply with the KHDA issued order No. (1) of 2007 Concerning the Special Conditions for licensing Schools, Free Zone Schools and Foreign Community Educational Institutions in the Emirate of Dubai (the “Order”), such compliance being imposed, monitored and assessed on an ongoing basis by the KHDA, the DSIB and the School Agency.

 

The Order requires Nord Anglia International School Dubai to provide all necessary information regarding its students and faculty, as requested by the KHDA from time to time, as well as providing all of the school’s financial information annually to the KHDA, with the KHDA reserving its right to audit the financial records of the school with prior notice, as required. Furthermore, for the purpose of public awareness and transparency, the KHDA has the right to share the school’s information (excluding financial details) on the KHDA’s internet portal.

 

46

----

Table of Contents

 

As a school that follows an international curriculum, Nord Anglia International School Dubai is required by the Order to commit to seeking membership of internationally recognized accreditation agencies approved by the KHDA.  This requirement must be completed during the third year of operation and the school is working with KHDA to agree an accrediting agency.

 

The ability for Nord Anglia International School Dubai to increase tuition fees is restricted, as the KHDA reserves the right to disallow any educational or non-educational fee increase pursuant to the Order. Any increase of fees by the school shall be subject to the submission of a formal application by the school and the approval of such application by the KHDA.

 

Nord Anglia International School Dubai is required to allocate a minimum percentage of its revenue as determined by the KHDA toward staff training, such obligation being incorporated into the school’s financial plan each year. It is also required to confirm with the KHDA the maximum number of students permitted to be attending the school.

 

*Qatar*

 

The regulation and supervision of schools in Qatar is the ultimate responsibility of the Ministry of Education and the Supreme Education Council (the “SECQ”). The legal and regulatory regime distinguishes between two classes of schools—namely government schools which are directly controlled and supervised by the SECQ and which offer free-of-charge schooling to all children in Qatar who hold Qatari nationality and are governed by the Independent Schools Law, Qatari Law No. 11 of 2006, and the private sector, which includes our operations in Qatar. Private schools in Qatar are governed by Qatari Law No. 7 of 1980, as well as regulations issued by the SECQ. These regulations govern matters such as licensing and inspection. The ability of our schools in Qatar to increase tuition fees is subject to the approval of the SECQ. Each of our schools is required to submit to the SECQ a schedule containing all fees it wishes to charge students enrolling at the schools, and such fees schedule must be approved by the SECQ prior to being adopted by the schools. Any changes to the fees schedule must be approved by the SECQ.

 

*Singapore*

 

Private education institutions in Singapore are regulated by the Private Education Act (Chapter 247A of Singapore), which sets out the mandatory registration requirements and legislation obligations for these institutions.  The Act is administered by the Council for Private Education, a statutory board sanctioned with the legislative power to regulate the private education sector in Singapore.

 

The Act requires a private education institution to be registered with the Council for Private Education before it is allowed to commence operations.  A private education institution is managed by managers, who have statutory duties and responsibilities (including keeping proper records and furnishing information requested by the Council for Private Education).  In the case of a private education institution which is a company, the managers are the directors or members of its board or committee of management which is responsible for the management of the affairs of the company.

 

A private education institution must ensure that its teachers have the relevant qualifications and experience that meet the requirements stipulated by the Act.  A private education institution also has to seek and receive permission from the Council for Private Education before it offers any course, unless exempted.  A private education institution is required to set up an academic board and an examinations board with at least three members each; these boards are required to set up proper academic and examination processes and frameworks respectively.

 

Dover Court International School (Pte.) Ltd. is a private limited company incorporated in Singapore, and it is registered as a private education institution with the Council for Private Education.

 

*Vietnam*

 

*Regulations on foreign-invested schools*

 

Foreign investment in education services in Vietnam is governed mainly by the Law on Education 2005 (as amended in 2009 and 2014) and its implementing regulations (in particular Decree No. 73/2012/ND-CP of Vietnam’s Government dated 26 September 2012 (“Decree 73”) and Circular 34/2014/TT-BGDDT of Vietnam’s Ministry of Eduation and Training dated 15 October 2014.

 

A foreign-invested educational institution may invest in most forms of education under the laws of Vietnam, including kindergartens for foreign children using foreign curricula and general education institutions (i.e., primary schools, secondary schools, high schools and mixed general education institutions) for foreign students and Vietnamese students using foreign curricula. Our schools in Vietnam are kindergartens and general educational institutions that satisfy these standards.

 

47

----

Table of Contents

 

Under Decree 73, a foreign-invested educational institution must obtain (i) an investment certificate from a People’s Committee at provincial level, (ii) a decision approving the establishment of the institution issued by a People’s Committee at the provincial or district level depending on the level of the educational institution and (iii) a license to conduct educational activities issued by a department/division of education and training at the provincial or district level where applicable.  Our schools in Vietnam have satisfied these conditions.

 

A foreign-invested education entity in Vietnam is generally required to satisfy various operational conditions, including with respect to: (i) nationality of children/students to be enrolled by the shool, (ii) investment capital, (iii) facilities, equipment and infrastructure, (iv) teaching staff and student quota per class and (v) education program, qualifications and certificates. In particular, foreign-invested educational institutions must register their diplomas with Vietnam’s Ministry of Education and Training.  Our schools in Vietnam have satisfied these conditions.

 

*Foreign exchange control and remittance of profits abroad*

 

The transfer of funds from Vietnam overseas is subject to the regulations under Vietnam’s Ordinance on Foreign Exchange Control and guidelines of the State Bank of Vietnam.

 

Profits generating from our schools in Vietnam may only be remitted overseas on an annual basis, provided that:

 

·                  all tax obligations in Vietnam have been fulfilled; and

 

·                  the audited financial statements and the relevant annual finalization corporate income tax return have been submitted to the tax authorities.

 

Furthermore, remittance is not permitted in case of accumulated losses (of previous years) which have not been fully off-set.

 

Remittance of profit generated from direct investments may be conducted freely without any further approval from the State Bank of Vietnam provided that the remitting entity submits the required supporting documents justifying the underlying transaction such as a certified copy of the investment registration certificate of the company, internal corporate resolutions of the company on the distribution of dividends and remittance of profits and notification to the tax authorities of the dividends distributed and to be remitted.

 

*Thailand*

 

*Regulation of Private Schools in Thailand*

 

A private school business must be conducted in accordance with the rules and procedures specified in the Private Schools Act B.E. 2550 (2007) (subsequently amended by the Private Schools Act (No.2) B.E. 2554 (2011) (the “Private Schools Act”), which has replaced the Private Schools Act B.E. 2525 (1982). The Private Schools Act reforms the previous supervisory system to promote self-management. The Office of the Private Education Promotion Board, under the supervision of the Office of the Permanent Secretary for Education, is responsible for the supervision of our school in Thailand. The monitoring, evaluation and standards that a private school is expected to comply with in Thailand are the same as those for Thai public schools.

 

The Private Schools Act requires that a private school must hold a school permit in order to operate. One of the main conditions for obtaining a permit to operate a school through a private limited company under the Private Schools Act is that not less than half of the total number of shares and shareholders must be Thai persons.

 

Under the Private Schools Act, there are two separate entities which comprise the school: (i) the school entity and (ii) the permit holder (our Thai school company) that owns the school entity. As the school entity is a separate entity from the permit holder, it is managed by the school board under the school charter (which sets out the basis on which the school should be operated). Our Thai school company, as permit holder, is each school entity’s authorized representative and a member of the school board.

 

Currently, each of our schools in Thailand holds a school permit under the Private Schools Act, a school board has been appointed and a school charter is in place.

 

48

----

Table of Contents

 

*Regulation of Transfers of Foreign Exchange*

 

Thai foreign exchange controls are administered by the Bank of Thailand on behalf of the Ministry of Finance, pursuant to the Exchange Control Act B.E. 2485 (1942). The Bank of Thailand has granted commercial banks and certain other entities the authority to conduct foreign exchange transactions as authorized agents of the Bank of Thailand. The Bank of Thailand instituted measures in 1998 to restrict certain foreign exchange related transactions by domestic financial institutions with non-residents of Thailand and to safeguard against instability and speculation in the domestic currency market.

 

The outward remittance from Thailand of dividends after payment of the applicable Thai taxes, if any, may be made without the requirement to file a specified form to the relevant authorized agent if the amount is less than $50,000 (or the equivalent amount in the relevant currency) per remittance. If the amount is $50,000 or above (or its equivalent in the relevant currency), a specified form must be submitted to the authorized commercial bank together with documents or evidence as to the particular transaction. Dividends paid to a non-resident must be converted into foreign currency prior to the outward remittance from Thailand.

 

*North America*

 

*United States*

 

Schools in the United States are subject to national, state and local regulations and licensing requirements. We have policies and procedures in place to assist in complying with such regulations and requirements. These regulations and the administrative bodies in charge of these regulations vary from jurisdiction to jurisdiction and may apply differently within the same jurisdiction to elementary, middle school and high schools. In most jurisdictions, these agencies conduct scheduled and unscheduled inspections of the schools and licenses must be renewed periodically.

 

Most jurisdictions establish requirements for background checks or other clearance procedures for new employees of schools. Repeated failures of a school to comply with applicable regulations can subject the school to sanctions, which might include probation or, in more serious cases, suspension or revocation of the school’s license to operate and could also lead to investigations of our other schools located in the same jurisdiction. In addition, this type of action could lead to negative publicity extending beyond that jurisdiction and potentially affecting our other locations. We believe that our operations are in substantial compliance with all material regulations applicable to our business. However, there is no assurance that a licensing authority will not determine a particular school to be in violation of applicable regulations and take action against that school and possibly other schools in the same jurisdiction. In addition, there may be unforeseen changes in regulations and licensing requirements, such as changes in the required ratio of child center staff personnel to enrolled children that could have a material adverse effect on our operations. States in which we operate routinely review the adequacy of regulatory and licensing requirements and implement changes, which may significantly increase our costs to operate in those states.

 

49

----

Table of Contents

 

C.                                                                      Organizational Structure

 

The following diagram illustrates our corporate structure as of the date of this annual report.

 

 

The following table sets forth information about our significant subsidiaries as of the date of this annual report.

 
| **Name of Company**                           | ** ** | **Equity Interest** | ** ** | **Place of   Incorporation** | ** ** |
|---------------------------------------------------------|------------|--------------------------|------------|-----------------------------------|------------|
| B I S Ltd.                                              |       | 100                      | %          | British Virgin Islands            |       |
| British American   School of Charlotte, L.L.C.          |       | 100                      | %          | Delaware, USA                     |       |
| British   International School Bratislava s.r.o.        |       | 100                      | %          | Slovakia                          |       |
| British   International School Foundation               |       | 100                      | %          | Hungary                           |       |
| British   International School LLC(1)                   |       | 49                       | %          | Abu Dhabi, UAE                    |       |
| British School   of Beijing                             |       | 100                      | %          | China                             |       |
| British School   of Boston, L.L.C.                      |       | 100                      | %          | Delaware, USA                     |       |
| British School   of Chicago, L.L.C.                     |       | 100                      | %          | Delaware, USA                     |       |
| British School   of Guangzhou                           |       | 100                      | %          | China                             |       |
| British School   of Houston, L.P.                  |       | 100                      | %          | Texas, USA                        |       |
| British School   of Washington, L.L.C.                  |       | 100                      | %          | Delaware, USA                     |       |
| British Schools   of America, LLC                  |       | 100                      | %          | Delaware, USA                     |       |
| British Schools   of Texas, L.L.C.                      |       | 100                      | %          | Delaware, USA                     |       |
| Collège Alpin   Beau-Soleil SA                |       | 100                      | %          | Switzerland                       |       |
| Collège   Champittet SA                       |       | 100                      | %          | Switzerland                       |       |
| Collège du Léman   Sàrl                  |       | 100                      | %          | Switzerland                       |       |
| Dover Court   International School (Pte.) Ltd.          |       | 100                      | %          | Singapore                         |       |
| Education   Overseas Qatar L.L.C.(1)                    |       | 49                       | %          | Qatar                             |       |
| English   International School Prague, s.r.o.           |       | 100                      | %          | Czech Republic                    |       |
| Instituto de   Desarrollo Educacion y Aprendizaje, S.C. |       | 100                      | %          | Mexico                            |       |
| International   College Spain, S.A.U.              |       | 100                      | %          | Spain                             |       |
| La Côte   International School SA             |       | 100                      | %          | Switzerland                       |       |
| NA Schools   Limited                                    |       | 100                      | %          | UK                                |       |
| NAE HK Holdings   Limited                               |       | 100                      | %          | Hong Kong                         |       |
| NAE Hong Kong   Limited                                 |       | 100                      | %          | Hong Kong                         |       |
| Nord Anglia   Education (UK) Holdings plc          |       | 100                      | %          | UK                                |       |
| Nord Anglia   Education Finance LLC                     |       | 100                      | %          | Delaware, USA                     |       |

 

50

----

Table of Contents

 
| **Name of Company**                                           | ** ** | **Equity Interest** | ** ** | **Place of   Incorporation** | ** ** |
|-------------------------------------------------------------------------|------------|--------------------------|------------|-----------------------------------|------------|
| Nord Anglia   Education Limited                                         |       | 100                      | %          | UK                                |       |
| Nord Anglia   International School L.L.C(1)                             |       | 49                       | %          | Dubai, UAE                        |       |
| Nord Anglia   International School, Hong Kong Limited                   |       | 100                      | %          | Hong Kong                         |       |
| Nord Anglia   School (Hong Kong) Limited                                |       | 100                      | %          | Hong Kong                         |       |
| Nord   International Schools Limited                                    |       | 100                      | %          | UK                                |       |
| North Broward   Preparatory Schools, LLC                                |       | 100                      | %          | Florida, USA                      |       |
| Northbridge International   School (Cambodia) Limited                   |       | 100                      | %          | Cambodia                          |       |
| Regent Pattaya   Campus Management Co., Ltd.(2)               |       | 49                       | %          | Thailand                          |       |
| Saint Andrews   International School Sukhumvit Campus Co., Ltd.(2) |       | 49                       | %          | Thailand                          |       |
| The British   International School Company Limited                      |       | 90                       | %          | Vietnam                           |       |
| The British   International School, Shanghai                            |       | 100                      | %          | China                             |       |
| The British   School Sp. z o.o.                                         |       | 100                      | %          | Poland                            |       |
| The Léman   International School — Chengdu                    |       | 100                      | %          | China                             |       |
| Thien Huong   Education Joint Stock Company                             |       | 81                       | %          | Vietnam                           |       |
| Thien Huong   Investment Company Limited                                |       | 90                       | %          | Vietnam                           |       |
| Viking   Holdco, Inc.                                              |       | 100                      | %          | Delaware, USA                     |       |
| Viking Holding   Company, LLC                                           |       | 100                      | %          | Delaware, USA                     |       |
| Village Real   Estate LLC                                               |       | 100                      | %          | Texas, USA                        |       |
| WCL Academy of   New York LLC                                 |       | 100                      | %          | Delaware, USA                     |       |
| WCL Holdco   Limited                                                    |       | 100                      | %          | UK                                |       |

 

----

(1)                                 We exercise control of this company pursuant to its constitutional documents.

 

(2)                                 We are entitled to approximately 91% of the voting power pursuant to the company’s constitutional documents.

 

D.                                                                      Property, Plant and Equipment

 

**Properties**

 

Our headquarters are located at Level 12, St. George’s Building, 2 Ice House Street, Central in Hong Kong, where we lease 6,695 net square feet.  We continue to operate in two locations in the United Kingdom, one of which is for our learning services business. We lease most of our current school facilities under long-term leases.  The table below summarizes the main operating leases for each of our schools:

 

| **School**                                                                    | ** ** | **Termination Date***                  | ** ** | **Area +**                                            |
|-------------------------------------------------------------------------------|------------|---------------------------------------------|------------|------------------------------------------------------------|
| **China**                                                                     |       |                                        |       |                                                       |
| The British School of Beijing, Sanlitun (Sanlitun,   Beijing, China)          |       | 2017 /2023                                  |       | 8,032.37 m2                                                |
| The British School of Beijing, Shunyi (Shunyi,   Beijing, China)              |       | 2029                                        |       | 21,439.26 m2 (1)                                           |
| Nord Anglia International School Shanghai, Pudong   (Pudong, Shanghai, China) |       | 2022                                        |       | 25,413.13 m2 (2)                                           |
| The British International School Shanghai, Puxi   (Puxi, Shanghai, China)     |       | 2025/2036                                   |       | 24,668.11 m2 (3)                                           |
| The British School of Guangzhou (Guangzhou, China)                       |       | 2017 / or upon 2 years   notice by landlord |       | 5,229 m2 / 29,187 m2  / 7,349 m2 / 7,538 m2 |
| Léman International School (Chengdu, China)                              |       | 2030                                        |       | 25,000 m2 (4)                                              |
| Nord Anglia International School Hong Kong (Hong   Kong, China)               |       | 2023                                        |       | 4,555 m2 (5)                                               |
| **Europe**                                                                    |       |                                        |       |                                                       |
| Collège Beau-Soleil (Villars-sur-Ollon, Switzerland)                     |       | 2035/2027                                   |       | 1,900 m2 (6) / 1,473.35 m2 (7)                        |
| Collège Champittet, Pully (Pully, Switzerland)                           |       | 2026                                        |       | 48,971 m2                                                  |
| Collège Champittet, Nyon (Nyon, Switzerland)                             |       | 2017                                        |       | 3,375.6 m2                                                 |
| La Côte International School (Aubonne, Switzerland)                      |       | 2039                                        |       | 9,350 m2 (8)                                               |
| Collège du Léman (Geneva, Switzerland)                              |       | 2090/2090                                   |       | 6,675 m2 (9) / 65,503 m2 (9)                          |
| The English International School Prague (Prague,   Czech Republic)            |       | 2032                                        |       | 27,328 m2                                                  |
| The British School Warsaw (Warsaw, Poland)                                    |       | 2035/auto-renew                             |       | 7,900 m2 (10)  / 1,048 m2 (11)                   |

 

51

----

Table of Contents

 

| **School**                                                                                  | ** ** | **Termination Date*** | ** ** | **Area +**                                                    |
|---------------------------------------------------------------------------------------------|------------|----------------------------|------------|--------------------------------------------------------------------|
| The British International School Bratislava   (Bratislava, Slovakia)                        |       | 2016 / 2039                |       | 729 m2 / 20,124 m2                                            |
| The British International Budapest (Budapest,   Hungary)                                    |       | 2039/2039                  |       | 12,280 m2 / 4,664 m2                                          |
| International College Spain (Madrid, Spain)                                                 |       | 2026                       |       | 34,654 m2                                                          |
| **ME/SEA**                                                                                  |       |                       |       |                                                               |
| The British International School (Abu Dhabi, UAE)                                           |       | 2025                       |       | 19,440 m2                                                          |
| Compass International School Doha, Gharaffa (Gharaffa,   Doha, Qatar)                       |       | 2020                       |       | 9,427 m2                                                           |
| Compass International School Doha, Madinat Khalifa   (Madinat Khalifa, Doha, Qatar)         |       | 2022                       |       | 9,550 m2                                                           |
| Compass International School Doha, Rayyan (Al   Rayyan, Doha, Qatar)                        |       | 2024                       |       | 5,650 m2                                                           |
| Nord Anglia International School, Al Khor (Al Khor,   Doha, Qatar)                          |       | N/A                        |       | 18,617 m2                                                          |
| Nord Anglia International School (Dubai, UAE)                                               |       | 2017                       |       | 32,516.05 m2 (5)                                                   |
| Regents International School Pattaya (Pattaya,   Thailand)                                  |       | 2037                       |       | 81,560 m2                                                          |
| St Andrews International School Bangkok (Bangkok, Thailand)                                 |       | 2038                       |       | 18,640 m2                                                          |
| Dover Court International School (Singapore)                                                |       | 2020/2017                  |       | 16,369 m2 (5) / 27,136.70 m2 (12)                             |
| Northbridge International School Cambodia (Phnom   Penh, Cambodia)                          |       | 2039                       |       | 69,491 m2 (13)                                                     |
| The British International School of Ho Chi Minh City   (HCMC, Vietnam)                      |       | 2039                       |       | 18,721 m2 (9)                                                      |
| The British Vietnamese International School Ho Chi   Minh City (HCMC, Vietnam)              |       | 2040                       |       | 14,568 m2 (9)                                                      |
| The British International School Hanoi (Hanoi,   Vietnam)                                   |       | 2042                       |       | 40,876 m2 (9)                                                      |
| The British Vietnamese International School Hanoi   (Hanoi, Vietnam)                        |       | 2043                       |       | 19,147 m2 (9)                                                      |
| **North America**                                                                           |       |                       |       |                                                               |
| The British School of Washington (Washington, D.C.,   U.S.A)                                |       | 2019                       |       | 10,379 m2                                                          |
| The British International School of Boston. (Boston,   Massachusetts, U.S.A)                |       | 2020/2020                  |       | 4,323 m2 (14) /613 m2                                         |
| The British International School of Houston   (Houston, Texas, U.S.A)                       |       | N/A                        |       | 59,422 m2                                                          |
| The British International School of Chicago, Lincoln   Park (Chicago, Illinois, U.S.A) |       | 2015/2017/2016/ 2040       |       | 176 m2 (4) / 354 m2 (4) / 218 m2 (4) / 7,702 m2 (4) |
| The British International School of Chicago,   Southloop (Chicago, Illinois, U.S.A)    |       | 2035                       |       | 9,476 m2 (4)                                                       |
| The British International School of Charlotte   (Charlotte, North Carolina, U.S.A)          |       | 2021                       |       | 5,041 m2 (15)                                                      |
| Nord Anglia International School New York (New York,   New York, U.S.A)                     |       | 2025                       |       | 5,047 m2 (4)                                                       |
| The Village School (Houston, Texas, U.S.A)                                                  |       | N/A (16)                   |       | 20,866 m2 (4)                                                      |
| North Broward Preparatory School (Coconut Creek,   Florida, U.S.A)                          |       | N/A (16) / N/A (16)   |       | 16,520 m2 (4) / 3,847 m2 (4)                                  |
| Windermere Preparatory School (Windermere, Florida,   U.S.A)                                |       | 2046                       |       | 14,580 m2 (4)                                                      |
| Instituto San Roberto (Monterrey, Mexico)                                                   |       | 2046 (17)                  |       | 52,065 m2 (18)                                                     |

 

----

*                                         More than one date indicates the termination date of multiple leases.

 

+                                         Unless otherwise indicated, the total area includes the area of the school building(s) and the size/area of the plot of land/grounds/playground/parking and etc. outside of the school building(s).

 

(1)                                 Area of the building(s) only; the area of land is 33,300 m2.

(2)                                 Area of the building(s) only; the area of land is 72,517 m2.

(3)                                 Area of the building(s) only; the area of land is 50,728 m2.

(4)                                 Area of the building(s) only.

(5)                                 Area of land with school building(s).

(6)                                 Area of the building(s) only; the area of land is 7,999 m2.

(7)                                 Area of the building(s) only; this is a shared building and we do not have our own land.

(8)                                 Area of the building(s) only; the area of land is 8,060 m2.

(9)                                 Area of the land plot only.

(10)                          Area of the building(s) only; the area of land is 16,938 m2.

(11)                          Area of the building(s) only; the area of land is 5,557 m2.

(12)                          Area of land for playfield only.

(13)                          Area includes two plots of land and existing and future buildings and structures thereon, including works under construction and future improvements.

(14)                          Area of the building(s) only; the area of land is 153,362 m2; the land is shared with the landlord.

(15)                          Area of the building(s) only; the area of land is 10.8 acres.

(16)                          The schools own the principal real estate on which their campuses are located.

(17)                          One of the campuses has a soccer field lease that expires in 2047.

(18)                          Area of the building(s) only; the area of the land is 110,302 m2.

 

52

----

Table of Contents

 

**Item 4A.**                                  **Unresolved Staff Comments**

 

None.

 

**Item 5.**                                           **Operating and Financial Review and Prospects**

 

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F.  This discussion and analysis may contain forward-looking statements based upon current expectations that involve risks and uncertainties.  Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this annual report on Form 20-F.*

 

A.                                                                      Operating Results

 

**Overview**

 

We believe we are the world’s leading global operator of premium international schools. We have over 34,300 full time equivalent students (“FTEs”), from kindergarten through the end of secondary school (“K-12”), at our 42 premium schools in China, Europe, ME/SEA and North America.  As of November 15, 2015, we had 34,314 FTEs and capacity of 48,998 seats, representing a utilization rate of 75%.

 

**Recent Developments**

 

On August 31, 2015, we opened the British International School of Chicago’s new 1,100 seat campus in the South Loop of Chicago. Located on South Wells Street, the South Loop campus serves students from preschool through high school, complementing the British International School of Chicago’s existing Lincoln Park campus, which has recently been refurbished for students from preschool through Grade 5.

 

**Factors Affecting Our Results of Operations**

 

***Key Performance Indicators***

 

We use the following key operating metrics to manage our schools:   FTEs, capacity, utilization and revenue per FTE.  We monitor FTEs on a weekly basis and the other operating metrics on a monthly, quarterly and annual basis, as we believe that they are the most reliable metrics for measuring the profitability of our schools.

 
| ** **                                                          | ** ** | **Year Ended August 31,** | ** ** |
|---------------------------------------------------------------------|------------|------------------------------------------|------------|
| ** **                                                          | ** ** | **2013**                                 | ** ** | **2014** | ** ** | **2015** | ** ** |
| **Full-time   equivalent students (average for the period)****(1)** |       |                                     |       |   |   |   |   |
| China                                                               |       | 4,075                                    |       | 4,827 |   | 5,228 |   |
| Europe                                                              |       | 3,838                                    |       | 4,514 |   | 4,624 |   |
| ME/SEA                                                              |       | 2,112                                    |       | 5,230 |   | 9,618 |   |
| North America                                                       |       | 254                                      |       | 2,742 |   |  2,816 |   |
| **Total**                                                           |       | **10,279**                               |       | **17,313** |   | ** 22,286** |   |
| **Capacity   (average for the period)****(2)**                      |       |                                     |       |   |   |   |   |
| China                                                               |       | 5,375                                    |       | 6,964 |   | 7,756 |   |
| Europe                                                              |       | 4,496                                    |       | 5,322 |   | 6,084 |   |
| ME/SEA                                                              |       | 2,909                                    |       | 5,961 |   | 13,758 |   |
| North America                                                       |       | 366                                      |       | 3,760 |   |  3,760 |   |
| **Total**                                                           |       | **13,146**                               |       | **22,007** |   | ** 31,358** |   |
| **Utilization   (average for the period)****(3)**                   |       |                                     |       |   |   |   |   |
| China                                                               |       | 76                                       | %          | 69 | % | 67 | % |
| Europe                                                              |       | 85                                       | %          | 85 | % | 76 | % |
| ME/SEA                                                              |       | 73                                       | %          | 88 | % | 70 | % |
| North America                                                       |       | 69                                       | %          | 73 | % | 75 | % |
| **Total**                                                           |       | **78**                                   | **%**      | **79** | **%** | **71** | **%** |
| **Revenue   per FTE (in $ thousands)****(4)**                  |       |                                     |       |   |   |   |   |
| China                                                               |       | 33.8                                     |       | 34.3 |   | 35.0 |   |
| Europe                                                              |       | 30.2                                     |       | 30.1 |   | 28.8 |   |
| ME/SEA                                                              |       | 16.1                                     |       | 16.4 |   | 17.1 |   |
| North America                                                       |       | 31.1                                     |       | 25.1 |   |  29.3 |   |
| **Total**                                                           |       | **28.7**                                 |       | **26.4** |   | ** 25.3** |   |

 

----

(1)                                 We calculate average FTEs for a period by dividing the sum of the number of FTEs at each calendar month end in the period by the number of calendar months in the period.

 

(2)                                 We calculate average capacity for a period by dividing the total number of FTEs that can be accommodated based on existing classrooms at each academic calendar month divided by the number of months in such period.

 

(3)                                 We calculate utilization for a period as a percentage equal to the average FTEs for the period divided by average capacity for the period.

 

(4)                                 We calculate revenue per FTE for a period by dividing revenue from our schools for the period by the average FTEs for the period.

 

53

----

Table of Contents

 

*Full-Time Equivalent Students*.  Because our schools derive substantially all of their revenue from tuition fees, the number of FTEs enrolled in our schools is critical to our operating performance and growth.  As a result, we monitor the number of FTEs to measure the performance of our schools.  We also monitor FTEs on a school-by-school basis to help plan capacity expansion and track local market trends.

 

We define 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 enrolls for three full days a week equals 0.6 FTEs and a student who enrolls for five mornings a week equals 0.5 FTEs.  We calculate average FTEs for a period by dividing the total number of FTEs at each calendar month-end in the period by the number of calendar months in the period.

 

The number of same-school FTEs fluctuates throughout the academic year, as new students enroll or as current students depart.  Our average FTEs have grown from 8,180 in fiscal 2012 to 22,286 in fiscal 2015.  The increase resulted from growing enrollments at our schools and acquisitions of new schools.

 

In addition to monitoring our FTEs, we also focus on the number of inquiries, visits and applications by prospective students at each of our schools and the number of applications that result in enrollments.  In our experience, the ratios of inquiries to visits and of visits to enrollments are leading indicators of student enrollments.  Thus, in our marketing and recruitment activities we seek to maximize the generation of inquiries, the conversion of inquiries into visits, of visits into applications and of applications into enrollments.

 

*Capacity*.  We calculate average capacity for a period by dividing the total number of FTEs that we can accommodate at each calendar month-end in the period by the number of calendar months in the period.

 

We increased our average capacity from 13,146 places in fiscal 2013 to 31,358 places in fiscal 2015.  The increase resulted primarily from the acquisition of new premium schools in China, Switzerland, Spain, Thailand, the United States, Qatar, Singapore, Cambodia, Vietnam and Mexico and capacity expansion at our schools in all our regions.

 

*Utilization*.  We calculate utilization for a period as a percentage equal to the ratio of average FTEs for the period divided by average capacity for the period.

 

In fiscal 2013, 2014 and 2015 we had average utilization of 78%, 79% and 71%, respectively.  The reduction in utilization was primarily due to the schools we acquired in Vietnam with 44% utilization on acquisition and the opening of our new schools in Dubai and Aubonne.

 

*Revenue per Full-Time Equivalent Student*.  We calculate revenue per FTE for a period by dividing the revenue from our schools for the period by the average FTEs for the period.  Revenue per FTE is impacted primarily by the tuition fees we charge at each of our premium schools and the revenue per FTE of new schools that we acquire relative to our other premium schools within those regions.

 

Revenue per FTE, and therefore our revenue, is directly impacted by our ability to increase tuition fees year on year at each of our premium schools.  A majority of our tuition fees are paid by expatriate employers, who we believe accept price increases because education allowances typically represent only a small percentage of an expatriate’s total compensation package.  We believe self-funding expatriates and affluent local families accept our price increases because of the importance they place on a quality education for their children.  As a result, we have been able to increase tuition fees at our premium schools at an average of approximately 4-5% per year over the last five years, which we believe to be in excess of the median rate of inflation in the markets where these schools are located.

 

Almost all of our tuition fees are charged in the local currencies of the countries where the schools are located.  Therefore, our revenue per FTE is subject to fluctuations in foreign exchange rates between these local currencies and our reported currency, the US dollar.  See “—Currency Translation.”

 

54

----

Table of Contents

 

***Acquisitions***

 

In the three years ended August 31, 2015, we acquired 25 schools in Switzerland, China, Thailand, Singapore, Cambodia, the United States, Qatar, Spain, Vietnam and Mexico; we continue to assess a pipeline of acquisition opportunities and look for new acquisition opportunities.

 

The following table shows our acquisitions during the three fiscal years ended August 31, 2015:

 
| **Fiscal 2013**                                        | ** ** | ** **    | ** ** | ** **          |
|-------------------------------------------------------------|------------|---------------|------------|---------------------|
| International   College Spain                               |       | Spain         |       | May 2013       |
| Compass   International School Doha, Gharaffa               |       | Qatar         |       | May 2013       |
| Compass   International School Doha, Madinat Khalifa        |       | Qatar         |       | May 2013       |
| Compass   International School Doha, Rayyan                 |       | Qatar         |       | May 2013       |
| Compass   International School, Al Khor                     |       | Qatar         |       | May 2013       |
| The British   School of Washington                          |       | United States |       | May 2013       |
| The British International   School of Boston                |       | United States |       | May 2013       |
| The British   International School of Houston               |       | United States |       | May 2013       |
| The British   International School of Chicago, Lincoln Park |       | United States |       | May 2013       |
| The British   International School of Charlotte             |       | United States |       | May 2013       |
| Nord Anglia   International School New York                 |       | United States |       | May 2013       |
| The British   School of Guangzhou                           |       | China         |       | July 2013(1)   |
| St. Andrews   International School Bangkok                  |       | Thailand      |       | August 2013(1) |

 
| **Fiscal 2014**                        | ** ** | ** ** | ** ** | ** **        |
|---------------------------------------------|------------|------------|------------|-------------------|
| Dover Court International   School          |       | Singapore  |       | April 2014   |
| Northbridge   International School Cambodia |       | Cambodia   |       | July 2014(1) |

 
| **Fiscal 2015**                                            | ** ** | ** **    | ** ** | ** **        |
|-----------------------------------------------------------------|------------|---------------|------------|-------------------|
| The British   International School, Ho Chi Minh City            |       | Vietnam       |       | January 2015 |
| The British   Vietnamese International School, Ho Chi Minh City |       | Vietnam       |       | January 2015 |
| The British   International School, Hanoi                       |       | Vietnam       |       | January 2015 |
| The British   Vietnamese International School Hanoi             |       | Vietnam       |       | January 2015 |
| The Village   School                                            |       | United States |       | June 2015    |
| North Broward Preparatory   School                              |       | United States |       | June 2015    |
| Windermere   Preparatory School                                 |       | United States |       | June 2015    |
| Instituto San   Roberto                                         |       | Mexico        |       | June 2015    |
| Collège du Léman                                      |       | Switzerland   |       | June 2015    |
| Léman   International School                               |       | China         |       | June 2015    |

 

----

(1)                                 Premium schools acquired during the summer months of July and August do not have a significant impact on the current fiscal year results as most school years commence on September 1, which is the first day of the following fiscal year, and revenue and direct teaching costs are not recognized during July and August in line with our accounting policies.

 

55

----

Table of Contents

 

***Increased Focus on Premium Schools***

 

In fiscal 2012, we made a strategic decision to no longer bid on new learning services contracts and gradually phased out some of our existing contracts. As a result, our premium schools revenue, as a percentage of our total revenue, has grown significantly. In fiscal 2013, 2014 and 2015, revenue from our premium schools represented 84.7%, 91.2%, 96.2% and 97.6%, respectively, of our total revenue. In fiscal 2015, other revenue, which is predominantly revenue from learning services, accounted for 2.4% of our revenue and contributed 1.0% of our Adjusted EBITDA (before the allocation of central and regional costs). In the three years ended August 31, 2015, we acquired 25 schools in Switzerland, China, Thailand, the United States, Qatar, Spain, Singapore, Cambodia, Mexico and Vietnam and have expanded capacity at our schools in North America, China, ME/SEA and Europe. In September 2014 we opened new schools in Hong Kong and Dubai and in September 2015, we opened a new school in Chicago. We expect to further expand our network of premium schools and increase capacity at existing schools.

 

***Macroeconomic Conditions***

 

The results of our operations are indirectly affected by general economic conditions in each of the countries in which we operate, which may influence the demand for premium schools education and the tuition fees we are able to charge at our schools.  As a result of the importance parents place on education in the markets in which we operate and the relative resilience shown by expatriate flows during difficult economic conditions, we believe our revenue and profitability are resilient to fluctuations as a result of macro-economic conditions.  We have grown our business significantly since 2008 despite a challenging global economic climate.  Total enrollment in our schools has grown at a CAGR of 29% from the end of fiscal 2008 to the end of fiscal 2015, and we have raised our tuition fees by an average of approximately 4-5% per year over the last five years.

 

***Currency Translation***

 

We conduct our business in several major currencies, most notably the Chinese renminbi, Swiss franc, Polish zloty, pound sterling, U.A.E. dirham, Qatari riyal, euro, Thai baht, Hong Kong dollar, Singapore dollar, Cambodian riel and U.S. dollar, while our reporting currency is the U.S. dollar.  Prior to our acquisition of WCL Group in May 2013, almost all of our revenue was recorded in currencies other than the U.S. dollar.  Fluctuations in exchange rates between the U.S. dollar and our other operating currencies affect the translation of our results and the net assets or liabilities of our overseas entities into U.S. dollars.

 

In fiscal 2013, the Chinese renminbi, the Polish zloty and Thai baht all strengthened against the US dollar while the British pound and the Swiss franc weakened against the dollar.  Overall, the impact of these movements positively influenced our results in that period.

 

In fiscal 2014, the Chinese renminbi, the Polish zloty, British pound, euro and Swiss franc all strengthened against the US dollar while the Thai baht weakened against the dollar.  Overall, the impact of these movements positively influenced our results in that period.

 

In fiscal 2015, the U.S. dollar strengthened against all our major trading currencies. Overall, the impact of these movements negatively influenced our results in that period.

 

Substantially all of our revenues and costs are denominated in the local currencies.  We recognize translational gains and losses primarily upon the conversion of our foreign currency denominated earnings into U.S. dollars through other comprehensive income.

 

56

----

Table of Contents

 

**Supplementary Financial Data**

 

The following table sets forth certain supplementary financial data for the periods indicated.

 
| ** **                      | ** ** | **Year Ended August 31,**    | ** ** |
|---------------------------------|------------|---------------------------------------------|------------|
| ** **                      | ** ** | **2013**                                    | ** ** | **2014** | ** ** | **2015** | ** ** |
| ** **                      | ** ** | **(in millions of dollars)** | ** ** |
| **Revenue   (segment)**         |       |                                        |       |   |   |   |   |
| Premium Schools                 |       |                                        |       |   |   |   |   |
| China                           |       | 137.7                                       |       | 165.6 |   | 183.2 |   |
| Europe                          |       | 115.8                                       |       | 136.0 |   | 133.3 |   |
| ME/SEA                          |       | 33.9                                        |       | 86.0 |   | 164.1 |   |
| North America                   |       | 7.9                                         |       | 68.8 |   | 82.6 |   |
| **Total   Premium Schools**     |       | **295.3**                                   |       | **456.4** |   | **563.2** |   |
| Other                           |       | 28.4                                        |       | 18.2 |   | 13.8 |   |
| **Total   Revenue**             |       | **323.7**                                   |       | **474.6** |   | **577.0** |   |
|                            |       |                                        |       |   |   |   |   |
| **Adjusted   EBITDA (segment)** |       |                                        |       |   |   |   |   |
| Premium Schools                 |       |                                        |       |   |   |   |   |
| China                           |       | 66.8                                        |       | 78.4 |   | 84.9 |   |
| Europe                          |       | 22.7                                        |       | 26.0 |   | 17.1 |   |
| ME/SEA                          |       | 5.9                                         |       | 22.2 |   | 39.6 |   |
| North America                   |       | 0.3                                         |       | 23.2 |   | 22.6 |   |
| **Total   Premium Schools**     |       | **95.7**                                    |       | **149.8** |   | **164.2** |   |
| Other                           |       | 6.6                                         |       | 4.0 |   | 1.5 |   |
| Central and regional   expenses |       | (22.8                                       | )          | (26.4 | ) | (32.0 | ) |
| **Adjusted   EBITDA**           |       | **79.5**                                    |       | **127.4** |   | **133.7** |   |
| **Adjusted   Net Income**       |       | **(1.3**                                    | **)**      | **22.8** |   | **43.5** |   |

 

We use EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings per Ordinary Share, Adjusted Cost of Sales and Adjusted Gross Profit as supplemental financial measures of our operating performance. We define EBITDA as (loss)/profit for the period plus income tax expense, net financing (expense)/income, exceptional items, impairment of goodwill, amortization and depreciation, and we define Adjusted EBITDA as EBITDA adjusted for the items set forth in the table below. We define Adjusted Net Income as Adjusted EBITDA adjusted for the items in the table below. We define Adjusted Earnings per Ordinary share as Adjusted Net Income divided by the weighted average ordinary shares outstanding for the period. We define Adjusted Cost of Sales as cost of sales excluding Premium School land and building operating lease costs and depreciation charges arising from tangible assets owned by Premium Schools, and we define Adjusted Gross Profit as revenue less Adjusted Cost of Sales. EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings per Ordinary Share, Adjusted Cost of Sales and Adjusted Gross Profit are not standard measures under IFRS. These measures should not be considered in isolation or construed as alternatives to cash flows, net income, earnings per ordinary share or any other measure of financial performance or as indicators of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities. We may incur expenses similar to the adjustments in this presentation in the future and certain of these items could be recurring. EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings per Ordinary Share, Adjusted Cost of Sales and Adjusted Gross Profit presented herein may not be comparable to similarly titled measures presented by other companies.

 

57

----

Table of Contents

 

**Reconciliation of Adjusted Cost of Sales, Adjusted Gross Profit, EBITDA, Adjusted EBITDA and Adjusted Net Income**

 

Set forth below is a reconciliation of Adjusted Cost of Sales, Adjusted Gross Profit, EBITDA, Adjusted EBITDA and Adjusted Net Income to the most directly comparable IFRS measure for the periods indicated:

 
| ** **                                                     | ** ** | **Year Ended August 31,**                                               | ** ** |
|----------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|
| ** **                                                     | ** ** | **2013**                                                                               | ** ** | **2014** | ** ** | **2015** | ** ** |
| ** **                                                     | ** ** | **(in millions of dollars, except per share data)** | ** ** |
| Revenue                                                        |       | 323.7                                                                                  |       | 474.6 |   | 577.0 |   |
| Cost of Sales                                                  |       | (190.4                                                                                 | )          | (280.3 | ) | (355.9 | ) |
| Rent Premium   Schools                                         |       | 31.5                                                                                   |       | 44.4 |   | 56.3 |   |
| Depreciation   Premium Schools                                 |       | 11.3                                                                                   |       | 21.4 |   | 33.9 |   |
| Adjusted Cost of   Sales                                       |       | (147.6                                                                                 | )          | (214.5 | ) | (265.7 | ) |
| **Adjusted   Gross Profit**                                    |       | **176.1**                                                                              |       | **260.1** |   | **311.3** |   |
|                                                           |       |                                                                                   |       |   |   |   |   |
| (Loss)/profit   for the period                                 |       | (23.3                                                                                  | )          | (90.4 | ) | 8.6 |   |
| Income tax   (credit)/expense                                  |       | 19.3                                                                                   |       | 25.7 |   | 12.2 |   |
| Net financing   expense(1)                                     |       | 49.0                                                                                   |       | 53.5 |   | 36.9 |   |
| Exceptional   items(2)                                    |       | 17.7                                                                                   |       | 100.2 |   | 18.8 |   |
| Other losses(3)                                                |       | —                                                                                 |       | — |   | 3.0 |   |
| Amortization                                                   |       | 5.7                                                                                    |       | 10.4 |   | 13.9 |   |
| Depreciation                                                   |       | 0.4                                                                                    |       | 2.0 |   | 0.7 |   |
| Depreciation in   Cost of Sales                                |       | 11.3                                                                                   |       | 21.4 |   | 33.9 |   |
| **EBITDA**                                                     |       | **80.1**                                                                               |       | **122.8** |   | **128.0** |   |
| (Gain)/loss on   disposal of property, plant and equipment(4)  |       | 0.1                                                                                    |       | 0.1 |   | 0.3 |   |
| FX (gain)/loss(5)                                              |       | (4.0                                                                                   | )          | (4.0 | ) | (3.9 | ) |
| Share based   payments(6)                                      |       | 0.1                                                                                    |       | 3.1 |   | 2.8 |   |
| Management fees   — sponsor(7)                            |       | 3.3                                                                                    |       | 1.2 |   | — |   |
| Greenfield   pre-opening costs(8)                              |       | —                                                                                 |       | 4.1 |   | 4.0 |   |
| Rollout of   Juilliard program(9)                              |       | —                                                                                 |       | — |   | 0.7 |   |
| China expat taxes(10)                                          |       | —                                                                                 |       | — |   | 1.1 |   |
| Other                                                          |       | (0.1                                                                                   | )          | 0.1 |   | 0.7 |   |
| **Adjusted   EBITDA**                                          |       | **79.5**                                                                               |       | **127.4** |   | **133.7** |   |
|                                                           |       |                                                                                   |       |   |   |   |   |
| Depreciation                                                   |       | (11.7                                                                                  | )          | (23.4 | ) | (34.6 | ) |
| Net Financing   Expense(1)                                     |       | (49.0                                                                                  | )          | (53.5 | ) | (36.9 | ) |
| Income Tax   (Credit)/Expense                                  |       | (19.3                                                                                  | )          | (25.7 | ) | (12.2 | ) |
| Tax Adjustments(11)                                            |       | (0.8                                                                                   | )          | (2.0 | ) | (5.3 | ) |
| Non-controlling   Interest                                     |       | —                                                                                 |       | — |   | (1.2 | ) |
| **Adjusted   Net (Loss)/Income**                               |       | **(1.3**                                                                               | **)**      | **22.8** |   | **43.5** |   |
|                                                           |       |                                                                                   |       |   |   |   |   |
| Adjusted   (Loss)/Earnings per Ordinary Share (in dollars)(12) |       |                                                                                   |       |   |   |   |   |
| Basic                                                          |       | (0.02                                                                                  | )          | 0.27 |   | 0.44 |   |
| Diluted                                                        |       | (0.02                                                                                  | )          | 0.27 |   | 0.44 |   |

 

----

(1)                                 In March 2014 we drew down in full on a new $515.0 million term loan facility and using proceeds from the loan and our initial public offering, we discharged our obligations under the indentures governing our $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.  In March 2015, we incurred $150 million of incremental loans under the facility to finance our acquisition of three schools in Vietnam and for general corporate purposes.  In June 2015, we incurred an additional $240 million of incremental loans under the facility and issued CHF 200 million in aggregate principal amount of 5.75% senior secured notes due 2022 to partially finance our acquisition of the Meritas Schools.

 

(2)                                 In fiscal 2013, exceptional expenses primarily related to the acquisition of schools, including associated transaction and integration costs and transaction management fees paid to Baring Private Equity Asia or its affiliates associated with our notes issuances.  In fiscal 2014, exceptional expenses primarily related to the costs associated with our initial public offering and refinancing and expenses related to the acquisitions of schools, including associated transaction and integration costs.  In fiscal 2014, we incurred exceptional charges of $89.9 million related to the redemption of our outstanding notes, including the release of $12.9 million of prepaid costs.  In fiscal 2015, exceptional expenses primarily related to the acquisition of schools, including associated transaction and integration costs and debt issuance costs in connection with the acquisitions that were not capitalized on the balance sheet.

 

(3)                                 Relates to the put/call option for the remaining 10% interest in The British International Schools Group (BIS Vietnam) we acquired on March 2, 2015.

 

(4)                                 In fiscal 2013, 2014 and 2015, includes loss on disposal of property, plant and equipment associated with the termination of learning services contracts and the closure of associated offices in the UK.

 

(5)                                 Represents foreign currency translational losses/(gains) primarily associated with our inter-company balances and in fiscal 2015 includes a foreign currency translational gain associated with the translation of our CHF200 million 5.75% Senior Secured Notes due 2022.

 

(6)                                 Represents non-cash charges associated with equity investments in our company by members of management.

 

(7)                                 Represents management fees paid to Premier Education Holdings Ltd.

 

(8)                                 In fiscal 2014, includes the pre-opening costs associated with the opening of our schools in Hong Kong and Dubai in September 2014.  In fiscal 2015, includes the pre-opening costs associated with the opening of our second school in Chicago in September 2015.

 

(9)                                 Represents the costs associated with the initial roll-out of The Juilliard-Nord Anglia Performing Arts Program which commenced in ten schools in September 2015.

 

(10)                          Represents costs associated with expatriate taxes levied on teacher salaries relating to the period prior to the year-ended August 31, 2014.

 

(11)                          Represents the tax impact associated with the exclusion of certain costs including exceptional items and amortization in calculating Adjusted Net Income based on the fiscal 2016 forecast tax rate of 28.5%.

 

(12)                          Calculated by dividing Adjusted Net Income for the period by the weighted average ordinary shares outstanding for the period.  For the year ended August 31, 2013, the basic and diluted weighted average ordinary shares outstanding were 74.0 million.  For the year ended August 31, 2014, the basic and diluted weighted average ordinary shares outstanding were 85.1 million.  For the year ended August 31, 2015, the basic and diluted weighted average ordinary shares outstanding were 99.4 million and 99.5 million, respectively.

 

58

----

Table of Contents

 

**Principal Components of Our Results of Operations**

 

***Revenue***

 

Revenue is recognized net of indirect taxes, returns, rebates and discounts.  Sales of services which have been invoiced but not yet recognized as revenue are included on the balance sheet as deferred income.

 

*School fee income*

 

School fee income comprises tuition fees and income from ancillary sources, including registration fees, examinations, school trips, bus transportation and lunch fees.  School fee income is generally payable in advance, on or before the first day of each term.  We generally recognize school fee income over the ten months of the school term from September to June.  Where we receive fees in advance of more than one term, the income is recognized over the months in the terms for which payment has been made.  At a majority of our schools, our terms and conditions require a full term’s notice of withdrawal for a refund of prepaid tuition.  The final academic term at most of our schools starts in April of each year and historically we have had few requests for refunds.

 

***Cost of Sales***

 

Cost of sales primarily represents direct educational expenses and consultancy expenses.  Direct educational expenses primarily consist of salary and benefits for school principals, teaching staff and lecturers employed in our schools and the cost of teaching materials, school lunches, bus services and certain after school activities.

 

Consultancy expenses include the cost of independent consultants we use in the delivery of our learning services contracts.

 

Cost of sales also include expenses in respect of our premium schools’ land and building operating leases and depreciation charges arising from tangible assets owned by premium schools.

 

***Selling, General and Administrative Expenses***

 

Our selling, general and administrative expenses consist primarily of compensation and associated expenses for our management, finance, human resources, marketing, education policy and administrative personnel at our corporate headquarters as well as regional teams in China, Europe, ME/SEA and North America. Selling, general and administrative expenses also include compensation and associated costs for our admissions and marketing personnel and other support staff in our schools and outside professional fees, legal fees, audit fees and fees for tax advisory, and other corporate expenses. Unrealized foreign exchange gains and losses due primarily to retranslation of currencies on our inter-company balances are also included in our selling, general and administrative expenses but are added back or deducted when calculating our Adjusted EBITDA, as are any gains or losses on the disposal of property, plant and equipment.

 

***Other Operating Expenses***

 

Other operating expenses consist primarily of amortization and impairment charges on intangible assets, depreciation expenses and other non-operating expenses.

 

***Finance Income***

 

Finance income primarily consists of interest on bank deposits.

 

***Finance Expenses***

 

Finance expenses represent interest on borrowings and financial leases, shareholder loan notes and certain other miscellaneous interest costs.

 

59

----

Table of Contents

 

***Income Tax Expense***

 

Income tax expense consists of corporate income tax in the jurisdictions in which we operate as well as withholding taxes on dividends.  Income tax expense also includes a charge or credit for deferred tax.  Fluctuations in our effective tax rate are primarily attributed to changes in the operating results of our subsidiaries, which are subject to various tax rates and tax concessions in their respective jurisdictions.

 

**Critical Accounting Policies**

 

The preparation of our financial statements requires management to make judgments, 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 our 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 cash-generating unit (“CGU”) that benefitted from that business combination. We 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.

 

***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 income statement when the asset is derecognized.

 

60

----

Table of Contents

 

***Fair value measurement***

 

We measure 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 summarized in the following notes to our audited financial statements included elsewhere in this annual report:

 
| ·                  Disclosures for valuation methods,   significant estimates and assumptions | Note 1, 2, 23 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|
| ·                  Quantitative disclosures of fair   value measurement hierarchy             | Note 23       |
| ·                  Financial instruments (including   those carried at amortized cost)        | Note 23       |

 

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 us.

 

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.

 

We use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

 

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized 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, we determine whether transfers have occurred between levels in the hierarchy by re-assessing categorization (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, we have 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 the 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.

 

61

----

Table of Contents

 

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.

 

We determine 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, we consider 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.

 

***Share based payments***

 

We operate 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 income statement. Fair value is calculated by using the Black Scholes Option Pricing Model for share option schemes and the Binomial method for long term incentive plans. 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 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, the following; volatility, risk free interest rate, 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 us. On 2 March 2015, we acquired a 90% interest in The British International Schools Group (Vietnam). In accordance with IFRS 10 — Consolidated Financial Statements, we gained control of BIS Vietnam from 1 January 2015 and incorporated the results from the same date. Financial and operating control was deemed to be gained from 1 January 2015, because we obtained power over the relevant activities of Vietnam (including the right to appoint key staff and set fees) and the rights to the risks and rewards of Vietnam. After certain administrative matters were concluded (which could have been waived by us), the acquisition was completed. The impact of early consolidation increased revenue by $10.7 million and EBITDA by $3.1 million.

 

***Taxation***

 

There are undistributed earnings of $48.5 million (2014 - $38.6 million, 2013 - $26.3 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 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.

 

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 judgment 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, together with future tax planning strategies. We have $58.0 million of tax losses carried forward, and other timing differences of $7.7 million. These losses relate to subsidiaries that have a history of losses, do not expire, and may not be used to offset taxable income elsewhere in our group of companies. The subsidiaries neither have any taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, we have determined that it cannot recognize deferred tax assets on the tax losses carried forward & on the other timing differences. If we were able to recognize all unrecognized deferred tax assets, profit and equity would have increased by $65.7 million.

 

We are subject to income taxes in numerous jurisdictions. Significant judgment 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. We recognize 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 initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

 

62

----

Table of Contents

 

**Our Results of Operations**

 

The following table sets forth income statement data as a percentage of revenue indicated.

 
| ** **                                     | ** ** | **Year Ended August 31,** | ** ** |
|------------------------------------------------|------------|------------------------------------------|------------|
| ** **                                     | ** ** | **2013**                                 | ** ** | **2014** | ** ** | **2015** | ** ** |
| ** **                                     | ** ** | **$   millions**                         | ** ** | **%   Revenue** | ** ** | **$   millions** | ** ** | **%   Revenue** | ** ** | **$   millions** | ** ** | **%   Revenue** | ** ** |
| Revenue                                        |       | 323.7                                    |       | *100.0* | *%* | 474.6 |   | *100.0* | *%* | 577.0 |   | *100.0* | *%* |
| Cost of sales                                  |       | (190.4                                   | )          | *(58.8* | *)%* | (280.3 | ) | *(59.1* | *)%* | (355.9 | ) | *(61.7* | *)%* |
| **Gross   profit**                             |       | **133.3**                                |       | ***41.2*** | ***%*** | **194.3** |   | ***40.9*** | ***%*** | **221.1** |   | ***38.3*** | ***%*** |
| Selling, general   and administrative expenses |       | (64.5                                    | )          | *(19.9* | *)%* | (92.9 | ) | *(19.6* | *)%* | (127.0 | ) | *(22.0* | *)%* |
| Depreciation                                   |       | (0.4                                     | )          | *(0.1* | *)%* | (2.0 | ) | *(0.4* | *)%* | (0.7 | ) | *(0.1* | *)%* |
| Amortization                                   |       | (5.7                                     | )          | *(1.8* | *)%* | (10.4 | ) | *(2.2* | *)%* | (13.9 | ) | *(2.4* | *)%* |
| Other losses                                   |       | —                                   |       | — |   | — |   | — |   | (3.0 | ) | *(0.5* | *)%* |
| Exceptional   expenses                         |       | (17.7                                    | )          | *(5.5* | *)%* | (100.2 | ) | *(21.1* | *)%* | (18.8 | ) | *(3.3* | *)%* |
| **Total   expenses**                           |       | **(88.3**                                | )          | ***(27.3*** | ***)%*** | **(205.5** | **)** | ***(43.3*** | ***)%*** | (163.4 | ) | *(28.3* | *)**%*** |
| **Operating   profit/(loss)**                  |       | **45.0**                                 |       | ***13.9*** | ***%*** | **(11.2** | **)** | ***(2.4*** | ***)%*** | **57.7** |   | ***10.0*** | ***%*** |
| Finance income                                 |       | 2.3                                      |       | *0.7* | *%* | 2.0 |   | *0.4* | *%* | 2.8 |   | *0.5* | *%* |
| Finance expense                                |       | (51.3                                    | )          | *(15.8* | *)%* | (55.5 | ) | *(11.7* | *)%* | (39.7 | ) | *(6.9* | *)%* |
| **Net   finance expense**                      |       | **(49.0**                                | **)**      | ***(15.1*** | ***)%*** | **(53.5** | **)** | ***(11.3*** | ***)%*** | **(36.9** | **)** | ***(6.4*** | ***)%*** |
| (Loss)/profit   before income tax              |       | (4.0                                     | )          | *(1.2* | *)%* | (64.7 | ) | *(13.6* | *)%* | 20.8 |   | *3.6* | *%* |
| Income tax   expense                           |       | (19.3                                    | )          | *(6.0* | *)%* | (25.7 | ) | *(5.4* | *)%* | (12.2 | ) | *(2.1* | *)%* |
| **(Loss)/profit   for the year**               |       | **(23.3**                                | **)**      | ***(7.2*** | ***)%*** | **(90.4** | **)** | ***(19.0*** | ***)%*** | **8.6** |   | ***1.5*** | ***%*** |
| **Adjusted   EBITDA**                          |       | **79.5**                                 |       | ***24.6*** | ***%*** | **127.4** |   | ***26.8*** | ***%*** | **133.7** |   | ***23.2*** | ***%*** |
| **Adjusted   Net Income**                      |       | **(1.3**                                 | **)**      | ***(0.4*** | ***)%*** | **22.8** |   | ***4.8*** | ***%*** | **43.5** |   | ***7.5*** | ***%*** |

 

**Year ended August 31, 2015 compared to year ended August 31, 2014**

 

***Revenue***

 

Revenue increased $102.4 million, or 21.6% (25.2% on a constant currency basis), from $474.6 million in fiscal 2014 to $577.0 million in fiscal 2015. This increase was due to increases in FTEs and tuition fees at our existing schools and the impact of the schools we acquired in Singapore and Cambodia in fiscal 2014 and in Vietnam, China, Mexico, Switzerland and the United States in fiscal 2015.

 

Revenue from our premium schools increased $106.8 million, or 23.4% (27.6% on a constant currency basis), from $456.4 million in fiscal 2014 to $563.2 million in fiscal 2015. This increase was primarily due to increases in FTEs and tuition fees and the impact of the schools we acquired in Singapore and Cambodia in fiscal 2014 and Vietnam, China, Mexico, United States and Switzerland in fiscal 2015. $71.9 million of our premium schools revenue in fiscal 2015 was attributable to the schools we acquired in Singapore, Cambodia, Vietnam, China, Mexico, United States and Switzerland.

 

Other revenue decreased $4.4 million, or 24.0%, from $18.2 million in fiscal 2014 to $13.8 million in fiscal 2015. This decrease was primarily due to the end of a learning services contract in the UK.

 

***Cost of Sales***

 

Cost of sales increased by $75.6 million, or 27.0% (31.6% on a constant currency basis), from $280.3 million in fiscal 2014 to $355.9 million in fiscal 2015. The increase was primarily due to increased direct costs associated with the number of teachers added as a result of the schools we opened in Dubai and Hong Kong at the beginning of fiscal 2015 and the schools we acquired in Singapore, Cambodia, Vietnam, China, Mexico, United States and Switzerland. This cost of sales increase was partly offset by the lower cost of sales associated with the reduced learning services contracts, which resulted in a reduction in the number of consultants we employed.

 

Adjusted cost of sales increased $51.2 million, or 23.9%, from $214.5 million for fiscal 2014 to $265.7 million for fiscal 2015.

 

63

----

Table of Contents

 

***Gross Profit***

 

Gross profit increased $26.8 million, or 13.8%, from $194.3 million for the fiscal 2014 to $221.1 million in fiscal 2015, resulting in a gross profit margin of 38.3% for fiscal 2015 compared to 40.9% for fiscal 2014. The reduction in margin was largely due to the adverse impact of the loss-making schools opened in Dubai and Aubonne, strong growth in the lower margin ME/SEA region and the acquisition of schools in Vietnam and from Meritas with a lower gross margin than our existing schools, partially offset by tuition fee increases in excess of cost inflation and increased FTEs within our schools.

 

Adjusted gross profit increased $51.2 million, or 19.9%, from $260.1 million for fiscal 2014 to $311.3 million for fiscal 2015, resulting in an adjusted gross profit margin of 54.0% for the fiscal 2015 compared to 54.8% for fiscal 2014.

 

***Selling, General and Administrative Expenses***

 

Selling, general and administrative (“SGA”) expenses increased $34.1 million, or 36.7% (43.9% on a constant currency basis), from $92.9 million for fiscal 2014 to $127.0 million for fiscal 2015. SGA expenses for both periods include charges for largely unrealized foreign exchange gains/losses, share-based payments and management fees. Adjusting for these items (see itemized adjustments in the Reconciliation of Adjusted Cost of Sales, Adjusted Gross Profit, EBITDA, Adjusted EBITDA and Adjusted Net Income table for relevant amounts), SGA expenses would have been $88.3 million for fiscal 2014 compared to $121.9 million in fiscal 2015, an increase of 38.0%.  This was higher than the revenue increase due to the timing of the acquisition of six schools from Meritas which completed on June 25, 2015.  The results for fiscal year 2015 therefore includes two full months of SGA and very little revenue or gross margin contribution.

 

***Depreciation & Amortization Expenses***

 

Depreciation expense decreased $1.3 million, or 66.0%, from $2.0 million in fiscal 2014 to $0.7 million in fiscal 2015.  Total depreciation, including depreciation charged to Cost of Sales increased by $11.2 million from $23.4 million in fiscal 2014 to $34.6 million in fiscal 2015, largely reflecting the impact of the new greenfield schools opened in September 2014 and the impact of the acquisitions completed in fiscal 2014 and fiscal 2015.

 

Amortization expense on intangible assets increased $3.5 million, or 33.7%, from $10.4 million in fiscal 2014 to $13.9 million in fiscal 2015 due to the impact of the acquisitions mentioned above.

 

***Other losses***

 

In fiscal 2015, we incurred $3.0 million other losses relating to the put/call option for the remaining 10% interest in The British International Schools Group  (BIS Vietnam) we acquired on March 2, 2015.

 

***Exceptional Expenses***

 

Exceptional expenses decreased $81.4 million from $100.2 million in fiscal 2014 to $18.8 million in fiscal 2015. The charge of $100.2 million in fiscal 2014 reflects the impact of our IPO and refinancing completed in the third quarter, including charges of $89.9 million related to the redemption of our outstanding notes (including the release of $12.9 million of prepaid costs). We also incurred an exceptional charge of $2.5 million in connection with the transfer of our transactional banking and revolving credit facility from Barclays Bank PLC to the Hong Kong and Shanghai Bank in January 2014.  The charge of $18.8 million in fiscal 2015 includes $17.7 million relating to the acquisition and integration related costs of the acquisitions completed during fiscal 2015.

 

***Net Financing Expense***

 

Net financing expense decreased by $16.6 million, or 31.0%, from $53.5 million for fiscal 2014 to $36.9 million for fiscal 2015, due to the reduced interest expense on the $515.0 million term loan facility following the completion of our IPO partially offset by the increased interest expense from the additional $150 million term loans incurred in connection with the Vietnam acquisition on March 3, 2015, and the additional $240 million term loans and CHF 200 million 5.75% senior notes incurred on June 25, 2015 in connection with the Meritas acquisition.  The $515.0 million term loan and proceeds from our initial public offering were used to redeem 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.

 

64

----

Table of Contents

 

***Income Tax Expense***

 

Income tax expense decreased by $13.5 million, or 52.7%, from $25.7 million in fiscal 2014 to $12.2 million in fiscal 2015.  The decrease was primarily due to an increase in current tax expense of $0.4 million offset by a $13.9 million reduction in deferred tax expense from a charge of $3.7 million in fiscal 2014 compared to a credit of $10.2 million in fiscal 2015.

 

***Profit for the Year***

 

As a result of the foregoing, we made a profit in fiscal 2015 of $8.6 million compared to a loss of $90.4 million in fiscal 2014.

 

***Adjusted EBITDA***

 

Adjusted EBITDA increased by $6.3 million, or 5.0% (6.5% on a constant currency basis), from $127.4 million for fiscal 2014 to $133.7 million for fiscal 2015. Adjusted EBITDA in fiscal 2015 was negatively impacted from the timing of the acquisition of the six schools from Meritas and the inclusion of losses from our start-up schools in Aubonne and Dubai.  Excluding our loss making start-up schools which contributed revenue of $17.9 million, our Adjusted EBITDA in fiscal 2015 would have been $6.4 million higher at $140.1 million and our Adjusted EBITDA margin would have been 1.9% better at 25.1%.

 

***Adjusted Net Income***

 

Adjusted net income increased by $20.7 million, or 91.1%, from $22.8 million in fiscal 2014 to $43.5 million in fiscal 2015.  This improvement was primarily due to the increase in Adjusted EBITDA and a $16.6 million reduction in our net interest charge, partially offset by the timing of the Meritas acquisition which had a negative impact on operating profit.

 

**Year ended August 31, 2014 compared to year ended August 31, 2013**

 

***Revenue***

 

Revenue increased $150.9 million, or 46.6% (44.7% on a constant currency basis), from $323.7 million in fiscal 2013 to $474.6 million in fiscal 2014. The rise was due to increased revenue from our premium schools, partly offset by a decrease in other revenue.

 

Revenue from our premium schools increased $161.1 million, or 54.5% (51.9% on a constant currency basis), from $295.3 million in fiscal 2013 to $456.4 million in fiscal 2014. This increase was primarily due to increases in FTEs and tuition fees and the impact of the schools we acquired in Bangkok, Guangzhou, North America, Qatar and Spain in fiscal 2013 and Singapore and Cambodia in fiscal 2014. $39.1 million of our premium schools revenue in fiscal 2014 was attributable to the schools we acquired at the end of fiscal 2013 in Bangkok and Guangzhou and the schools we acquired during fiscal 2014 in Singapore and Cambodia.

 

Other revenue decreased $10.2 million, or 36.0%, from $28.4 million in fiscal 2013 to $18.2 million in fiscal 2014. This decrease was due to the completion of learning services contracts in Abu Dhabi, Saudi Arabia and Malaysia and reduced revenues from our remaining UK contracts.

 

***Cost of Sales***

 

Cost of sales increased $89.9 million, or 47.2% (45.1% on a constant currency basis), from $190.4 million in fiscal 2013 to $280.3 million in fiscal 2014. The increase was primarily due to increased direct costs associated with the number of teachers added as a result of the schools we acquired in Bangkok, Guangzhou, North America, Qatar, Spain, Singapore and Cambodia and the additional rent and depreciation with respect to those schools. This cost of sales increase was partly offset by the lower cost of sales associated with the reduced learning services contracts, which resulted in a reduction in the number of consultants we employed.

 

Adjusted cost of sales increased $66.8 million, or 45.3%, from $147.6 million in fiscal 2013 to $214.4 million in fiscal 2014.

 

***Gross Profit***

 

Gross profit increased $61.0 million, or 45.8%, from $133.3 million for the fiscal 2013 to $194.3 million in fiscal 2014, resulting in a gross profit margin of 41.2% for fiscal 2013 compared to 40.9% for fiscal 2014. Theimprovement in margin was largely due to the impact of tuition fee increases in excess of our cost inflation and increased enrollment within our existing schools.

 

Adjusted gross profit increased $84.1 million, or 47.7%, from $176.1 million in fiscal 2013 to $260.2 million in fiscal 2014, resulting in an adjusted gross profit margin of 54.4% in fiscal 2013 compared to 54.8% in fiscal 2014.

 

65

----

Table of Contents

 

***Selling, General and Administrative Expenses***

 

SGA expenses increased $28.4 million, or 44.0%, from $64.5 million for fiscal 2013 to $92.9 million for fiscal 2014. SGA expenses for both periods include charges for largely unrealized foreign exchange gains/losses, share-based payments and management fees. Adjusting for these items (see itemized adjustments in the Reconciliation of Adjusted Cost of Sales, Adjusted Gross Profit, EBITDA, Adjusted EBITDA and Adjusted Net Income table for relevant amounts), SGA expenses would have been $65.1 million for fiscal 2013 compared to $92.5 million in fiscal 2014, an increase of 42.1% and in line with the revenue increase of 46.6%.

 

***Depreciation & Amortization Expenses***

 

Depreciation expense increased $1.6 million, from $0.4 million in fiscal 2013 to $2.0 million in fiscal 2014 due to the impact of the acquisitions mentioned above.

 

Amortization expense on intangible assets increased $4.7 million, or 82.5%, from $5.7 million in fiscal 2013 compared to $10.4 million in fiscal 2014 due to the impact of the acquisitions mentioned above.

 

***Exceptional Expenses***

 

Exceptional expenses increased $82.5 million, or 466.1%, from $17.7 million in fiscal 2013 to $100.2 million in fiscal 2014. The charge of $100.2 million in fiscal 2014 reflects the impact of our IPO and refinancing completed in the third quarter, including charges of $89.9 million related to the redemption of our outstanding notes (including the release of $12.9 million of prepaid costs). We also incurred an exceptional charge of $2.5 million in connection with the transfer of our transactional banking and revolving credit facility from Barclays Bank PLC to The Hong Kong and Shanghai Bank in January 2014.

 

***Net Financing Expense***

 

Net financing expense increased $4.5 million, or 9.2%, from $49.0 million for fiscal 2013 to $53.5 million for fiscal 2014, due to the additional interest expense from the $165.0 million 10.25% senior secured notes issued on July 3, 2013 to refinance the WCL Group acquisition plus the full period impact of the issuance of our $150.0 million 8.50%/9.50% PIK toggle notes on February 8, 2013, partially offset by the reduced interest expense on the $515.0 million term loan facility following the completion of our IPO. The $515.0 million term loan and proceeds from our initial public offering were used to redeem 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.

 

***Income Tax Expense***

 

Income tax expense increased $6.4 million, or 33.1%, from $19.3 million in fiscal 2013 compared to $25.7 million in fiscal 2014, the increase primarily being due to the impact of higher profits in China.

 

***Loss for the Year***

 

As a result of the foregoing, our loss for the year increased from $23.3 million in fiscal 2013 to $90.4 million in fiscal 2014.

 

***Adjusted EBITDA***

 

Adjusted EBITDA increased by $47.9 million, or 60.3% (59.0% on a constant currency basis), from $79.5 million for fiscal 2013 to $127.4 million for fiscal 2014.

 

***Adjusted Net Income***

 

Adjusted net income increased $24.1 million from a loss of $1.3 million in fiscal 2013 to a profit of $22.8 million in fiscal 2014.

 

66

----

Table of Contents

 

B.                    Liquidity and Capital Resources

 

The following table sets forth certain information relating to our cash flows for fiscal 2013, 2014 and 2015:

 
| ** **                                                         | ** ** | **Year Ended August 31,** | ** ** |
|--------------------------------------------------------------------|------------|------------------------------------------|------------|
| **$ millions**                                                | ** ** | **2013**                                 | ** ** | **2014** | ** ** | **2015** | ** ** |
| Net cash   generated from/(used in) operating activities           |       | 12.3                                     |       | (42.7 | ) | 86.6 |   |
| Net cash used in   investing activities                            |       | (262.4                                   | )          | (87.3 | ) | (709.0 | ) |
| Net cash   generated from financing activities                     |       | 307.9                                    |       | 125.1 |   | 699.9 |   |
| Cash and cash   equivalents (end of period) (including overdrafts) |       | 171.1                                    |       | 166.2 |   | 226.3 |   |
| Cash and cash   equivalents (end of period) (excluding overdrafts) |       | 222.9                                    |       | 256.4 |   | 317.0 |   |

 

Our on-going operations require the availability of cash to service debt, fund working capital needs, fund maintenance and capacity-expansion capital expenditure and expenses associated with the acquisition of schools

 

We believe that our operating cash flows and available amounts under our senior secured revolving credit facility will be sufficient to fund our working capital requirements, anticipated capital expenditures and debt service requirements for the next twelve months.

 

*Net Cash generated from/(used in) Operating Activities*

 

Net cash generated from operating activities was $86.6 million, in fiscal 2015, compared to net cash used in operating activities of $42.7 million in fiscal 2014. The increase was due to a cash inflow from changes in working capital of $35.1 million compared to $23.3 million in fiscal 2014, decreased interest paid of $31.2 million in fiscal 2015 compared to $73.4 million in fiscal 2014, lower tax paid of $19.9 million in fiscal 2015 compared to $25.2 million in fiscal 2014 and the payment of financing related costs and commitment fees of $29.3 million in fiscal 2015 compared to bond redemption expenses paid of $77.0 million in fiscal 2014.

 

Net cash used in operating activities was $42.7 million in fiscal 2014, primarily due to an operating profit before tax and non-cash expenses of $109.6 million and a cash inflow from working capital changes of $23.3 million, offset by tax paid of $25.2 million, interest paid of $73.4 million and the payment of $77.0 million in make-whole premium on redemption of our notes.  This represents a decrease of $63.6 million from the $12.3 million net cash generated from operating activities in fiscal 2013.  The main reasons for the decrease was an increase in interest paid of $27.6 million and the payment of $77.0 million in make-whole premium on redemption of our notes.

 

Net cash generated from operating activities was $12.3 million in fiscal 2013, primarily due to an operating profit before tax and non-cash expenses of $65.4 million and a cash inflow from working capital changes of $18.2 million, offset by tax paid of $25.5 million and interest paid of $45.8 million. This represents a decrease of $39.4 million from the $51.7 million generated in fiscal 2012. The main reason for the deterioration in net cash generated from operations was an increase in interest paid of $39.0 million and an increase in tax paid of $9.6 million, partly offset by an increase in working capital inflows in fiscal 2013.

 

*Net Cash used in Investing Activities*

 

Net cash used in investing activities was $709.0 million in fiscal 2015, an increase of $621.7 million from $87.3 million in fiscal 2014. This was primarily due to the net cash used in the acquisition of four schools from BIS Vietnam ($105.6 million) and six schools from Meritas ($541.5 million) and capital expenditure of $62.3 million. Capital expenditure included the impact of the significant increase in the number of schools following our acquisitions in China, United States, Mexico, Switzerland, Vietnam and Cambodia as well as our new school in Chicago which opened in September 2015.

 

Net cash used in investing activities was $87.3 million in fiscal 2014. This was primarily due to the net cash used in the acquisition of our schools in Singapore ($15.5 million) and Cambodia ($14.9 million) and capital expenditure of $53.6 million. Capital expenditure included the impact of the significant increase in the number of schools following our acquisitions in Thailand, China, North America, Qatar, Spain, Singapore and Cambodia as well as the refurbishment expenditure on our school in Hong Kong and the costs of our new schools in Aubonne and Dubai, which opened in September 2014.

 

Net cash used in investing activities was $262.4 million in fiscal 2013. This was primarily due to the net cash used in the acquisition of the WCL Group ($107.0 million) and the schools in Guangzhou ($20.6 million) and Bangkok ($11.2 million). Additionally, as part of our acquisition of WCL Group, we repaid $98.2 million of WCL Group’s third-party bank debt and shareholder loan notes. Capital expenditure in the year was $23.9 million, an increase of $12.6 million over fiscal 2012. This increase reflects expansion projects in our China, Central European and Houston premium schools as well as the significant increase in the size of the premium schools estate.

 

67

----

Table of Contents

 

*Net Cash generated from Financing Activities*

 

Net cash from financing activities was $699.9 million in fiscal 2015. The inflow was primarily from the proceeds of the issuance of share capital ($126.2 million), the issuance of our 5.75% senior secured notes ($217.7 million) and the increase in our term loan facilities during fiscal 2015 ($390.0 million) offset by repayment of our revolving credit facility ($20.0 million) and repayments on our term loan facilities ($6.5 million).

 

Net cash from financing activities was $125.1 million in fiscal 2014. The inflow was primarily due to the IPO proceeds net of fees and expenses of $320.0 million and the draw-down of our new $515.0 million senior secured term loan in March 2014 offset by repayment of the notes of $640.0 million and the payment of $63.5 million to redeem preference shares and deferred shares on completion of the IPO.

 

Net cash from financing activities was $307.9 million in fiscal 2013. This was primarily due to proceeds of $140.0 million from the issue of share capital to fund the acquisition of WCL Group and the issuance of our $150.0 million of 8.50%/9.50% PIK Toggle Notes due 2018. In addition, Nord Anglia Education (UK) Holdings plc issued a further $165.0 million of 10.25% senior secured notes due 2017 to partially finance the acquisition of WCL Group and our premium schools in Bangkok and Guangzhou.

 

**Borrowings**

The following table sets forth the carrying value of our outstanding long-term debt as of August 31, 2015.

 
| ** **                   | ** ** | **August 31, 2015**               | ** ** |
|------------------------------|------------|---------------------------------------------|------------|
| ** **                   | ** ** | **(in millions of dollars)** | ** ** |
| Bank overdraft               |       | 90.7                                        |       |
| Term Loan                    |       | 872.8                                       |       |
| Revolving Credit   Facility  |       | 0.2                                         |       |
| 5.75% Senior   Secured Notes |       | 200.9                                       |       |
| **Total   debt**             |       | **1,164.6**                                 |       |
| Less current   maturities    |       | 98.3                                        |       |
| **Long-term   debt**         |       | **1,066.3**                                 |       |

 

On March 2, 2015, we incurred an incremental $150.0 million principal amount of term loan pursuant to an amendment of our senior secured credit facilities. $112.2 million of the amount borrowed was used to partially fund our acquisition of BIS Vietnam.

 

On June 25, 2015, we incurred incremental term loans of $240 million pursuant to an amendment and restatement of our senior secured credit facilities.  Term loans under our amended and restated senior secured credit facilities bear interest based on LIBOR (subject to a 1.00% interest rate floor) plus a margin percentage of 4.00% per annum, with a step down to 3.75% per annum if total net leverage ratio is less than or equal to 4.5x.  Revolving loans bear interest at LIBOR plus a margin ranging from 2.75% to 3.75% (currently 3.75%) depending on our total net leverage ratio as set forth below:

 
| **Total Net Leverage Ratio** | ** ** | **Applicable Margin** | ** ** |
|---------------------------------------------|------------|----------------------------|------------|
| > 4.50:1.00                              |       | 3.75%                      |       |
| <   4.50:1.00   > 3.50:1.00           |       | 3.50%                      |       |
| <   3.50:1.00   > 3.00:1.00           |       | 3.25%                      |       |
| <   3.00:1.00   > 2.50:1.00           |       | 3.00%                      |       |
| <   2.50:1.00                            |       | 2.75%                      |       |

 

On June 25, 2015, we issued CHF200 million in aggregate principal amount of 5.750% senior secured notes due 2022. The issuer of the notes and the borrower under the senior secured credit facilities is a U.S. domestic limited liability company wholly owned by us.  The notes and the borrowings under our senior secured credit facilities are guaranteed by us and certain of our subsidiaries and are secured by collateral primarily consisting of share pledges and security interests in assets of certain subsidiaries.  The collateral is shared between holders of the notes and lenders under our senior secured credit facilities on an equal and ratable basis.

 

68

----

Table of Contents

 

At any time prior to July 15, 2018, we may, subject to certain exceptions, on any one or more occasions, redeem up to 35% of the aggregate principal amount of the notes at a redemption price of 105.750 % of their principal amount, plus accrued and unpaid interest to the redemption date, with the net proceeds of certain equity offerings.

 

At any time prior to July 15, 2018, we may, on any one or more occasions, at our option redeem all or part of the notes, at a redemption price equal to 100% of the principal amount of the notes, plus an applicable redemption premium and accrued and unpaid interest to the redemption date.

 

At any time on or after July 15, 2018 and prior to maturity, we may on any one or more occasions at our option redeem all or part of the notes, subject to certain conditions, at the redemption prices set forth below, plus accrued and unpaid interest to the redemption date.

 
| **Year**            | ** ** | **Redemption Price** | ** ** |
|---------------------|------------|---------------------------|------------|
| 2018                |       | 102.875%                  |       |
| 2019                |       | 101.438%                  |       |
| 2020 and thereafter |       | 100.000%                  |       |

 

We may redeem all, but not less than all, of the notes at a redemption price equal to 100% of the principal amount of the notes outstanding plus accrued and unpaid interest upon the occurrence of certain changes in applicable tax law.

 

For purposes of the indenture governing the notes, the below sets forth the calculations of our “Consolidated EBITDA” and “Consolidated Interest Expense” (each as defined in the indenture) for the four quarters ended August 31, 2015, after giving effect on a pro forma basis to acquisitions and related financings that occurred since May 1, 2014:

 
| **$ millions**                                                           | ** ** | **Twelve Months Ended   August 31, 2015** | ** ** |
|-------------------------------------------------------------------------------|------------|---------------------------------------------------------------|------------|
|                                                                          |       |                                                          |       |
| **Adjusted   EBITDA**                                                         |       | **133.7**                                                     |       |
| Interest Income                                                               |       | 2.8                                                           |       |
| **Consolidated   EBITDA**                                                     |       | **136.5**                                                     |       |
| Full year impact   of acquisitions and synergies(1)                           |       | 75.1                                                          |       |
| **Consolidated   EBITDA (adjusted for the full year impact of acquisitions)** |       | **211.6**                                                     |       |
| Consolidated   Interest Expense (on a pro forma basis)(2)                     |       | 67.4                                                          |       |

 

----

(1)                                 Incorporates the full twelve-month period historical financial results of our schools in Vietnam and the Meritas Schools and estimated cost synergies in connection with the Meritas Schools acquisition.

 

(2)                                 Gives effect to incremental loans of $390 million under our senior secured credit facilities and our CHF200 million senior secured notes, which financed our acquisition of BIS Vietnam and the Meritas schools, as if they were incurred on September 1, 2014.

 

Our senior secured credit facilities and the indenture governing the notes contain a number of covenants that, among other things and subject to certain exceptions, may restrict our ability to:

 

·      incur additional debt;

 

·      pay dividends or make other distributions or repurchase or redeem our shares;

 

·      make investments; sell assets, including capital stock of subsidiaries;

 

·      enter into agreements restricting our subsidiaries’ ability to pay dividends;

 

·      consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

 

·      enter into sale and leaseback transactions;

 

·      enter into transactions with our affiliates; and

 

·      incur liens.

 

In addition, the credit agreement requires us to maintain a pro forma net leverage ratio of not greater than 5.25:1.00 if the sum of our (i) revolving loans and (ii) letter of credit/bank guarantee usage in excess of $20.0 million exceeds 30% of our aggregate revolving commitments.

 

The credit agreement and indenture also contain customary events of default and the credit agreement contains customary affirmative covenants.

 

69

----

Table of Contents

 

**Capital Expenditures**

 

Our capital expenditures were $23.9 million, $53.6 million and $62.3 million in fiscal 2013, 2014 and 2015 respectively. Our capital expenditures were primarily related to capacity expansion and maintenance. Our maintenance capital expenditures were $10.8 million, $14.0 million and $18.7 million in fiscal 2013, 2014 and 2015, respectively. We fund our capital expenditures primarily by cash generated from our operations, sale of shares, borrowings from commercial banks and the issuance of debt securities. We expect to fund future capital expenditures primarily by cash generated from operating and financing activities.

 

C.                                                                 Research and Development, Patents and Licenses, Etc.

 

We do not conduct research and development activities.

 

D.                                                                 Trend Information

 

Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events since August 31, 2015 that are reasonably likely to have a material adverse effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

 

E.                                                                  Off-Balance Sheet Arrangements

 

We do not have any material off-balance sheet arrangements. We are sometimes required to provide bid or performance bank guarantees on certain of our learning service contracts. These bank guarantees provide legal evidence of our liability to our client or financial institution acting on their behalf, so that if we should default, the third party can require payment directly from the bank and we would be liable for the debt. As of August 31, 2015, we had $10.6 million in such guarantees.

 

F.                                                                   Contractual Obligations

 

The following table sets forth our contractual obligations and commercial commitments as of August 31, 2015:

 
| **Contractual Obligations   (in millions of dollars)** | ** ** | **Total**   | ** ** | **Less than   1 year** | ** ** | **1 — 3   years** | ** ** | **3 — 5   years** | ** ** | **More than   5 years** | ** ** |
|----------------------------------------------------------------------------|------------|-------------|------------|----------------------------------|------------|----------------------------------|------------|----------------------------------|------------|-----------------------------------|------------|
|                                                                       |       |        |       |                             |       |                             |       |                             |       |                              |       |
| **Long-Term   Debt Obligations**                                           |       | 1,066.2     |       | 7.3                              |       | 7.0                              |       | 5.9                              |       | 1,046.0                           |       |
| **Operating   Lease Obligations**                                          |       | 1,118.2     |       | 68.0                             |       | 123.4                            |       | 123.4                            |       | 803.4                             |       |
| **Purchase   Obligations**(1)                                    |       | 25.4        |       | 25.4                             |       | —                           |       | —                           |       | —                            |       |
| **Other   Long-Term Liabilities**(2)                             |       | 79.1        |       | 11.0                             |       | 20.9                             |       | 0.7                              |       | 46.5                              |       |
| **Total**                                                                  |       | **2,288.9** |       | **111.7**                        |       | **151.3**                        |       | **130.0**                        |       | **1,895.9**                       |       |

 

----

(1)                                 Purchase obligations represent committed purchases for services or goods that have not been received as at August 31, 2015, primarily fixed asset purchases at our schools in Warsaw, Madrid and Geneva.

 

(2)                                 Primarily relates to deferred consideration for Northbridge International School Cambodia and our four schools in Vietnam and finance leases.

 

Except as disclosed above and in Note 26 to our audited consolidated financial statements as of and for the year ended August 31, 2015 included elsewhere in this annual report, as of August 31, 2015, we did not have any material contingent liabilities or guarantees.

 

G.                                                                 Safe Harbor

 

See the section entitled “Forward-Looking Statements” at the beginning of this annual report.

 

70

----

Table of Contents

 

**Item 6.**                                           **Directors, Senior Management and Employees**

 

A.                                                                 Directors and Senior Management

 

The following table sets forth information regarding our executive officers and directors as of the date of this annual report.

 

| **Name**              | ** ** | **Age** | ** ** | **Position/Title**                   |
|-----------------------|------------|---------|------------|--------------------------------------|
| *Directors*           |       |    |       |                                 |
| Alan Kelsey           |       | 66      |       | Chairman                             |
| Andrew Fitzmaurice    |       | 55      |       | Chief Executive Officer and Director |
| Graeme Halder         |       | 52      |       | Chief Financial Officer and Director |
| Jack Hennessy         |       | 46      |       | Director                             |
| Kosmas Kalliarekos    |       | 50      |       | Director                             |
| Carlos Watson         |       | 46      |       | Director                             |
| Nicholas Baird        |       | 53      |       | Director                             |
|                  |       |    |       |                                 |
| *Executive Officers*  |       |    |       |                                 |
| Philippe Lagger       |       | 47      |       | Corporate Development Director       |
| Nicola Duggan Redfern |       | 46      |       | Group Human Resources Director       |

 

**Alan Kelsey** has served as a member of our board of directors since November 2003 and became the chairman in January 2005.  Prior to joining us, Mr. Kelsey had more than 30 years’ experience in the investment banking industry and commerce.  Mr. Kelsey was the group corporate development director at National Express Group PLC, where he served as one of three executive directors between 1996 and 1998.  Also, Mr. Kelsey served as the senior independent director at PD Ports PLC (2004 to 2006) and at Stobart Group Ltd. (2011 to 2013).  In March 2013 he was appointed Chairman of Explore Learning.  Mr. Kelsey has a BA and MA from Oxford University and is a fellow of the Institute of Logistics and Transport.  In addition, Mr. Kelsey is a trustee of the Prince’s Teaching Institute.

 

**Andrew Fitzmaurice** has served as our chief executive officer and as a member of our board since April 2003.  From March 2000 until March 2003, Mr. Fitzmaurice served as chief executive officer of easyCar.com, an international online automobile rental company.  Prior to his tenure at easyCar.com, Mr. Fitzmaurice spent 13 years at TNT Express UK where he served in a variety of positions, including as division managing director.  Mr. Fitzmaurice graduated from the University of Wales Cardiff, Magna Cum Laude, with a degree in economics.

 

**Graeme Halder** has served as our chief financial officer since October 2010.  Mr. Halder has more than 20 years’ experience serving as a director and chief financial officer of both privately held and publicly listed companies with turnover ranging from $75 million to $3 billion in sectors including hospitality and leisure, retail and security services.  Prior to joining us, Mr. Halder was the interim chief financial officer of Camco International, an AIM listed company with operations in China, Southeast Asia, Russia, Africa and the United States.  For four years, Mr. Halder served as chief financial officer of Command Security Corporation, a NASDAQ quoted company with offices throughout the US. Mr. Halder has been an Associate Chartered Accountant since 1987.

 

**Jack Hennessy** has served as a member of our board of directors since August 2008.  Since January 2001, Mr. Hennessy has served as a managing director of Baring Private Equity Asia Pte. Ltd. and also serves as a member of the investment committee and portfolio management committee of Baring Private Equity Asia Group Limited.  Mr. Hennessy serves on the board of directors of various companies, including Courts Asia Limited and Hexaware Technologies Limited.  Mr. Hennessy graduated from Monash University in Australia with degrees in engineering and science and received an M.B.A. from INSEAD.

 

**Kosmas Kalliarekos** has served as a member of our board of directors since August 2008.  Since 2008, Mr. Kalliarekos has served as a managing director of Baring Private Equity Asia Limited and also serves as a member of the portfolio management committee of Baring Private Equity Asia Group Limited.  Prior to joining Baring Private Equity Asia Limited, Mr. Kalliarekos was a founding member, senior partner and member of the executive committee of The Parthenon Group LLC, a global consulting firm, where he founded and headed the Global Education Industry Center of Excellence.  Mr. Kalliarekos serves on the board of directors of various companies, including Hexaware Technologies Limited.  Mr. Kalliarekos graduated from The Wharton School of Business at the University of Pennsylvania and received an M.B.A. with high distinction from Harvard Business School.

 

71

----

Table of Contents

 

**Carlos Watson** has served as a member of our board of directors since March 2014.  Mr. Watson is the founder and CEO of Ozymandias (“Ozy”), a digital news and culture magazine launched in September 2013.  From 2010 to 2012, Mr. Watson served as Managing Director in the investment banking division of The Goldman Sachs Group, Inc., where he focused on media and for-profit education companies.  Prior to joining Goldman Sachs, from 1995 to 1997, Mr. Watson worked as a consultant at McKinsey & Company, where he advised a wide range of Fortune 500 companies.  In 1997, Mr. Watson founded a successful venture-backed education company, Achieva College Prep Services, which he sold to The Washington Post Co.’s Kaplan education division in 2002.  Mr. Watson has also had a distinguished media career, serving as an anchor and analyst for CNN and MSNBC.  Mr. Watson won an Emmy Award in 2007 for his television interview specials.  Mr. Watson graduated cum laude from Harvard University with an A.B. in government and cum laude from Stanford Law School with a Juris Doctor degree.

 

**Nicholas Baird** has served as a member of our board of directors since April 2015. Mr. Baird has been Group Corporate Affairs Director of Centrica plc since March 2014. Before this, he had a long and varied career in Government. He was CEO of UK Trade and Investment, the UK government department that supports British exporters and foreign companies looking to invest in the UK, from June 2011 to December 2013. Previously, Mr. Baird was the Director General in the Foreign and Commonwealth Office leading its work on Europe, the Global Economy and Consular issues (2009-11) and the British Ambassador to Turkey (2006-2009). Mr. Baird speaks Arabic, French, German and Turkish.

 

**Philippe Lagger** has served as our Corporate Development Director since January 2010.  Mr. Lagger joined Nord Anglia Education in September 2009 as Managing Director for Collège Champittet.  Prior to that, from January 2006 to June 2009 he was Investment Director with the private equity firm Lydian Capital, where he generated and led initiatives in the education, food and leisure sectors.  Mr. Lagger started his career in Ciba Specialty Chemicals in Switzerland and India and then became a member of the Tetra Laval Group’s M&A team from February 2000 to December 2005.  Mr. Lagger earned an MSc from the Swiss Federal Institute of Technology and an MBA from the International Institute for Management Development in Lausanne, Switzerland.

 

**Nicola Duggan Redfern** has served Nord Anglia Education since January 30, 2012.  In her role as Group Human Resources Director, based in Hong Kong, Ms. Duggan Redfern is responsible for leading the development, implementation of our human resources strategies across the group.  Prior to joining us, Ms. Duggan Redfern worked for HSBC as the Regional Finance Head of Organization Development, working with a community of 2,500 across 22 countries in the Asia Pacific region, as well as the global lead on a number of “people change” projects for the group.  Prior to that Ms. Duggan Redfern was the Human Resources Director of a creative arts tertiary institute in Singapore, the ASEAN recruitment lead for IBM, Singapore, and held numerous HR-related roles with Flight Centre in their head office in Brisbane, Australia.  Ms. Duggan Redfern graduated with a BSc (Hons) degree in Psychology from the University of Stirling, Scotland.

 

The business address for each of our executive officers and directors is Level 12, St. George’s Building, 2 Ice House Street, Central, Hong Kong.

 

**Employment Agreements**

 

We have entered into employment agreements with our senior executive officers.  Under these employment agreements, each of our executive officers is employed until either we terminate, on three to 12 months’ notice, or the executive officer terminates, on either three or six months’ notice, such employment.  We may terminate the employment for cause, at any time, without notice or remuneration, for certain acts of the executive officer, including but not limited to gross misconduct, gross incompetence or willful neglect in the discharge of the executive officer’s duties, a conviction for certain crimes or certain acts of dishonesty or fraud.  These agreements do not provide for any special termination benefits, nor do we have other arrangements with these executive officers for special termination benefits.

 

Each executive officer has agreed to hold, both during and after the employment agreement is earlier terminated, in strict confidence and not to use, except as required in the performance of his duties in connection with the employment, any confidential information, trade secrets, technical data and know-how of our company or the confidential information of any third party, received by us.  In addition, each executive officer has agreed to be bound by non-competition restrictions set forth in his or her employment agreement.  Specifically, each executive officer has agreed not to, for a period of either three or six months following the termination of the employment agreement, (i) carry on or be employed, engaged, concerned or interested in any business in direct competition with our business and with which the executive officer was involved in the course of employment with us during the 12 months preceding termination; (ii) negotiate with, solicit business from or endeavor to entice away from us, any person or entity who to the executive officer’s knowledge has been our customer, client, agent or supplier or in the habit of dealing with us within 12 months prior to such executive officer’s termination of employment; (iii) undertake to provide in competition with us services similar to those with which the executive officer was concerned during the 12 months prior to termination to any of our customers, clients, agents or suppliers during the 12 months prior to termination with whom the executive officer had dealings; (iv) solicit, interfere with, tender for or endeavor to entice away from us any contract, project or business in which the executive officer had dealings during the 12 months prior to termination; or (v) interfere with, solicit or endeavor to entice away from us, any senior management within 12 months prior to termination of employment with whom the executive officer had dealings during the 12 months prior to termination.

 

72

----

Table of Contents

 

B.                                                                      Compensation

 

For the fiscal year ended August 31, 2015, we paid an aggregate of approximately $6.7 million in cash to our directors and executive officers. Total compensation for our directors and executive officers was $8.2 million.  The total amount set aside or accrued by us to provide pension, retirement or similar benefits to our directors and our executive management employees with respect to the year ended August 31, 2015 was $0.0 million.

 

We have established a discretionary bonus plan which enables the compensation committee to grant cash bonus payments to employees and executive officers based on the attainment of financial or operational objectives as well as individual performance and development objectives.  Directors, other than Mr. Andrew Fitzmaurice, who participates in his capacity as Chief Executive Officer, and Mr. Graeme Halder, who participates in his capacity as Chief Financial Officer, are excluded from this plan.  The discretionary bonus plan is administered by, and any bonus payments are made at the sole discretion of, the compensation committee.

 

Our directors and shareholders have authorized our 2014 Equity Incentive Award Plan, which provides for the issuance of up to 9,800,000 of our ordinary shares, of which 6,967,194 shares remain available for issuance as of December 24, 2015.  The following table summarizes the awards that we granted to our directors and executive officers during the fiscal year ended August 31, 2015:

 
| ** **                             | ** ** | **Number of   Shares   Covered by   Award** | ** ** | **Aggregate   Purchase Price** | ** ** | **Exercise Price** | ** ** | **Expiration Date** | ** **           |
|----------------------------------------|------------|-------------------------------------------------------|------------|-------------------------------------|------------|-------------------------|------------|--------------------------|----------------------|
| **Directors   and Executive Officers** |       |                                                  |       |                                |       |                    |       |                     |                 |
| Restricted share   units               |       | 9,856                                                 |       | N/A                                 |       | N/A                     |       | N/A                      |                 |
| Options                                |       | 224,100                                               |       | N/A                                 |       | $                       | 19.57      |                     | January 8, 2025 |   |
|                                        |            |                                                       |            |                                     |            |                         |            |                          |                      |  |

 

The following table summarizes the outstanding awards as of December 24, 2015 that we granted to our directors and executive officers and other individuals as a group:

 
| **  **                             | ** ** | **Number of   Shares   Covered by   Award** | ** ** | **Aggregate   Purchase Price** | ** ** | **Exercise Price** | ** ** | **Expiration Date** | ** **              |
|----------------------------------------------|------------|-------------------------------------------------------|------------|-------------------------------------|------------|-------------------------|------------|--------------------------|-------------------------|
| **Directors   and Executive Officers**       |       |                                                  |       |                                |       |                    |       |                     |                    |
| Restricted share   units                     |       | 8,162                                                 |       | N/A                                 |       | N/A                     |       | N/A                      |                    |
|                                         |       |                                                  |       |                                |       |                    |       |                     |                    |
| Restricted   shares                          |       | 9,234                                                 |       | $                                   | 5,000      |                    | N/A        |                     | N/A                     |   |
|                                         |       | 9,291                                                 |       | $                                   | 92.91      |                    | N/A        |                     | N/A                     |   |
|                                         |       |                                                  |       |                                |       |                    |       |                     |                    |
| Options                                      |       | 197,800                                               |       | N/A                                 |       | $                       | 18.00      |                     | May 30, 2024       |   |
|                                         |       | 224,100                                               |       | N/A                                 |       | $                       | 19.57      |                     | January 8, 2025    |   |
|                                         |       | 349,300                                               |       | N/A                                 |       | $                       | 20.87      |                     | September 23, 2025 |   |
|                                         |       | 50,300                                                |       | N/A                                 |       | $                       | 19.60      |                     | October 29, 2025   |   |
|                                         |       |                                                  |       |                                |       |                    |       |                     |                    |
| Performance   Share Units                    |       | 715,405                                               |       | N/A                                 |       | N/A                     |       | N/A                      |                    |
|                                         |       |                                                  |       |                                |       |                    |       |                     |                    |
| **All   other Plan Participants as a Group** |       |                                                  |       |                                |       |                    |       |                     |                    |
| Options                                      |       | 169,100                                               |       | N/A                                 |       | $                       | 18.00      |                     | May 30, 2024       |   |
|                                         |       | 23,100                                                |       | N/A                                 |       | $                       | 19.58      |                     | July 14, 2024      |   |
|                                         |       | 247,100                                               |       | N/A                                 |       | $                       | 19.57      |                     | January 8, 2025    |   |
|                                         |       | 361,200                                               |       | N/A                                 |       | $                       | 20.87      |                     | September 23, 2015 |   |
|                                         |       | 12,600                                                |       | N/A                                 |       | $                       | 19.60      |                     | October 29, 2025   |   |
|                                         |       |                                                  |       |                                |       |                    |       |                     |                    |
| Performance   Share Units                    |       | 424,695                                               |       | N/A                                 |       | N/A                     |       | N/A                      |                    |

 

73

----

Table of Contents

*** ***

***2014 Equity Incentive Award Plan***

 

We have adopted the Nord Anglia Education, Inc. 2014 Equity Incentive Award Plan (the “2014 Incentive Plan”).  The purpose of the 2014 Incentive Plan is to promote our success and enhance our value by linking the individual interests of our non-employee directors, employees and consultants to those of our shareholders by providing such individuals with an incentive for outstanding performance to generate superior returns to our shareholders.  The 2014 Incentive Plan is also intended to provide us flexibility in our ability to motivate, attract, and retain the services of non-employee directors, employees and consultants upon whose judgment, interest and special effort we are largely dependent.  The principal features of the 2014 Incentive Plan are summarized below.

 

*Share Reserve and Award Limits*

 

Under the 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.  Such maximums will not, however, apply to the extent that the deduction limitation set forth in Section 162(m) of the Internal Revenue Code of 1986 does not apply to us (because we are a foreign private issuer, are exempt under Section 162(m) transition rules or otherwise).  In addition to the foregoing limits, no non-employee director will be granted awards pursuant to the 2014 Incentive Plan with an aggregate value (determined as of the date of grant under applicable accounting standards) in excess of $5.0 million during any fiscal year.

 

*Types of Awards*

 

The types of awards we may grant under the 2014 Incentive Plan include the options to purchase our ordinary shares at a specified price and in a specified period determined by our compensation committee.  Under the 2014 Incentive Plan, we may also grant awards of our (1) restricted shares, (2) restricted share units, (3) performance awards, (4) dividend equivalents, (5) share payments, (6) deferred shares, (7) deferred share units and (8) share appreciation rights, under the terms and conditions determined by our compensation committee.

 

·                  *Share Options* will provide for the right to purchase our ordinary shares at a specified price which, except as otherwise determined by the administrator, shall not be less than fair market value on the date of grant, and usually will become exercisable (at the discretion of the administrator) in one or more installments after the grant date, subject to the participant’s continued employment or service with us and/or subject to the satisfaction of corporate performance targets and individual performance targets established by the administrator.  The 2014 Incentive Plan provides that share options may be granted for any term specified by the administrator that does not exceed ten (10) years.  To the extent the share options are governed by US tax laws, the share options may be either “non-qualified share options” or “incentive share options.” Incentive share options (“ISOs”) will be designed in a manner intended to comply with the provisions of Section 422 of the Internal Revenue Code of 1986 and will be subject to specified restrictions contained in the Internal Revenue Code of 1986.  Among such restrictions, ISOs will have an exercise price of not less than the fair market value of an ordinary share on the date of grant, will only be granted to employees, and will not be exercisable after a period of ten (10) years measured from the date of grant.  In the case of an ISO granted to an individual who owns (or is deemed to own) at least 10% of the total combined voting power of all classes of our capital stock, the 2014 Incentive Plan provides that the exercise price must be at least 110% of the fair market value of an ordinary share on the date of grant and that the ISO must not be exercisable after a period of five (5) years measured from the date of grant.

 

·                  *Restricted Shares* may be granted to any eligible individual selected by the administrator and will be made subject to such restrictions as may be determined by the administrator.  Restricted shares, typically, will be forfeited for no consideration or repurchased by us at the original purchase price if the conditions or restrictions on vesting are not met.  The 2014 Incentive Plan provides that restricted shares generally may not be sold or otherwise transferred until restrictions are removed or expire.  Recipients of restricted shares, unlike recipients of share options, will have voting rights and will generally have the right to receive dividends, if any, prior to the time when the restrictions lapse; however, in the sole discretion of the administrator, any extraordinary dividends will not be released until restrictions are removed or expire.

 

·                  *Restricted Share Units* may be awarded to any eligible individual selected by the administrator, typically without payment of consideration, but subject to vesting conditions based on continued employment or service or on performance criteria established by the administrator.  The 2014 Incentive Plan provides that, like restricted shares, restricted share units may not be sold, or otherwise transferred or hypothecated, until vesting conditions are removed or expire.  Unlike restricted shares, ordinary shares underlying restricted share units will not be issued until the restricted share units have vested, and recipients of restricted share units generally will have no voting or dividend rights prior to the time when vesting conditions are satisfied and the ordinary shares are released.

 

74

----

Table of Contents

 

·                  *Performance Awards* (including performance share units and performance cash bonuses) may be granted by the administrator in its discretion to any eligible individual, and may include, without limitation, restricted shares the restrictions with respect to which lapse upon the attainment of specified performance goals, restricted share units that vest and become payable upon the attainment of specified performance goals, share bonus awards that become payable upon the attainment of specified performance goals and other performance awards that vest or become exercisable or payable upon the attainment of one or more specified performance goals.  The value of performance awards, including performance share units, may be linked to any one or more specified performance criteria or other specific criteria determined by the administrator, in each case on a specified date or dates or over any period or periods and in such amounts as may be determined by the administrator.  Performance awards, including performance share unit awards, may be paid in cash or in ordinary shares or in a combination of cash and ordinary shares.

 

·                  *Dividend Equivalents* will represent the value of the dividends, if any, per ordinary share paid by us, calculated with reference to the number of ordinary shares covered by the award.  The 2014 Incentive Plan provides that dividend equivalents may be settled in cash or ordinary shares and at such times as determined by the administrator.

 

·                  *Share Payments* will be payments made to eligible individuals as authorized by the administrator in its discretion in the form of ordinary shares or an option or other right to purchase ordinary shares, and may be made as part of a deferred compensation or other arrangement in lieu of all or any part of compensation, including bonuses, that would otherwise be payable in cash to such eligible individual, and may be subject to a vesting schedule, including vesting upon the attainment of performance criteria, in which case the share payment will not be made until the vesting criteria have been satisfied.

 

·                  *Deferred Share Awards* will represent the right to receive ordinary shares on a future date.  The 2014 Incentive Plan provides that deferred shares may not be sold or otherwise hypothecated or transferred until issued.  Deferred shares will not be issued until the deferred share award has vested, and recipients of deferred shares generally will have no voting or dividend rights prior to the time when the vesting conditions are satisfied and the ordinary shares are issued.  Deferred share awards generally will be forfeited, and the underlying ordinary shares will not be issued, if the applicable vesting conditions and other restrictions are not met.

 

·                  *Deferred Share Unit Awards* will be awarded to any eligible individual selected by the administrator, typically without payment of consideration, but may be subject to vesting conditions based on continued employment or service or on performance criteria established by the administrator.  Each deferred share unit shall entitle the holder thereof to receive one ordinary share on the date the deferred share unit becomes vested or upon a specified settlement date thereafter.  The 2014 Incentive Plan provides that, like deferred shares, deferred share units may not be sold, or otherwise transferred or hypothecated, until vesting conditions are removed or expire.  Unlike deferred shares, deferred share units may provide that ordinary shares underlying the deferred share units will not be issued until a specified date or event following the vesting date.  Recipients of deferred share units generally will have no voting or dividend rights prior to the time when vesting conditions are satisfied and the ordinary shares underlying the award have been issued to the holder.

 

·                  *Share Appreciation Rights* (“SARs”) may be granted in the administrator’s discretion in connection with share options or other awards, or separately.  SARs granted in connection with share options or other awards typically will provide for payments to the holder based upon increases in the price of our ordinary shares over a set exercise price.  The exercise price of any SAR granted under the 2014 Incentive Plan generally will be at least 100% of the fair market value of a share of our common stock on the date of grant.  There are no restrictions specified in the 2014 Incentive Plan on the exercise of SARs or the amount of gain realizable therefrom, although the 2014 Incentive Plan provides that restrictions may be imposed by the administrator in the SAR agreements.  SARs granted under the 2014 Incentive Plan will be settled in cash or ordinary shares, or in a combination of both, at the election of the administrator.

 

75

----

Table of Contents

 

*Eligibility*

 

The 2014 Incentive Plan provides that awards may be granted to individuals who will then be our non-employee directors, employees or consultants or the non-employee directors, employees or consultants of certain of our subsidiaries; provided, however, that in the United Kingdom awards may be granted only to employees of our company or subsidiaries.

 

*Plan Administration*

 

The compensation committee of our board of directors (or other committee as our board of directors may appoint) administers the 2014 Incentive Plan unless our board of directors assumes authority for administration.  Notwithstanding the foregoing, our full board of directors acting by a majority of its members in office conducts the general administration of the 2014 Incentive Plan with respect to awards granted to non-employee directors.  The committee (or board of directors with respect to awards granted to non-employee directors) determines the terms and conditions of each grant, including but not limited to, the exercise, grant or purchase prices, any performance criteria, any reload provision, any restrictions or limitations on the awards, vesting schedules, lapse of forfeiture restrictions or restrictions on the exercisability of the awards, any acceleration or waivers thereof, and any provision related to non-competition and recapture of gain on the awards.

 

*Award Agreements*

 

Awards granted under the 2014 Incentive Plan are evidenced by award agreements that set forth the terms, conditions and limitations for each award.  Share awards may be evidenced by way of an issuance of certificates or book entries with appropriate legends.  The certificates and book entry procedures may be subject to counsel’s advice, stop-transfer orders or other conditions or restrictions where the plan administrator deems necessary to comply with the required laws and regulations.

 

*Transfer Restrictions*

 

The 2014 Incentive Plan generally provides that awards granted under the 2014 Incentive Plan may not be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the administrator, pursuant to a domestic relations order as defined by the Internal Revenue Code of 1986 or Title I of the Employee Retirement Income Security Act of 1974 or similar non-US law, unless and until such award has been exercised, or the shares underlying such award have been issued, and all restrictions applicable to such shares have lapsed.

 

*Forfeiture and Claw-Back Provisions*

 

The 2014 Incentive Plan provides that the administrator has the right to provide, in an award agreement or otherwise, or to require a holder to agree by separate written or electronic instrument, that:  (1) (a) any proceeds, gains or other economic benefit actually or constructively received by the holder upon any receipt or exercise of the award, or upon the receipt or resale of any shares underlying the award, must be paid to the company, and (b) the award will terminate and any unexercised portion of the award (whether or not vested) will be forfeited, if (i) a termination of service occurs prior to a specified date, or within a specified time period following receipt or exercise of the award, or (ii) the holder at any time, or during a specified time period, engages in any activity in competition with us, or which is inimical, contrary or harmful to our interests, as further defined by the administrator or (iii) the holder incurs a termination of service for “cause” (as such term is defined in the sole discretion of the administrator, or as set forth in a written agreement relating to such award between us and the holder); and (2) all awards (including any proceeds, gains or other economic benefit actually or constructively received by the holder upon any receipt or exercise of any award or upon the receipt or resale of any shares underlying the award) will be subject to the provisions of any claw-back policy implemented by us, including, without limitation, any claw-back policy adopted to comply with the requirements of any applicable law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable award agreement.

 

*Amendments or Termination*

 

The 2014 Incentive Plan provides that our board of directors or the compensation committee, as applicable, may terminate, amend or modify the 2014 Incentive Plan at any time and from time to time.  However, the 2014 Incentive Plan generally requires us to obtain shareholder approval to the extent required by applicable law, rule or regulation (including any applicable stock exchange requirement), including in connection with any amendments to increase the number of shares available under the 2014 Incentive Plan (other than in connection with certain corporate events, as described below).

 

76

----

Table of Contents

 

The 2014 Incentive Plan provides that in the event of any changes affecting our ordinary shares or the price of our ordinary shares, the plan administrator may make proportionate and equitable adjustments to reflect such changes.  Upon or in anticipation of a corporate transaction, including acquisition, disposal of substantially all or all assets, reverse takeover or dissolution or any other unusual or nonrecurring transaction or event, the plan administrator may, in its discretion, provide for the termination, replacement or assumption of awards granted under the 2014 Incentive Plan, make adjustments in the aggregate number and type of shares subject to the 2014 Incentive Plan or to the terms and conditions, including grant or exercise price or performance criteria applicable to awards outstanding on the date of such change to prevent dilution or enlargement of potential benefits intended to be available thereunder, or provide that the awards become exercisable, payable or fully vested.  The 2014 Incentive Plan will expire and no further awards may be granted after the tenth anniversary of the date that the 2014 Incentive Plan was adopted.

 

*Securities Laws*

 

The 2014 Incentive Plan is designed to comply with all applicable provisions of the Securities Act and the Exchange Act and, to the extent applicable, any and all regulations and rules promulgated by the SEC thereunder.  The 2014 Incentive Plan is administered, and share options will be granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations.  We have filed with the SEC a registration statement on Form S-8 covering the ordinary shares issuable under the 2014 Incentive Plan.

 

*Non-US Participants*

 

Certain employees, non-employee directors and consultants who provide services to us outside of the U.S. may receive awards under the 2014 Incentive Plan.  In order to comply with the laws in countries other than the United States in which we (either directly or through subsidiaries) operate or have employees, non-employee directors or consultants, or in order to comply with the requirements of any foreign securities exchange, the administrator has the power and authority to:  (a) determine which of our subsidiaries will be covered by the 2014 Incentive Plan; (b) determine which employees, non-employee directors or consultants outside the United States will be eligible to participate in the 2014 Incentive Plan; (c) modify the terms and conditions of any award granted to employees, non-employee directors or consultants outside the United States to comply with applicable foreign laws or listing requirements of any such foreign securities exchange; (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable; and (e) take any action, before or after an award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any such foreign securities exchange.  However, notwithstanding the foregoing, the 2014 Incentive Plan provides that the plan administrator may not take any such action with respect to non-US participants if it would violate any applicable law.

 

C.                                                                 Board Practices

 

**Board of Directors**

 

Our board of directors consists of seven directors.  A director is not required to hold any shares in the company by way of qualification.  A director may vote with respect to any contract or transaction in which he or she is materially interested provided the nature of the interest is disclosed prior to its consideration and any vote on such contract or transaction.  The directors may exercise all the powers of the company to borrow money, mortgage its undertaking, property and uncalled capital, and issue debentures or other securities whenever outright or as security for any debt, liability or obligation of the company or of any third party. No director is entitled to any severance benefits upon termination of his or her employment with our company.

 

Cayman Islands law does not require our directors to be independent.  We comply with the New York Stock Exchange requirement that our board comprises a majority of independent directors.

 

Our independent directors hold executive sessions, during which only the independent directors are present, at least once a year. Depending on the nature of the discussion at an executive session, any one of our independent directors may preside over the session.

 

**Committees of the Board of Directors**

 

We have established three committees under the board of directors:  the audit committee, the compensation committee and the nominating and corporate governance committee. We have adopted a charter for each of the three committees which can be found on the investor relations section of our website. Each committee’s members and functions are described below.

 

77

----

Table of Contents

 

*Audit Committee*.  Our audit committee consists of Carlos Watson, Alan Kelsey and Nicholas Baird, all of whom satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange and the independence requirements of Rule 10A-3 under the Exchange Act.  Mr. Watson is the chair of our audit committee and qualifies as an “audit committee financial expert” as defined in Item 16A of Form 20-F.  The purpose of the audit committee is to assist our board of directors with its oversight responsibilities regarding:  (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) the independent auditor’s qualifications and independence, and (4) the performance of our internal audit function and independent auditor.  The audit committee is responsible for, among other things:

 

·                  selecting our independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by our independent auditors;

 

·                  reviewing with our independent auditors any audit problems or difficulties and management’s response;

 

·                  reviewing and approving all proposed related-party transactions;

 

·                  discussing the annual audited financial statements with management and our independent auditors;

 

·                  reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies;

 

·                  annually reviewing and reassessing the adequacy of our audit committee charter;

 

·                  such other matters that are specifically delegated to our audit committee by our board of directors from time to time;

 

·                  meeting separately and periodically with management and our internal and independent auditors; and

 

·                  reporting regularly to the full board of directors.

 

*Compensation Committee*.  Our compensation committee consists of Alan Kelsey, Jack Hennessy and Kosmas Kalliarekos, all of whom satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange.  Mr. Kelsey is the chair of our compensation committee.  The compensation committee is responsible for, among other things:

 

·                  approving and overseeing the compensation package for our executive officers;

 

·                  reviewing and making recommendations to the board with respect to the compensation of our directors;

 

·                  reviewing and approving corporate goals and objectives relevant to the compensation of our chief executive officer, evaluating the performance of our chief executive officer in light of those goals and objectives, and setting the compensation level of our chief executive officer based on this evaluation; and

 

·                  reviewing periodically and making recommendations to the board regarding any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans.

 

*Nominating and Corporate Governance Committee*.  Our nominating and corporate governance committee consists of Alan Kelsey, Jack Hennessy, Carlos Watson and Kosmas Kalliarekos, all of whom satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange.  Mr. Hennessy is the chair of our nominating and corporate governance committee.  The nominating and corporate governance committee is responsible for, among other things:

 

·                  identifying and recommending to the board nominees for election or re-election to the board, or for appointment to fill any vacancy;

 

·                  reviewing annually with the board the current composition of the board in light of the characteristics of independence, skills, experience and availability of service to us;

 

·                  identifying and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as the nominating and corporate governance committee itself;

 

·                  advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any corrective action to be taken; and

 

·                  monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.

 

78

----

Table of Contents

 

**Duties of Directors**

 

In summary, directors and officers owe the following fiduciary duties under Cayman Islands law:

 

·                  duty to act in good faith in what the directors believe to be in the best interests of the company as a whole;

 

·                  duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose;

 

·                  duty not to improperly fetter the exercise of future discretion;

 

·                  duty to exercise powers fairly as between different sections of shareholders;

 

·                  duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and

 

·                  duty to exercise independent judgment.

 

In addition to the above, directors also owe a duty of care which is not fiduciary in nature.  This duty has been defined as a requirement to act as “a reasonably diligent person” having both:

 

·                  the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company; and

 

·                  the general knowledge, skill and experience which that director has.

 

As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position.  However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors.  This can be done by way of permission granted in the memorandum and articles of association or alternatively by shareholder approval at general meetings.

 

**Terms of Directors and Officers**

 

Shareholders permitted to exercise more than 50% of the voting power capable of being exercised at any general meeting are entitled, by notice in writing to the company from time to time, to appoint any natural person or corporation to be a director and to remove and/or replace any director. Unless re-appointed or removed from office pursuant to the preceding sentence, each director is appointed for a term expiring at our next-following annual general meeting. The directors may appoint any person to be a director, either to fill a vacancy or as an additional director provided that the appointment does not cause the number of directors to exceed any number fixed by or in accordance with our articles of association as the maximum number of directors.  The office of a director shall be vacated if: (a) the director gives notice in writing to the company that he resigns the office of director, (b) the director absents himself (without being represented by proxy or an alternate director appointed by him) from three consecutive meetings of the board of directors without special leave of absence from the directors, and the directors pass a resolution that he has by reason of such absence vacated office, (c) the director dies, becomes bankrupt or makes any arrangement or composition with his creditors generally, (d) the director is found to be or becomes of unsound mind, or (e) all of the other directors (being not less than two in number) determine that he should be removed as a director, either by a resolution passed by all of the other directors at a meeting of the directors duly convened and held in accordance with our articles of association or by a resolution in writing signed by all of the other directors.

 

D.                                                                 Employees

 

See “Item 4. Information on the Company—B. Business Overview—Our Teaching, Administrative, Regional and Central Support Staff.”

 

79

----

Table of Contents

 

E.                                                                  Share Ownership

 

The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of December 24, 2015, by:

 

·                  each of our directors and executive officers; and

 

·                  each person known to us to own beneficially more than 5% of our ordinary shares.

 

Beneficial ownership is determined in accordance with the rules and regulations of the SEC.  In computing the number of shares beneficially owned by a person and the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days of December 24, 2015 including through the exercise of any option, warrant or other right or the conversion of any other security.  These shares, however, are not included in the computation of the percentage ownership of any other person.

 
| ** **                                        | ** ** | **Shares Beneficially Owned** | ** ** |
|---------------------------------------------------|------------|-----------------------------------------|------------|
| ** **                                        | ** ** | **Number**                              | ** ** | **%** | ** ** |
| **Directors   and Executive Officers:**           |       |                                    |       |   |   |
| Andrew   Fitzmaurice                              |       | 2,009,755                               |       | 1.9 |   |
| Graeme Halder                                     |       | *                                       |       | * |   |
| Alan Kelsey                                       |       | *                                       |       | * |   |
| Jack Hennessy                                     |       | **—**                              |       | **—** |   |
| Kosmas   Kalliarekos                              |       | —                                  |       | — |   |
| Carlos Watson                                     |       | *                                       |       | * |   |
| Nicholas Baird                                    |       | —                                  |       | — |   |
| Philippe Lagger                                   |       | *                                       |       | * |   |
| Nicola Duggan   Redfern                           |       | *                                       |       | * |   |
| All directors   and executive officers as a group |       | 2,764,010                               |       | 2.7 |   |
|                                              |       |                                    |       |   |   |
| **Principal   Shareholders:**                     |       |                                    |       |   |   |
| Premier   Education Holdings Ltd(1)     |       | 67,900,810                              |       | 65.2 |   |
| Baron Capital   Group, Inc.(2)               |       | 5,619,459                               |       | 5.4 |   |

 

----

*                                         Less than 1% of our total outstanding ordinary shares

 

(1)                                 The Baring Asia Private Equity Fund III (“Fund III”) and The Baring Asia Private Equity Fund IV (“Fund IV”) and certain affiliates hold approximately 96% of the shares in Premier Education Holdings. The general partner of Fund III is Baring Private Equity Asia GP III, L.P. (“Fund III GP”). The general partner of Fund III GP is Baring Private Equity Asia GP III Limited (“Fund III Limited”). The general partner of Fund IV and such affiliates is Baring Private Equity Asia GP IV, L.P. (“Fund IV GP”). The general partner of Fund IV GP is Baring Private Equity Asia GP IV Limited (“Fund IV Limited”). As the sole shareholder of Fund III Limited and Fund IV Limited, Jean Eric Salata may be deemed to have voting and dispositive power with respect to our shares beneficially owned by Fund IV and its affiliates, but disclaims beneficial ownership of such shares. The address of Fund III GP, Fund IV GP, Fund III Limited, Fund IV Limited and Jean Eric Salata is c/o Maples Corporate Services Limited, 390 GT Ugland House, South Church Street, Georgetown, Grand Cayman, Cayman Islands.

 

(2)                                 Held as to 5,546,119 shares by BAMCO INC. and 73,340 shares by Baron Capital Management, Inc., both of which are subsidiaries of Baron Capital Group, Inc. Ronald Baron owns a controlling interest in Baron Capital Group, Inc. The business address of each of the foregoing is 767 Fifth Avenue, 49th Floor, New York, New York 10153. We have furnished the information about the beneficial ownership of these persons based on their joint Schedule 13-G filed with the SEC on February 17, 2015.

 

As a number of our shares are held in book-entry form, we are not aware of the identity of all our shareholders.  As of December 24, 2015, we had 31,839,051 ordinary shares held by two U.S. resident shareholders of record, representing approximately 30.6% of total voting power.

 

None of our existing shareholders have different voting rights from other shareholders.  We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

 

80

----

Table of Contents

 

**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

 

None.

 

C.                                                                 Interests of Experts and Counsel

 

Not applicable.

 

**Item 8.**                                           **Financial Information**

 

A.                                                                 Consolidated Statements and Other Financial Information

 

See “Item 18. Financial Statements.”

 

**Legal Proceedings**

 

From time to time, we are parties to litigations in various jurisdictions in which we operate. Currently we are not engaged in nor are we aware of any threatened litigation which can have a material adverse impact on us.

 

**Dividend Policy**

 

We do not plan to pay any cash dividends on our ordinary shares in the foreseeable future.  We intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.

 

Our board of directors has complete discretion whether to pay dividends, subject to the approval of our shareholders.  If our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.  Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.

 

B.                                                                 Significant Changes

 

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

 

**Item 9.**                                           **The Offer and Listing**

 

A.                                                                 Offer and Listing Details

 

The following table provides the high and low trading prices for our ordinary shares on The New York Stock Exchange for the periods indicated since our initial public offering.

 
| ** **                                    | ** ** | **Sales Price** | ** ** |
|-----------------------------------------------|------------|----------------------|------------|
| ** **                                    | ** ** | **High**             | ** ** | **Low** | ** ** |
| **Yearly   High and Low**                     |       |                 |       |   |   |
| Fiscal year   ended August 31, 2015      |       | 26.83                |       | 14.55 |   |
| Fiscal year   ended August 31, 2014      |       | 20.87                |       | 17.44 |   |
| **Quarterly   High and Low**                  |       |                 |       |   |   |
| Fiscal quarter   ended November 30, 2015      |       | 21.83                |       | 18.67 |   |
| Fiscal quarter   ended August 31, 2015   |       | 26.29                |       | 20.54 |   |
| Fiscal quarter   ended May 31, 2015      |       | 26.83                |       | 21.01 |   |
| Fiscal quarter   ended February 28, 2015 |       | 21.41                |       | 16.35 |   |
| Fiscal quarter   ended November 30, 2014      |       | 19.12                |       | 14.55 |   |
| Fiscal quarter   ended August 31, 2014   |       | 20.87                |       | 17.52 |   |
| Fiscal quarter   ended May 31, 2014      |       | 19.65                |       | 17.44 |   |
| **Monthly   High and Low**                    |       |                 |       |   |   |
| November 2015                            |       | 21.23                |       | 18.67 |   |
| October 2015                             |       | 20.96                |       | 19.39 |   |
| September 2015                           |       | 21.83                |       | 19.49 |   |
| August 2015                              |       | 25.60                |       | 20.54 |   |
| July 2015                                |       | 25.34                |       | 24.02 |   |
| June 2015                                |       | 26.29                |       | 23.89 |   |

 

81

----

Table of Contents

 

B.                                                                 Plan of Distribution

 

Not applicable.

 

C.                                                                 Markets

 

Our ordinary shares, are listed on The New York Stock Exchange.

 

D.                                                                 Selling Shareholders

 

Not applicable.

 

E.                                                                  Dilution

 

Not applicable.

 

F.                                                                   Expenses of the Issue

 

Not applicable.

 

**Item 10.**                                    **Additional Information**

 

A.                                                                 Share Capital

 

Not applicable.

 

B.                                                                 Memorandum and Articles of Association

 

We are a Cayman Islands exempted company and our affairs are governed by our memorandum and articles of association and the Cayman Islands Companies Law, which we refer to as the Companies Law below.

 

As of the date of this annual report, our authorized share capital consists of $20,000,000 divided into 2,000,000,000 shares of par value $0.01 each.  The following is a summary of the material provisions of our currently effective memorandum and articles of association and the Companies Law as they relate to the material terms of our ordinary shares.

 

**Ordinary Shares**

 

***General***

 

All of our outstanding ordinary shares are fully paid and non-assessable. Certificates representing the ordinary shares are generally not issued and legal title to our ordinary shares is recorded in registered form in the register of members. Shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.

 

***Dividends***

 

The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors subject to the Companies Law and our articles of association.

 

82

----

Table of Contents

 

***Voting Rights***

 

Each ordinary share is entitled to one vote on all matters upon which the ordinary shares are entitled to vote. Voting at any shareholders’ meeting is by show of hands unless a poll is demanded. A poll may be demanded by our chairman or any shareholder.

 

A quorum required for a meeting of shareholders consists of shareholders who hold at least one-third of the issued voting share capital at the meeting present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative. Although not required by the Companies Law, we expect to hold annual shareholders’ meetings as required by NYSE and such meetings may be convened by our board of directors on its own initiative or upon a request to the directors by shareholders holding in aggregate at least one-third of our voting share capital. Advance notice of at least 21 clear days is required for the convening of our annual general meeting and other shareholders’ meetings.

 

An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast in a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast attaching to the ordinary shares. A special resolution is required for certain important matters specified in the Companies Law and our articles of association, including reducing the amount of our share capital, amending the memorandum or articles of association, and changing the corporate name. Holders of the ordinary shares may effect certain changes by ordinary resolution, including increasing the amount of our authorized share capital, consolidating and dividing all or any of our share capital into shares of larger amount than our existing share capital, and canceling any unissued shares.

 

***Transfer of Shares***

 

Subject to the restrictions of our memorandum and articles of association, as applicable, a shareholder may transfer all or any of his or her ordinary shares by an instrument of transfer in writing and in the usual or common form or any other form approved by our board.

 

If our directors refuse to register a transfer they must, within two months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal. The registration of transfers may, on 14 calendar days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and our register of members closed at such times and for such periods as our board of directors may from time to time determine. However, the registration of transfers may not be suspended, and the register may not be closed, for more than 40 calendar days in any year.

 

***Liquidation***

 

On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of shares), assets available for distribution among the holders of ordinary shares must be distributed among the holders of the ordinary shares on a pro rata basis. If our assets available for distribution are insufficient to repay all of the paid-up capital, the assets will be distributed so that the losses are borne by our shareholders proportionately.

 

***Calls on Shares and Forfeiture of Shares***

 

Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called upon and remain unpaid on the specified time are subject to forfeiture.

 

***Redemption of Shares***

 

Subject to the provisions of the Companies Law, we may issue shares on terms that are subject to redemption, at our option or at the option of the holders, on such terms and in such manner as may be determined by our board, before the issue of such shares.

 

***Variation of Rights of Shares***

 

All or any of the special rights attached to any class of shares may, subject to the provisions of the Companies Law, be varied either with the consent in writing of the holders of not less than two-thirds of the issued shares of the relevant class or with the sanction of a resolution passed at a separate meeting of the holders of the shares of such class by a majority of two-thirds of the votes cast at such a meeting.

 

83

----

Table of Contents

 

***Inspection of Books and Records***

 

Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records. However, we will provide our shareholders with annual audited financial statements.

 

**Exempted Company**

 

We are an exempted company with limited liability under the Companies Law of the Cayman Islands. The Companies Law distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:

 

·                  annual reporting requirements are minimal and consist mainly of a statement that the company has conducted its operations mainly outside of the Cayman Islands and has complied with the provisions of the Companies Law;

 

·                  an exempted company’s register of members is not open to inspection;

 

·                  an exempted company does not have to hold an annual general meeting;

 

·                  an exempted company may issue negotiable or bearer shares or shares with no par value;

 

·                  an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);

 

·                  an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

 

·                  an exempted company may register as a limited duration company; and

 

·                  an exempted company may register as a segregated portfolio company.

 

**Differences in Corporate Law**

 

The Companies Law is modeled after that of England and Wales but does not follow recent statutory enactments in England. In addition, the Companies Law differs from laws applicable to Delaware corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Law applicable to us and the laws applicable to Delaware corporations and their shareholders.

 

***Mergers and Similar Arrangements***

 

The Companies Law permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and non-Cayman Islands companies. For these purposes:

 

·                  a “merger” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company; and

 

·                  a “consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company.

 

In order to effect a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized by:

 

·                  a special resolution of the shareholders of each constituent company; and

 

·                  such other authorization, if any, as may be specified in such constituent company’s articles of association.

 

The plan of merger or consolidation must be filed with the Registrar of Companies together with a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger and consolidation will be published in the Cayman Islands Gazette. Dissenting shareholders have the right to be paid the fair value of their shares if they follow the required procedures, subject to certain exceptions. The fair value of the shares will be determined by the Cayman Islands court if it cannot be agreed among the parties. Court approval is not required for a merger or consolidation effected in compliance with these statutory procedures.

 

84

----

Table of Contents

 

In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands.

 

While a dissenting shareholder has the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

 

·                  the statutory provisions as to the required majority vote have been met;

 

·                  the shareholders have been fairly represented at the meeting in question;

 

·                  the arrangement is such that a businessman would reasonably approve; and

 

·                  the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law.

 

When a take-over offer is made and accepted by holders of not less than 90% of the shares within four months, the offerer may, within a two-month period conversing on the expiration of such four months period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless there is evidence of fraud, bad faith or collusion.

 

If the arrangement and reconstruction is thus approved, the dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

 

***Shareholder Suits***

 

We are not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, the company will be the proper plaintiff in any claim based on a breach of duty owed to it, and a claim against (for example) the company’s officers or directors usually may not be brought by a shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:

 

·                  a company is acting, or proposing to act, illegally or beyond the scope of its authority;

 

·                  the act complained of, although not beyond the scope of the authority, could be effected if duly authorized by more than the number of votes which have actually been obtained; or

 

·                  those who control the company are perpetrating a “fraud on the minority.”

 

A shareholder may have a direct right of action against the company where the individual rights of that shareholder have been infringed or are about to be infringed.

 

***Directors’ Fiduciary Duties***

 

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components, the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director must act in a manner he or she reasonably believes to be in the best interests of the corporation. A director must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interests of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction and that the transaction was of fair value to the corporation.

 

85

----

Table of Contents

 

As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company, and therefore it is considered that he or she owes the following duties to the company—a duty to act bona fide in the best interests of the company, a duty not to make a profit out of his or her position as director (unless the company permits him or her to do so) and a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interests or his or her duty to a third party. A director of a Cayman Islands company owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her knowledge and experience. However, there are indications that the courts are moving towards an objective standard with regard to the required skill and care.

 

Under our memorandum and articles of association, directors who are in any way, whether directly or indirectly, interested in a contract or proposed contract with our company must declare the nature of their interest at a meeting of the board of directors. Following such declaration, a director may vote in respect of any contract or proposed contract notwithstanding his interest.

 

***Shareholder Action by Written Resolution***

 

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent by amendment to its certificate of incorporation. Under Cayman Islands law, a company may eliminate the ability of shareholders to approve corporate matters by way of written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matters at a general meeting without a meeting being held by amending the articles of association. Our memorandum and articles of association allow shareholders to act by written resolutions.

 

***Cumulative Voting***

 

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled for a single director, which increases the shareholder’s voting power with respect to electing such director.

 

As permitted under Cayman Islands law, our memorandum and articles of association do not provide for cumulative voting.

 

***Removal of Directors***

 

Under the Delaware General Corporation Law, a director of a corporation may be removed with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.

 

Under our memorandum and articles of association, directors can be removed by shareholders permitted to exercise more than 50% of the voting power capable of being exercised at any general meeting.

 

***Transactions with Interested Shareholders***

 

The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date on which such person becomes an interested shareholder. An interested shareholder generally is one which owns or owned 15% or more of the target’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.

 

86

----

Table of Contents

 

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions entered into must be bona fide in the best interests of the company and not with the effect of perpetrating a fraud on the minority shareholders.

 

***Dissolution and Winding Up***

 

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. The Delaware General Corporation Law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board of directors.

 

Under our memorandum and articles of association, if our company is wound up, the liquidator of our company may distribute the assets with the sanction of an ordinary resolution of the shareholders.

 

***Variation of Rights of Shares***

 

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise.

 

Under Cayman Islands law and our memorandum and articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the consent in writing of the holders of not less than two-thirds of the issued shares of the relevant class or with the sanction of a resolution passed at a separate meeting of the holders of the shares of such class by a majority of two-thirds of the votes cast at such a meeting.

 

***Amendment of Governing Documents***

 

Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise.

 

Our memorandum and articles of association may be amended by a special resolution of shareholders.

 

***Inspection of Books and Records***

 

Under the Delaware General Corporation Law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list of shareholders and other books and records.

 

Holders of our shares have no general right under Cayman Islands law to inspect or obtain copies of our register of members or our corporate records. However, we intend to provide our shareholders with annual reports containing audited financial statements.

 

***Anti-takeover Provisions in our Memorandum and Articles of Association***

 

Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including a provision that authorizes our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders.

 

Such shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue these preference shares, the price of our ordinary shares may fall and the voting and other rights of the holders of our ordinary shares may be materially adversely affected.

 

However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.

 

87

----

Table of Contents

 

***Rights of Non-resident or Foreign Shareholders***

 

There are no limitations imposed by foreign law or by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.

 

C.                                                                 Material Contracts

 

Below is a description of material contracts we entered into in the two years preceding the date of this annual report other than contracts entered into in the ordinary course of business and other than contracts described in “Item 4. Information on the Company” or elsewhere in this annual report on Form 20-F.

 

On April 24, 2015, we entered into a definitive agreement to acquire six schools from Meritas, LLC, an operator of international schools based in Chicago, and certain affiliates (the “Meritas Schools”) for $575 million in cash, subject to certain adjustments. In connection with the acquisition of the Meritas Schools, we also agreed to acquire from Meritas, LLC and certain affiliates, for an additional $7.5 million, a convertible subordinated promissory note that is convertible into a 10% equity interest in Léman Manhattan Preparatory School (founded in 2005) in New York City upon the occurrence of certain events. Under the terms of this investment, we may acquire 100% of the school in the future subject to certain conditions being met. The transactions closed on June 25, 2015.

 

D.                                                                 Exchange Controls

 

There are no Cayman Islands exchange control regulations that would affect the import or export of capital or the remittance of dividends, interest or other payments to non-resident holders of our shares.

 

E.                                                                  Taxation

 

The following summary of the material Cayman Islands and United States federal income tax consequences of an investment in our ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change.  This summary does not deal with all possible tax consequences relating to an investment in our ordinary shares, such as the tax consequences under state, local and other tax laws.

 

**Cayman Islands Taxation Considerations**

 

Prospective investors should consult their professional advisers on the possible tax consequences of buying, holding or selling any ordinary shares under the laws of their country of citizenship, residence or domicile.

 

The following is a discussion of certain Cayman Islands income tax consequences of an investment in the ordinary shares.  The discussion is a general summary of present law, which is subject to prospective and retroactive change.  It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.

 

Under existing Cayman Islands laws, payments of dividends and capital in respect of the ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of dividend or capital to any holder of the ordinary shares nor will gains derived from the disposal of the ordinary shares be subject to Cayman Islands income or corporation tax.  The Cayman Islands currently have no income, corporation or capital gains tax and no estate duty, inheritance tax or gift tax.

 

**Material United States Federal Income Tax Considerations**

 

The following discussion describes the material U.S. federal income tax consequences to U.S. Holders (defined below) under present law of an investment in our ordinary shares.  This summary applies only to U.S. Holders that hold our ordinary shares as capital assets and that have the U.S. dollar as their functional currency.  This discussion is based on the tax laws of the United States as in effect on the date of this annual report and on U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this annual report, as well as judicial and administrative interpretations thereof available on or before such date.  All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below.  This summary does not address any estate or gift tax consequences or any state, local, or non-U.S. tax consequences, nor does it address the Medicare contribution tax on net investment income.

 

88

----

Table of Contents

 

The following discussion does not deal with the tax consequences to any particular investor and does not describe all of the tax consequences to persons in special tax situations such as:

 

·                  banks;

 

·                  certain financial institutions;

 

·                  regulated investment companies;

 

·                  insurance companies;

 

·                  broker dealers;

 

·                  traders that elect to mark to market;

 

·                  tax-exempt entities;

 

·                  persons liable for alternative minimum tax;

 

·                  certain U.S. expatriates;

 

·                  persons holding our ordinary shares as part of a straddle, hedging, constructive sale, conversion or integrated transaction;

 

·                  persons that actually or constructively own 10% or more of the company’s voting stock;

 

·                  persons that are resident or ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States;

 

·                  persons who acquired our ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation; or

 

·                  persons holding our ordinary shares through partnerships or other pass-through entities.

 

PROSPECTIVE PURCHASERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR ORDINARY SHARES.

 

The discussion below of the U.S. federal income tax consequences to “U.S. Holders” applies to a holder that is a beneficial owner of our ordinary shares and is, for U.S. federal income tax purposes,

 

·                  an individual who is a citizen or resident of the United States;

 

·                  a corporation (or other entity taxable as a corporation) organized under the laws of the United States, any State or the District of Columbia;

 

·                  an estate whose income is subject to U.S. federal income taxation regardless of its source; or

 

·                  a trust that (1) is subject to the supervision of a court within the United States and the control of one or more U.S. persons or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

 

The tax treatment of an entity taxable as a partnership for U.S. federal income tax purposes that holds our ordinary shares generally will depend on such partner’s status and the activities of the partnership.

 

***Dividends***

 

Subject to the passive foreign investment company rules discussed below, the gross amount of distributions made by the company with respect to our ordinary shares (including the amount of any non-U.S. taxes withheld therefrom, if any) generally will be includable in a U.S. Holder’s gross income in the year received as dividend income, but only to the extent that such distributions are paid out of the company’s current or accumulated earnings and profits as determined under U.S. federal income tax principles.  The company does not maintain calculations of its earnings and profits under U.S. federal income tax principles, and, accordingly, a U.S. Holder should therefore expect to treat all cash distributions as dividends for such purposes.  The dividends will generally be foreign source and non-U.S. taxes withheld therefrom, if any, may be creditable against the U.S. Holder’s U.S. federal income tax liability subject to applicable limitations.  The dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.  With respect to certain non-corporate U.S. Holders (including individuals), dividends will be taxed at the lower capital gains rate applicable to “qualified dividend income,” provided that (1) our ordinary shares are readily tradable on an established securities market in the United States, (2) the company is neither a PFIC (as defined below) nor treated as such with respect to the U.S. Holder for the taxable year in which the dividend is paid and the preceding taxable year, and (3) certain holding period requirements are met.  Under U.S. Internal Revenue Service authority, common or ordinary shares generally are considered for purposes of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on the New York Stock Exchange, as our ordinary shares are.  A U.S. Holder should consult its tax advisor regarding the availability of the lower tax rate applicable to qualified dividend income for any dividends we pay with respect to our ordinary shares, as well as the effect of any change in applicable law after the date of this annual report.

 

89

----

Table of Contents

 

***Sale or Other Disposition of Ordinary Shares***

 

Subject to the passive foreign investment company rules discussed below, upon a sale or other disposition of our ordinary shares, a U.S. Holder will recognize a capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount realized and the U.S. Holder’s tax basis in such ordinary shares.  Any such gain or loss generally will be U.S. source gain or loss and will be treated as long-term capital gain or loss if the U.S. Holder’s holding period in our ordinary shares exceeds one year.  Non-corporate U.S. Holders (including individuals) generally will be subject to U.S. federal income tax on long-term capital gain at preferential rates.  The deductibility of capital losses is subject to significant limitations.  Gain, if any, realized by a U.S. Holder on the sale or other disposition of our ordinary shares generally will be treated as U.S. source income for U.S. foreign tax credit purposes.

 

***Passive Foreign Investment Company***

 

We would be classified as a passive foreign investment company (a “PFIC”), for any taxable year if either:  (a) at least 75% of its gross income is “passive income” for purposes of the PFIC rules, or (b) at least 50% of the value of its assets (determined on the basis of a quarterly average) produce or are held for the production of passive income.  For this purpose, we will be treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, 25% or more (by value) of the stock.

 

Under the PFIC rules, if we were considered a PFIC at any time that a U.S. Holder holds our ordinary shares, we would continue to be treated as a PFIC with respect to such holder’s investment unless (i) we cease to be a PFIC and (ii) the U.S. Holder has made a “deemed sale” election under the PFIC rules.

 

Based on the current market price of our ordinary shares and the composition of our income, assets and operations, we do not expect to be treated as a PFIC for U.S. federal income tax purposes for the current taxable year or in the foreseeable future.  This is a factual determination, however, that must be made annually after the close of each taxable year.  Therefore there can be no assurance that we will not be classified as a PFIC for the current taxable year or for any future taxable year.

 

If we are considered a PFIC at any time that a U.S. Holder holds our ordinary shares, any gain recognized by the U.S. Holder on a sale or other disposition of our ordinary shares, as well as the amount of any “excess distribution” (defined below) received by the U.S. Holder, would be allocated ratably over the U.S. Holder’s holding period for our ordinary shares.  The amounts allocated to the taxable year of the sale or other disposition (or the taxable year of receipt, in the case of an excess distribution) and to any year before we became a PFIC would be taxed as ordinary income.  The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed.  For the purposes of these rules, an excess distribution is the amount by which any distribution received by a U.S. Holder on its ordinary shares exceeds 125% of the average of the annual distributions on our ordinary shares received during the preceding three years or the U.S. Holder’s holding period, whichever is shorter.  Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of our ordinary shares.

 

If we are treated as a PFIC with respect to a U.S. Holder for any taxable year, the U.S. Holder will be deemed to own shares in any of our subsidiaries that are also PFICs.  However, an election for mark-to-market treatment would likely not be available with respect to any such subsidiaries.  If we are considered a PFIC, a U.S. Holder will also be subject to information reporting requirements, possibly on an annual basis.  U.S. Holders should consult their own tax advisors about the potential application of the PFIC rules to an investment in our ordinary shares.

 

90

----

Table of Contents

 

***U.S. Information Reporting and Backup Withholding***

 

Dividend payments with respect to our ordinary shares and proceeds from the sale, exchange or redemption of our ordinary shares may be subject to information reporting to the U.S. Internal Revenue Service and possible U.S. backup withholding.  Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding.  U.S. Holders who are required to establish their exempt status may be required to provide such certification on U.S. Internal Revenue Service Form W-9.  U.S. Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

 

Backup withholding is not an additional tax.  Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability, and such holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the U.S. Internal Revenue Service and furnishing any required information.

 

***Information With Respect to Foreign Financial Assets***

 

Certain U.S. Holders who are individuals and certain entities may be required to report information relating to our ordinary shares, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain U.S. financial institutions).  U.S. Holders should consult their tax advisors regarding their reporting obligations with respect to their ownership and disposition of our ordinary shares.

 

***Certain United Kingdom Tax Considerations***

 

Although we are incorporated in the Cayman Islands, we are resident for tax purposes in the United Kingdom. The following discussion of certain United Kingdom tax consequences of an investment in our ordinary shares is based upon current UK tax law and published HMRC practice as of the date of this prospectus supplement, all of which are subject to change. The following discussion does not deal with all possible United Kingdom tax consequences relating to an investment in our ordinary shares and investors should take their own professional advice in respect thereof.

 

The United Kingdom does not impose an obligation on a paying entity to withhold or deduct an amount for or on account of United Kingdom tax on a payment of a dividend.

 

Individuals and companies who are not resident for tax purposes in the United Kingdom and do not carry on a trade, profession or vocation in the United Kingdom, and who hold our ordinary shares as an investment and not for trading purposes will not generally be subject to United Kingdom capital gains tax or United Kingdom corporation tax in respect of chargeable gains on a disposal of their ordinary shares.

 

No United Kingdom stamp duty or stamp duty reserve tax should be payable in connection with a transfer of or an agreement to transfer our ordinary shares, provided that our ordinary shares are not and do not become paired with shares issued by a body corporate incorporated in the United Kingdom, no register for our ordinary shares is kept in the United Kingdom, and no instrument of transfer relating to our ordinary shares is executed within or brought into the United Kingdom.

 

F.                                                                   Dividends and Paying Agents

 

Not applicable.

 

G.                                                                 Statement by Experts

 

Not applicable.

 

H.                                                                Documents on Display

 

You may read and copy any reports or other information that we file at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.  Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.  In addition, the SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC.  The address of that site is www.sec.gov.

 

We also make available on our website, free of charge, our annual reports on Form 20-F and the text of our reports on Form 6-K, including any amendments to these reports, as well as certain other SEC filings, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC.  Our website address is www.nordangliaeducation.com.  The information contained on our website is not incorporated by reference in this document.

 

91

----

Table of Contents

 

I.                                                                     Subsidiary Information

 

For a listing of our subsidiaries, see Exhibit 8.1.

 

**Item 11.**                               **Quantitative and Qualitative Disclosures About Market Risk**

 

Market risk is the risk of loss related to adverse changes in market prices, including interest rates and foreign exchange rates, of financial instruments. We are exposed to various types of market risk, including changes in interest rates and foreign exchange rates, in the ordinary course of business. We face foreign exchange risk to the extent that our business’s revenue, costs, assets and liabilities are denominated in currencies other than the U.S. dollar. Our interest rate risk arises from changes in interest rates which may affect the cost of our financings. We do not hold or issue derivative or other financial instruments for trading purposes.

 

**Foreign Currency Risk**

 

We have significant and expanding international operations trading in non-U.S. dollar currencies. Movements in global exchange rates can cause currency exposures to our consolidated U.S. 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 our 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 U.S. dollars and euros to try to minimize exchange rate fluctuation risks.

 

In consideration of benefits against cost, we do not hedge our translation exposure, but will consider managing transactional exposures by using forward cover instruments where significant transactions are involved.

 

We hold significant non-U.S. dollar cash balances in overseas operations which arise from fee income and which represent a combination of working capital and trading profits. These balances are held in operations which include countries where exchange control restrictions may prevent full repatriation of funds to the UK parent undertakings. We utilize these funds through a combination of reinvestment in the expansion or improvement of existing overseas operations or by repatriation to the UK through management contracts, royalty agreements, management charges and dividends.

 

Through these means we believe that satisfactory distribution of these funds can be achieved. For further information relating to our foreign currency risk exposure please see note 23 of our audited consolidated financial statements for fiscal 2015.

 

**Interest Rate Risk**

 

Our interest rate risk arises from our existing long-term borrowings. Borrowings issued at variable rates expose us to cash flow interest rate risk. Borrowings issued at fixed rates expose us to fair value interest rate risk. During fiscal 2015, fiscal 2014 and fiscal 2013, our borrowings at variable rates were denominated in U.S. dollars. For further information relating to our interest rate risk exposure please see note 23 of our audited consolidated financial statements for fiscal 2015.

 

**Item 12.**                               **Description of Securities Other than Equity Securities**

 

A.                                                                 Debt Securities

 

Not applicable.

 

B.                                                                 Warrants and Rights

 

Not applicable.

 

C.                                                                 Other Securities

 

Not applicable.

 

D.                                                                 American Depositary Shares

 

Not applicable.

 

92

----

Table of Contents

 

**PART II**

 

**Item 13.**                               **Defaults, Dividend Arrearages and Delinquencies**

 

None.

 

**Item 14.**                               **Material Modifications to the Rights of Security Holders and Use of Proceeds**

 

None.

 

**Item 15.**                               **Controls and Procedures**

 

**Disclosure Controls and Procedures**

 

We have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) under the supervision and the participation of the executive board of management, which is responsible for the management of the internal controls, and which includes the principal executive officer and the principal financial officer.  There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.  Based upon our evaluation as of August 31, 2015, the principal executive officer and principal financial officer have concluded that the disclosure controls and procedures were not effective as of August 31, 2015 because of the material weaknesses described below under “Management’s Annual Report on Internal Control over Financial Reporting.”

 

**Management’s Annual Report on Internal Control over Financial Reporting**

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed, under the supervision of the principal executive officer and the principal financial officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with generally accepted accounting principles.

 

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly, reflect transactions and dispositions of assets, provide reasonable assurance that transactions are recorded in the manner necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are only carried out in accordance with the authorization of our executive board of management and directors, and provide reasonable assurance regarding the prevention or timely detection of any unauthorized acquisition, use or disposition of our assets and that could have a material effect on our financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Moreover, projections of any evaluation of the effectiveness of internal control to future periods are subject to a risk that controls may become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement to our annual or interim financial statements will not be prevented or detected on a timely basis.

 

Our management has assessed the effectiveness of internal control over financial reporting based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013. Based on this assessment, our management has identified the two material weaknesses described below:

 

·                  Limited experience of financial reporting and accounting personnel with appropriate knowledge of IFRS and SEC reporting requirements at the head office level to properly address complex IFRS accounting issues and to prepare and review consolidated financial statements and related disclosure to fulfill SEC financial reporting requirements.

 

·      We do not have in place a formally designed and/or documented framework for our internal control over financial reporting.  At the head office level, in conjunction with the lack of financially experienced staff, this impacts the head office’s ability to identify and mitigate the risk of material misstatements relating to new transactions, complex accounting issues and consolidation.  This includes entity level controls and the following components:

 

·      Control environment: lacks formalization and effective governance processes, including supervision and review over the preparation and reporting of financial statements.

 

·      Risk assessment: there are no process or formal enterprise risk management procedures and, coupled with the lack of an understanding of risks relevant to the financial reporting process, limits our ability to assess and manage risk and to identify processes and controls to mitigate those risks.

 

·      Control activities and their monitoring: lack formalized design and evidence of implementation of controls such as a formalized accounting manual and reviews. The head office operates an informal non-evidenced internal control over financial reporting framework.

 

·      Information and communication: The head office does not have appropriate segregation of duties and compensating controls to address related risks and lacks controls to identify or prevent human error and management override of controls.

 

93

----

Table of Contents

 

Based on this assessment, our management has concluded that, as of August 31, 2015, we did not maintain an effective internal control over financial reporting.

 

We believe the material weaknesses are primarily due to our increased need for a formally designed and documented framework articulating our internal control over financial reporting and for greater technical accounting expertise as a result of our growth and significant acquisitions during fiscal 2015. We intend to address the material weaknesses through the following measures:

 

·              Recruiting additional senior financial accounting personnel with appropriate knowledge of IFRS and SEC reporting requirements.  This will help further strengthen and develop our plans to address our deficiencies.

·              Appointing external advisors to assist with improving our internal control over financial reporting.

·              Based on the two points described above, we will take the following list of actions, which is not exhaustive as we anticipate more actions will be identified:

 

·                  Developing and implementing a formalized accounting manual.

·                  Establishing formalized enterprise risk management procedures.

·                  Improving our IT systems to include the development and implementation of robust, standardized accounting systems and procedures at both school and group levels. The IT systems will address the need to create a more formal environment with the appropriate segregation of duties and controls to prevent human error.

 

This Annual Report does not include an attestation report of the Company’s independent registered public accounting firm because we qualify as an emerging growth company and, as such, are exempt from such attestation.

 

**Changes in Internal Control over Financial Reporting**

 

Other than the remediation measures taken in response to the material weaknesses described above, there were no changes in our internal control over financial reporting during the year ended August 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

**Item 16A.**                      **Audit Committee Financial Expert**

 

Our board of directors has determined that Carlos Watson, an independent director (under the standards set forth in Section 303A of the Corporate Governance Rules of the New York Stock Exchange and Rule 10A-3 under the Exchange Act) and a member of our audit committee, is an audit committee financial expert.

 

**Item 16B.**                      **Code of Ethics**

 

We have adopted a Code of Business Conduct and Ethics that applies to all our employees, officers and directors, including our principal executive, principal financial and principal accounting officers.  Our code of Business Conduct and Ethics addresses, among other things, competition and fair dealing, conflicts of interest, financial matters and external reporting, company funds and assets, confidentiality and corporate opportunity requirements and the process for reporting violations of the Code of Business Conduct and Ethics, employee misconduct, conflicts of interest or other violations.  Our Code of Business Conduct and Ethics is intended to meet the definition of “code of ethics” under Item 16B of form 20-F under the Exchange Act.

 

Our Code of Business Conduct and Ethics is available on our website at www.nordangliaeducation.com.

 

**Item 16C.**                      **Principal Accountant Fees and Services**

 

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by PricewaterhouseCoopers, our independent registered public accounting firm, for the periods indicated.

 
| ** **                          | ** ** | **Year Ended August 31,** | ** ** |
|-------------------------------------|------------|------------------------------------------|------------|
| ** **                          | ** ** | **2014**                                 | ** ** | **2015** | ** ** |
| ** **                          | ** ** | **($ in millions)**            | ** ** |
| Audit fees(1)             |       | 0.4                                      |       | 0.6 |   |
| Audit-related   fees(2)   |       | 0.5                                      |       | 1.4 |   |
| Tax fees(3)               |       | —                                   |       | 0.3 |   |
| All other fees(4)         |       | 4.2                                      |       | 1.6 |   |

 

----

(1)                                 “Audit fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our independent registered public accounting firm for the audit of our annual financial statements that are normally provided in connection with statutory and regulatory filings or engagements for those fiscal years.

 

94

----

Table of Contents

 

(2)                                 “Audit-related fees” means the aggregate fees billed in each of the fiscal years listed for assurance and related services by our independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.”

 

(3)                                “Tax fees” means the aggregate fees billed in each of the fiscal years listed for professional services rendered by our independent registered public accounting firm for tax compliance, tax advice, and tax planning.

 

(4)                                 “All other fees” means the aggregate fees billed in each of the fiscal years listed for products and services provided by our independent registered public accounting firm, other than the services reported in the other categories.

 

The policy of our audit committee is to pre-approve all audit and non-audit services provided by our independent registered public accounting firm, including audit services, audit-related services, tax services and other services as described above, other than those for *de minimis* services which are approved by the Audit Committee prior to the completion of the audit.

 

**Item 16D.**                      **Exemptions from the Listing Standards for Audit Committees**

 

Not applicable.

 

**Item 16E.**                      **Purchases of Equity Securities by the Issuer and Affiliated Purchasers**

 

Not applicable.

 

**Item 16F.**                       **Change in Registrant’s Certifying Accountant**

 

Not applicable.

 

**Item 16G.**                     **Corporate Governance**

 

We believe that there are no significant differences between our corporate governance practices and those of U.S. domestic companies under the listing standards of the New York Stock Exchange.

 

**Item 16H.**                     **Mine Safety Disclosure**

 

Not applicable.

 

**PART III**

 

**Item 17.**                               **Financial Statements**

 

Not applicable.

 

**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.

 

95

----

Table of Contents

 

**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                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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                                                                                                                                                                                                                                                                                                                                                          |
|                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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)  |
|                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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)       |
|                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                 |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 15.2                 |       | Consent of   PricewaterhouseCoopers LLP, UK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

 

96

----

Table of Contents

 

**SIGNATURES**

 

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

 
|                                 | **Nord   Anglia Education, Inc.** |
|--------------------------------------|----------------------------------------|
|                                 |                                   |
|                                 |                                   |
|                                 | By:                                    | /s/ Andrew Fitzmaurice |
|                                 |                                   | Name: Andrew   Fitzmaurice |
|                                 |                                   | Title: Chief Executive   Officer |
|                                 |                                   |   |
| Date:    December 31, 2015 |                                   |   |

 

97

----

Table of Contents

 

**Contents**

 
| ** **                                                                              | **Pages**  |
|-----------------------------------------------------------------------------------------|------------|
|                                                                                    |       |
| Reports of Independent Registered Public Accounting   Firms                             | F-2        |
|                                                                                    |       |
| Consolidated Income Statement for the year ended 31   August 2015                  | F-4        |
|                                                                                    |       |
| Consolidated Statement of Comprehensive Income for the   year ended 31 August 2015 | F-5        |
|                                                                                    |       |
| Consolidated Balance Sheet as at 31 August 2015                                    | F-6        |
|                                                                                    |       |
| Consolidated Statement of Changes in Equity for the   year ended 31 August 2015    | F-7        |
|                                                                                    |       |
| Consolidated Cash Flow Statement for the year ended 31   August 2015               | F-9        |
|                                                                                    |       |
| Notes to the Financial Statements for the year ended   31 August 2015              | F-10-F-98  |
|                                                                                    |       |
| Parent Company Financial Information                                                    | F-99-F-101 |

 

F-1

----

 

Table of Contents

 
|  |  |
|--|--|

 

**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 at 31 August, 2015 and 31 August, 2014 and the related consolidated statements of income, comprehensive loss, changes in equity and cash flow for each of the two years in the period ended 31 August 2015 present fairly, in all material respects, the financial position of Nord Anglia Education, Inc. at 31 August, 2015 and 31 August, 2014, and the results of their operations and their cash flows for each of the two years in the period ended 31 August, 2015 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.

 

We have also audited the adjustments to the 2013 financial statements to retrospectively reflect the final adjustments to the provisional allocation of the purchase price for the WCL Group Limited described in Note 2 and the adjustments to earnings per share to retroactively reflect as outstanding in all periods the shares held by Premier Education Holdings Limited, the parent, immediately prior to the initial public offering described in Note 28. In our opinion, such adjustments are appropriate and have been properly applied.  We were not engaged to audit, review, or apply any procedures to the 2013 financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2013 consolidated financial statements taken as a whole.

 

As discussed in Note 1 to the consolidated financial statements, the Company has changed the manner in which it accounts for rent and depreciation expenses for premium schools, and the manner in which it presents bank overdrafts in 2015.

 

**/s/ PricewaterhouseCoopers**

Hong Kong, 31 December 2015

 

*PricewaterhouseCoopers,22/F Prince’s Building, Central Hong Kong*

*T: +852 2289 8888, F: +852 2810 9888, www.pwchk.com*

 

F-2

----

Table of Contents

 

**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 sheet as of September 1, 2013 and the related consolidated income statement, consolidated statement of comprehensive loss, of changes in equity and consolidated cash flow statement for the year ended August 31, 2013, before the effects of the adjustments to retrospectively reflect the final adjustments to the provisional allocation of the purchase price for the WCL Group Limited described in Note 2 and adjustments to earnings per share to retroactively reflect as outstanding in all periods the shares held by Premier Education Holdings Limited, the parent, immediately prior to the initial public offering described in Note 28, present fairly, in all material respects, the financial position of Nord Anglia Education, Inc. and its subsidiaries at  September 1, 2013, and the results of its operations and cash flows for the year ended August 31, 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (the 2013 financial statements before the effects of the adjustments discussed in Note 2 and Note 28 are not presented herein). 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 audit.  We conducted our audit, before the effects of the adjustments described above, 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 audit provides a reasonable basis for our opinion.

 

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively reflect the final adjustments to the provisional allocation of the purchase price for the WCL Group Limited described in Note 2 and adjustments to earnings per share to retroactively reflect as outstanding in all periods the shares held by Premier Education Holdings Limited, the parent, immediately prior to the initial public offering described in Note 28, and accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have properly applied. Those adjustments were audited by other auditors.

 

As discussed in Note 1 to the consolidated financial statements, the Company has changed the manner in which it accounts for rent and depreciation expenses for premium schools and the manner in which it presents bank overdrafts in 2015.

 

/s/PricewaterhouseCoopers LLP

East Midlands

United Kingdom

4 December 2013, except for the effects of the change in the manner in which the Company accounts for rent and depreciation expenses for premium schools as described in Note 1, as to which the date is 29 May 2015 and the manner in which it presents bank overdrafts, as described in Note 1, as to which the date is 31 December 2015.

 

F-3

----

Table of Contents

 

**Consolidated Income Statement**

***for the three years ended 31 August 2015***

 
| ** **                                                                                                                                             | ** ** | ** ** | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|----------|------------|----------|------------|------------|------------|
| ** **                                                                                                                                             | ** ** | **Note**   | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**     | ** ** |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| Revenue                                                                                                                                                |       | *3*        |       | 323.7    |       | 474.6    |       | **577.0**  |       |
| Cost of sales                                                                                                                                          |       |       |       | (190.4   | )          | (280.3   | )          | **(355.9** | **)**      |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| **Gross   profit**                                                                                                                                     |       |       |       | 133.3    |       | 194.3    |       | **221.1**  |       |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| Selling, general   and administrative expenses                                                                                                         |       |       |       | (64.5    | )          | (92.9    | )          | **(127.0** | **)**      |
| Depreciation                                                                                                                                           |       |       |       | (0.4     | )          | (2.0     | )          | **(0.7**   | **)**      |
| Amortization                                                                                                                                           |       | *12*       |       | (5.7     | )          | (10.4    | )          | **(13.9**  | **)**      |
| Other losses                                                                                                                                           |       | *5*        |       | —   |       | —   |       | **(3.0**   | **)**      |
| Exceptional   expenses                                                                                                                                 |       | *4*        |       | (17.7    | )          | (100.2   | )          | **(18.8**  | **)**      |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| Total expenses                                                                                                                                         |       | *6*        |       | (88.3    | )          | (205.5   | )          | **(163.4** | **)**      |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| **Operating   profit/(loss)**                                                                                                                          |       |       |       | 45.0     |       | (11.2    | )          | **57.7**   |       |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| Finance income                                                                                                                                         |       | *9*        |       | 2.3      |       | 2.0      |       | **2.8**    |       |
| Finance expense                                                                                                                                        |       | *9*        |       | (51.3    | )          | (55.5    | )          | **(39.7**  | **)**      |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| **Net   financing expense**                                                                                                                            |       |       |       | (49.0    | )          | (53.5    | )          | **(36.9**  | **)**      |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| **(Loss)/profit   before tax**                                                                                                                         |       |       |       | (4.0     | )          | (64.7    | )          | **20.8**   |       |
| Income tax   expense                                                                                                                                   |       | *10*       |       | (19.3    | )          | (25.7    | )          | **(12.2**  | **)**      |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| **(Loss)/profit   for the year**                                                                                                                       |       |       |       | (23.3    | )          | (90.4    | )          | **8.6**    |       |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| **Attributable   to:**                                                                                                                                 |       |       |       |     |       |     |       |       |       |
| Owners of the   parent                                                                                                                                 |       |       |       | (23.3    | )          | (90.4    | )          | **7.4**    |       |
| Non-controlling   interest                                                                                                                             |       |       |       | —   |       | —   |       | **1.2**    |       |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| **(Loss)/earnings   per share from continuing operations attributable to the owners of the parent   during the year (expressed in $ per share):** |       |       |       |     |       |     |       |       |       |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| Basic   (loss)/earnings per share                                                                                                                      |       | *28*       |       | (0.34    | )          | (1.07    | )          | **0.07**   |       |
|                                                                                                                                                   |       |       |       |     |       |     |       |       |       |
| Diluted   (loss)/earnings per share                                                                                                                    |       | *28*       |       | (0.34    | )          | (1.07    | )          | **0.07**   |       |

 

The notes on pages F-10 to F-98 form an integral part of these financial statements.

 

F-4

----

Table of Contents

 

**Consolidated Statement of Comprehensive Loss**

***for the three years ended 31 August 2015***

 
| ** **                                                              | ** ** | ** ** | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**  | ** ** |
|-------------------------------------------------------------------------|------------|------------|------------|----------|------------|----------|------------|-----------|------------|
| ** **                                                              | ** ** | **Note**   | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**    | ** ** |
|                                                                    |       |       |       |     |       |     |       |      |       |
| **(Loss)/profit   for the year**                                        |       |       |       | (23.3    | )          | (90.4    | )          | **8.6**   |       |
|                                                                    |       |       |       |     |       |     |       |      |       |
| **Other   comprehensive income/(loss)**                                 |       |       |       |     |       |     |       |      |       |
| *Items   that will not be reclassified to profit or loss:*              |       |       |       |     |       |     |       |      |       |
| Actuarial   gains/(losses) on defined benefit pension plans             |       | *20*       |       | 7.7      |       | (5.1     | )          | **(10.4** | **)**      |
|                                                                    |       |       |       |     |       |     |       |      |       |
| *Items   that may be subsequently reclassified to profit or loss*       |       |       |       |     |       |     |       |      |       |
| Foreign exchange   translation gains/(losses)                           |       |       |       | 9.9      |       | (10.9    | )          | **(52.6** | **)**      |
|                                                                    |       |       |       |     |       |     |       |      |       |
| **Other   comprehensive income/(loss) for the year, net of income tax** |       |       |       | 17.6     |       | (16.0    | )          | **(63.0** | **)**      |
|                                                                    |       |       |       |     |       |     |       |      |       |
| **Total   comprehensive loss for the year**                             |       |       |       | (5.7     | )          | (106.4   | )          | **(54.4** | **)**      |
|                                                                    |       |       |       |     |       |     |       |      |       |
| **Attributable   to:**                                                  |       |       |       |     |       |     |       |      |       |
| Owners of the   parent                                                  |       |       |       | (5.7     | )          | (106.4   | )          | **(55.6** | **)**      |
| Non-controlling   interest                                              |       |       |       | —   |       | —   |       | **1.2**   |       |
|                                                                    |       |       |       |     |       |     |       |      |       |
| **Total   comprehensive loss for the year**                             |       |       |       | (5.7     | )          | (106.4   | )          | **(54.4** | **)**      |

 

The notes on pages F-10 to F-98 form an integral part of these financial statements.

 

F-5

----

Table of Contents

 

**Consolidated Balance Sheet**

***as at 1 September 2013, 31 August 2014 and 2015***

 
| ** **                                                | ** ** | ** ** | ** ** | **1 September   2013** | ** ** | **2014** | ** ** | **2015**     | ** ** |
|-----------------------------------------------------------|------------|------------|------------|-----------------------------|------------|----------|------------|--------------|------------|
| ** **                                                | ** ** | **Note**   | ** ** | **$m**                      | ** ** | **$m**   | ** ** | **$m**       | ** ** |
| **Non-current   assets**                                  |       |       |       |                        |       |     |       |         |       |
| Property, plant   and equipment                           |       | *11*       |       | 98.2                        |       | 140.1    |       | **449.7**    |       |
| Intangible   assets                                       |       | *12*       |       | 763.4                       |       | 801.5    |       | **1,415.5**  |       |
| Investments in   joint ventures and associates            |       | *13*       |       | 0.5                         |       | 0.5      |       | **0.5**      |       |
| Trade and other   receivables                             |       | *15*       |       | 12.4                        |       | 9.2      |       | **37.9**     |       |
| Deferred tax   assets                                     |       | *14*       |       | 21.2                        |       | 20.9     |       | **70.4**     |       |
|                                                      |       |       |       |                        |       |     |       |         |       |
|                                                      |       |       |       | 895.7                       |       | 972.2    |       | **1,974.0**  |       |
| **Current   assets**                                      |       |       |       |                        |       |     |       |         |       |
| Current tax   assets                                      |       |       |       | 1.0                         |       | 1.6      |       | **1.2**      |       |
| Trade and other   receivables                             |       | *15*       |       | 83.2                        |       | 94.8     |       | **131.1**    |       |
| Cash and cash   equivalents (excluding bank overdrafts)   |       | *16*       |       | 222.9                       |       | 256.4    |       | **317.0**    |       |
|                                                      |       |       |       |                        |       |     |       |         |       |
|                                                      |       |       |       | 307.1                       |       | 352.8    |       | **449.3**    |       |
|                                                      |       |       |       |                        |       |     |       |         |       |
| **Total   assets**                                        |       |       |       | 1,202.8                     |       | 1,325.0  |       | **2,423.3**  |       |
| ** **                                                |       |       |       |                        |       |     |       |         |       |
| **Current   liabilities**                                 |       |       |       |                        |       |     |       |         |       |
| Trade and other   payables                                |       | *19*       |       | (96.8                       | )          | (63.7    | )          | **(170.9**   | **)**      |
| Interest-bearing   loans and borrowings                   |       | *17*       |       | (82.4                       | )          | (113.4   | )          | **(98.3**    | **)**      |
| Finance lease   liabilities                               |       | *18*       |       | (0.0                        | )          | (0.0     | )          | **(3.7**     | **)**      |
| Deferred revenue                                          |       |       |       | (267.2                      | )          | (324.0   | )          | **(518.8**   | **)**      |
| Provisions for   other liabilities and charges            |       | *21*       |       | (3.6                        | )          | (0.5     | )          | **(0.0**     | **)**      |
| Current tax   liabilities                                 |       |       |       | (4.2                        | )          | (1.7     | )          | **(2.9**     | **)**      |
|                                                      |       |       |       |                        |       |     |       |         |       |
|                                                      |       |       |       | (454.2                      | )          | (503.3   | )          | **(794.6**   | **)**      |
| **Non-current   liabilities**                             |       |       |       |                        |       |     |       |         |       |
| Interest-bearing   loans and borrowings                   |       | *17*       |       | (630.4                      | )          | (499.2   | )          | **(1,066.3** | **)**      |
| Derivative   financial instruments                        |       |       |       | —                      |       | —   |       | **(3.0**     | **)**      |
| Finance lease   liabilities                               |       | *18*       |       | —                      |       | —   |       | **(44.6**    | **)**      |
| Other payables                                            |       | *19*       |       | (38.5                       | )          | (50.7    | )          | **(45.7**    | **)**      |
| Deferred revenue                                          |       |       |       | —                      |       | (8.6     | )          | **(27.4**    | **)**      |
| Retirement   benefit obligations                          |       | *20*       |       | (22.2                       | )          | (25.8    | )          | **(46.6**    | **)**      |
| Provisions for other   liabilities and charges            |       | *21*       |       | (2.2                        | )          | (1.2     | )          | **(1.7**     | **)**      |
| Deferred tax   liabilities                                |       | *14*       |       | (35.3                       | )          | (45.5    | )          | **(114.1**   | **)**      |
|                                                      |       |       |       |                        |       |     |       |         |       |
|                                                      |       |       |       | (728.6                      | )          | (631.0   | )          | **(1,349.4** | **)**      |
|                                                      |       |       |       |                        |       |     |       |         |       |
| **Total   liabilities**                                   |       |       |       | (1,182.8                    | )          | (1,134.3 | )          | **(2,144.0** | **)**      |
|                                                      |       |       |       |                        |       |     |       |         |       |
| **Net   assets**                                          |       |       |       | 20.0                        |       | 190.7    |       | **279.3**    |       |
| ** **                                                |       |       |       |                        |       |     |       |         |       |
| **Equity   attributable to equity holders of the parent** |       |       |       |                        |       |     |       |         |       |
| Share capital                                             |       | *22*       |       | 67.5                        |       | 1.0      |       | **1.0**      |       |
| Share premium                                             |       | *22*       |       | 256.5                       |       | 597.1    |       | **735.2**    |       |
| Other reserves                                            |       |       |       | 6.9                         |       | 6.9      |       | **6.9**      |       |
| Currency   translation reserve                            |       |       |       | 9.8                         |       | (1.1     | )          | **(53.7**    | **)**      |
| Shareholder   deficit                                     |       |       |       | (320.7                      | )          | (413.2   | )          | **(414.0**   | **)**      |
|                                                      |       |       |       |                        |       |     |       |         |       |
| **Shareholders’   funds**                            |       |       |       | 20.0                        |       | 190.7    |       | **275.4**    |       |
| **Non-controlling   interest**                            |       |       |       | —                      |       | —   |       | **3.9**      |       |
|                                                      |       |       |       |                        |       |     |       |         |       |
|                                                      |       |       |       | 20.0                        |       | 190.7    |       | **279.3**    |       |

 

The notes on pages F-10 to F-98 form an integral part of these financial statements.

 

These financial statements set out on pages F-4 to F-98 were approved by the board of directors on 31 December 2015 and were signed on its behalf by:

 
| **A Fitzmaurice**         | **G Halder**            |
|---------------------------|-------------------------|
| *Director*                | *Director*              |
| 31   December 2015   | 31   December 2015 |
| Company number: MC-264950 |                    |

 

F-6

----

 

Table of Contents

 

**Consolidated Statement of Changes in Equity**

***for the three years ended 31******August 2015***

 
| ** **                                                      | ** ** | **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 1 September 2012                                |       | 67.5                |       | 255.2               |       | 6.9                  |       | (0.1                                  | )          | (285.7                           | )          | 43.8                        |       | —                            |       | 43.8               |       |
|                                                            |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| **Total comprehensive loss for the year**                       |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Loss for the year                                               |       | —              |       | —              |       | —               |       | —                                |       | (23.3                            | )          | (23.3                       | )          | —                            |       | (23.3              | )          |
|                                                            |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| **Other comprehensive income for the year**                     |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Currency translation differences                                |       | —              |       | —              |       | —               |       | 9.9                                   |       | —                           |       | 9.9                         |       | —                            |       | 9.9                |       |
| Actuarial gains on defined benefit pension schemes              |       | —              |       | —              |       | —               |       | —                                |       | 7.7                              |       | 7.7                         |       | —                            |       | 7.7                |       |
|                                                            |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Total comprehensive loss for the year                           |       | —              |       | —              |       | —               |       | 9.9                                   |       | (15.6                            | )          | (5.7                        | )          | —                            |       | (5.7               | )          |
|                                                            |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| **Transactions with owners, recorded directly in equity**       |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Issuance of preference shares                                   |       | —              |       | 140.0               |       | —               |       | —                                |       | —                           |       | 140.0                       |       | —                            |       | 140.0              |       |
| Preference shares repurchase                                    |       | —              |       | (138.7              | )          | —               |       | —                                |       | —                           |       | (138.7                      | )          | —                            |       | (138.7             | )          |
| Equity-settled share based payment transactions                 |       | —              |       | —              |       | —               |       | —                                |       | 0.1                              |       | 0.1                         |       | —                            |       | 0.1                |       |
| Payment to ultimate parent for common control business transfer |       | —              |       | —              |       | —               |       | —                                |       | (19.5                            | )          | (19.5                       | )          | —                            |       | (19.5              | )          |
| Equity dividends paid                                           |       | —              |       | —              |       | —               |       | —                                |       | 0.0                              |       | 0.0                         |       | —                            |       | 0.0                |       |
|                                                            |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Total contributions by and distributions to owners              |       | —              |       | 1.3                 |       | —               |       | —                                |       | (19.4                            | )          | (18.1                       | )          | —                            |       | (18.1              | )          |
|                                                            |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Balance at 31 August 2013 and 1 September 2013        |       | 67.5                |       | 256.5               |       | 6.9                  |       | 9.8                                   |       | (320.7                           | )          | 20.0                        |       | —                            |       | 20.0               |       |
| **Total comprehensive loss for the year**                       |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Loss for the year                                               |       | —              |       | —              |       | —               |       | —                                |       | (90.4                            | )          | (90.4                       | )          | —                            |       | (90.4              | )          |
|                                                            |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| **Other comprehensive income for the year**                     |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Currency translation differences                                |       | —              |       | —              |       | —               |       | (10.9                                 | )          | —                           |       | (10.9                       | )          | —                            |       | (10.9              | )          |
| Actuarial losses on defined benefit pension schemes             |       | —              |       | —              |       | —               |       | —                                |       | (5.1                             | )          | (5.1                        | )          | —                            |       | (5.1               | )          |
|                                                            |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Total comprehensive loss for the year                           |       | —              |       | —              |       | —               |       | (10.9                                 | )          | (95.5                            | )          | (106.4                      | )          | —                            |       | (106.4             | )          |
|                                                            |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| **Transactions with owners, recorded directly in equity**       |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Proceeds from ordinary shares issued                            |       | 1.0                 |       | 348.6               |       | —               |       | —                                |       | —                           |       | 349.6                       |       | —                            |       | 349.6              |       |
| Issue 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 the 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 31 August 2014                                  |       | 1.0                 |       | 597.1               |       | 6.9                  |       | (1.1                                  | )          | (413.2                           | )          | 190.7                       |       | —                            |       | 190.7              |       |

 

The notes on pages F-10 to F-98 form an integral part of these financial statements.

 

F-7

----

Table of Contents

 

**Consolidated Statement of Changes in Equity***(continued)*

***for the three years ended 31******August 2015***

 
| ** **                                                | ** ** | **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 1 September 2014                          |       | 1.0                 |       | 597.1               |       | 6.9                  |       | (1.1                                  | )          | (413.2                           | )          | 190.7                       |       | —                            |       | 190.7              |       |
|                                                      |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| **Total comprehensive profit for the year**               |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Profit for the year                                       |       | —              |       | —              |       | —               |       | —                                |       | 7.4                              |       | 7.4                         |       | 1.2                               |       | 8.6                |       |
|                                                      |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| **Other comprehensive income for the year**               |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Currency translation differences                          |       | —              |       | —              |       | —               |       | (52.6                                 | )          | —                           |       | (52.6                       | )          | 0.0                               |       | (52.6              | )          |
| Actuarial losses on defined benefit pension schemes       |       | —              |       | —              |       | —               |       | —                                |       | (10.4                            | )          | (10.4                       | )          | —                            |       | (10.4              | )          |
|                                                      |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| Total comprehensive profit for the year                   |       | —              |       | —              |       | —               |       | (52.6                                 | )          | (3.0                             | )          | (55.6                       | )          | 1.2                               |       | (54.4              | )          |
|                                                      |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| **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                         |       | —                            |       | 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               |       | —               |       | —                                |       | 2.2                              |       | 140.3                       |       | 2.7                               |       | 143.0              |       |
|                                                      |       |                |       |                |       |                 |       |                                  |       |                             |       |                        |       |                              |       |               |       |
| **Balance at 31 August 2015**                        |       | **1.0**             |       | **735.2**           |       | **6.9**              |       | **(53.7**                             | **)**      | **(414.0**                       | **)**      | **275.4**                   |       | **3.9**                           |       | **279.3**          |       |

 

The notes on pages F-10 to F-98 form an integral part of these financial statements.

 

F-8

----

Table of Contents

 

**Consolidated Cash Flow Statement**

***for the three years ended 31 August 2015***

 
| ** **                                                                                                   | ** ** | ** ** | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|--------------------------------------------------------------------------------------------------------------|------------|------------|------------|----------|------------|----------|------------|------------|------------|
| ** **                                                                                                   | ** ** | **Note**   | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**     | ** ** |
| **Cash   flows from operating activities**                                                                   |       |       |       |     |       |     |       |       |       |
| (Loss)/profit   for the year before taxation                                                                 |       |       |       | (4.0     | )          | (64.7    | )          | **20.8**   |       |
| *Adjustments   for:*                                                                                         |       |       |       |     |       |     |       |       |       |
| Depreciation and   amortization                                                                              |       |       |       | 17.4     |       | 33.8     |       | **48.5**   |       |
| Other losses                                                                                                 |       |       |       | —   |       | —   |       | **3.0**    |       |
| Refinancing fees                                                                                             |       |       |       | —   |       | 10.0     |       | **—** |       |
| Payment of bond   redemption expense and commitment fees                                                     |       |       |       | —   |       | 77.0     |       | **29.3**   |       |
| Bond issuance   expense                                                                                      |       |       |       | 3.4      |       | —   |       | **—** |       |
| Other non-cash   item                                                                                        |       |       |       | —   |       | (3.2     | )          | **(6.8**   | **)**      |
| Difference   between pension contribution paid and amounts recognized in the Consolidated   Income Statement |       |       |       | (0.6     | )          | —   |       | **(2.9**   | **)**      |
| Loss on sale of property,   plant and equipment and intangible assets                                        |       |       |       | 0.1      |       | 0.1      |       | **0.3**    |       |
| Net financial   expense                                                                                      |       | *9*        |       | 49.0     |       | 53.5     |       | **36.9**   |       |
| Equity settled   share-based payment expenses                                                                |       |       |       | 0.1      |       | 3.1      |       | **2.8**    |       |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
|                                                                                                         |       |       |       | 65.4     |       | 109.6    |       | **131.9**  |       |
| Increase in   trade and other receivables                                                                    |       |       |       | (2.4     | )          | (8.4     | )          | **(27.1**  | **)**      |
| Increase in   trade and other payables and deferred revenue                                                  |       |       |       | 20.6     |       | 31.7     |       | **62.2**   |       |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| Cash generated   from operations                                                                             |       |       |       | 83.6     |       | 132.9    |       | **167.0**  |       |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| Payment of bond   redemption expense and commitment fees                                                     |       |       |       | —   |       | (77.0    | )          | **(29.3**  | **)**      |
| Interest paid                                                                                                |       |       |       | (45.8    | )          | (73.4    | )          | **(31.2**  | **)**      |
| Tax paid                                                                                                     |       |       |       | (25.5    | )          | (25.2    | )          | **(19.9**  | **)**      |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| **Net   cash generated from/(used in) operating activities**                                                 |       |       |       | 12.3     |       | (42.7    | )          | **86.6**   |       |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| **Cash   flows from investing activities**                                                                   |       |       |       |     |       |     |       |       |       |
| Proceeds from   sale of property, plant and equipment                                                        |       |       |       | 0.2      |       | 0.1      |       | **0.5**    |       |
| Purchase of   intangible assets                                                                              |       |       |       | (0.3     | )          | (0.7     | )          | **(1.7**   | **)**      |
| Acquisition of   subsidiary, net of cash acquired                                                            |       | *2*        |       | (240.5   | )          | (35.1    | )          | **(647.1** | **)**      |
| Acquisition of   property, plant and equipment                                                               |       |       |       | (23.9    | )          | (53.6    | )          | **(62.3**  | **)**      |
| Interest   received                                                                                          |       |       |       | 2.1      |       | 2.0      |       | **1.6**    |       |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| **Net   cash used in investing activities**                                                                  |       |       |       | (262.4   | )          | (87.3    | )          | **(709.0** | **)**      |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| **Cash   flows from financing activities**                                                                   |       |       |       |     |       |     |       |       |       |
| Proceeds from   the issue of share capital                                                                   |       | *22*       |       | 140.0    |       | 323.8    |       | **126.2**  |       |
| Transaction cost   on issue of shares                                                                        |       |       |       | —   |       | —   |       | **(7.3**   | **)**      |
| Proceeds from   new loan                                                                                     |       |       |       | 178.5    |       | 577.0    |       | **471.1**  |       |
| Proceeds from   bond                                                                                         |       |       |       | —   |       | —   |       | **217.7**  |       |
| Proceeds from   issue of 10.25% Senior secured notes                                                         |       |       |       | 180.0    |       | —   |       | **—** |       |
| Proceeds from   issue of 8.50% Senior PIK toggle notes                                                       |       |       |       | 150.0    |       | —   |       | **—** |       |
| Repayment of   borrowings                                                                                    |       |       |       | (180.1   | )          | (697.2   | )          | **(107.7** | **)**      |
| Payment of   borrowing expenses                                                                              |       |       |       | (16.8    | )          | —   |       | **—** |       |
| Distribution to   parent                                                                                     |       |       |       | (5.0     | )          | (15.0    | )          | **—** |       |
| Share capital   redemption                                                                                   |       | *22*       |       | (138.7   | )          | (63.5    | )          | **—** |       |
| Dividend paid                                                                                                |       |       |       | (0.0     | )          | (0.0     | )          | **(0.1**   | **)**      |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| **Net   cash generated from financing activities**                                                           |       |       |       | 307.9    |       | 125.1    |       | **699.9**  |       |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| Net   increase/(decrease) in cash and cash equivalents                                                       |       |       |       | 57.8     |       | (4.9     | )          | **77.5**   |       |
| Cash and cash   equivalents at 1 September                                                                   |       |       |       | 108.5    |       | 171.1    |       | **166.2**  |       |
| Effect of   exchange rate fluctuations on cash held                                                          |       |       |       | 4.8      |       | (0.0     | )          | **(17.4**  | **)**      |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| **Cash   and cash equivalents at 31 August (including overdrafts)**                                     |       |       |       | 171.1    |       | 166.2    |       | **226.3**  |       |
| Bank overdrafts                                                                                              |       |       |       | 51.8     |       | 90.2     |       | **90.7**   |       |
|                                                                                                         |       |       |       |     |       |     |       |       |       |
| **Cash   and cash equivalents at 31 August (excluding overdrafts)**                                     |       | *16*       |       | 222.9    |       | 256.4    |       | **317.0**  |       |

 

The notes on pages F-10 to F-98 form an integral part of these financial statements

 

F-9

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015**

 

**1**                                         **Accounting policies**

 

**General information**

 

Nord Anglia Education, Inc. (“the Company”) was incorporated in the Cayman Islands on 14 December 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 Group financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”). The Company has elected to prepare its parent Company financial statements in accordance with IFRS (see note 30). The consolidated Group financial statements and Company financial statements are presented in US Dollars, 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 Group financial statements for the three years ended 31 August 2015 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 dollars 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.

 

**Change in accounting policy**

 

In preparing the financial statements for the current period, Nord Anglia Education changed its accounting policy for expenses in respect of Premium School land and building operating leases and depreciation charges arising from tangible assets owned by Premium Schools. These expenses are now treated as a direct cost and are included in cost of sales. Previously, such expenses were recognized as part of selling and administrative expenses and depreciation. The Directors consider this new policy to be more in line with market practice and will apply this policy to retrospective comparative periods. This change does not affect revenue, operating profit, profit for the period or earnings per share and does not affect the financial covenants under the Company’s senior secured term loan facility.

 

The reconciliation table for the changes in the classification of depreciation and amortization is as follows:

 
| ** **                                     | ** ** | **Year ended 31 August 2013** | ** ** | **Year ended 31 August 2014** | ** ** |
|------------------------------------------------|------------|---------------------------------------------------|------------|---------------------------------------------------|------------|
| ** **                                     | ** ** | **As previously   reported   $m**            | ** ** | **As revised   $m**                          | ** ** | **As previously   reported   $m** | ** ** | **As revised   $m** | ** ** |
| Cost of sales                                  |       | (147.6)                                           |       | (190.4)                                           |       | (214.4) |   | (280.3) |   |
| Gross profit                                   |       | 176.1                                             |       | 133.3                                             |       | 260.2 |   | 194.3 |   |
| Selling, general   and administrative expenses |       | (96.0)                                            |       | (64.5)                                            |       | (137.4) |   | (92.9) |   |
| Depreciation                                   |       | (11.7)                                            |       | (0.4)                                             |       | (23.4) |   | (2.0) |   |
| Operating   (loss)/profit                      |       | 45.0                                              |       | 45.0                                              |       | (11.2) |   | (11.2) |   |

 

The Cost of sales in the current year Consolidated Income Statement includes a charge of $33.9 million relating to depreciation on owned assets in Premium Schools and a charge of $55.0 million associated with rental charges on Premium Schools. These charges were previously recorded as part of Selling, general and administrative expenses and depreciation expenses.

 

F-10

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015**

 

**1**              **Accounting policies***(continued)*

 

**Prior year correction**

 

Certain of the Group’s premium schools issue debentures to individuals and corporations. The primary benefit conferred by a debenture is that it provides the holder a priority in the allocation of school places.

 

The Directors reassessed the way they account for these school debentures. The school debentures reflect revenue received in advance that is to be amortised over the contractual period. These are now treated as deferred income (current and non-current). Previously, the school debentures were split and recognized as part of other reserves within Shareholders’ funds and other payables. The Directors consider this correction to be appropriate under IFRS and has applied this policy to retrospective comparative periods. This change does not affect revenue, operating profit, profit for the period, earnings per share and does not affect the financial covenants under the Company’s senior secured term loan facility. There were no debentures issued in 2013.

 

The reconciliation table for the changes in the classification to correct an error is as follows:

 

**(i) Consolidated Balance Sheet**

 
| ** **                                            | ** ** | **As at 31 August 2014** | ** ** |
|-------------------------------------------------------|------------|----------------------------------------------|------------|
| ** **                                            | ** ** | **As previously    reported   $m** | ** ** | **As corrected for   error   $m** | ** ** | **As revised for   IAS 32   amendment   $m** | ** ** |
| Cash and cash equivalents                             |       | 166.2                                        |       | 166.2 |   | 256.4 |   |
| **Total   assets**                                    |       | **1,234.8**                                  |       | **1,234.8** |   | **1,325.0** |   |
| Interest-bearing   loans and borrowings - current     |       | (23.2)                                       |       | (23.2) |   | (113.4) |   |
| Other payables —   non current                   |       | (55.9)                                       |       | (50.7) |   | (50.7) |   |
| Deferred revenue   — non current                 |       | —                                       |       | (8.6) |   | (8.6) |   |
| Total   non-current liabilities                       |       | (627.6)                                      |       | (631.0) |   | (631.0) |   |
| **Total   liabilities**                               |       | **(1,040.7)**                                |       | **(1,044.1)** |   | **(1,134.3)** |   |
| **Net   assets**                                      |       | **194.1**                                    |       | **190.7** |   | **190.7** |   |
| Other reserves                                        |       | 10.3                                         |       | 6.9 |   | 6.9 |   |
| Equity   attributable to equity holders of the parent |       | 194.1                                        |       | 190.7 |   | 190.7 |   |
| **Total   equity**                                    |       | **194.1**                                    |       | **190.7** |   | **190.7** |   |

 

**(ii) Consolidated Statement of Changes in Equity**

 
| ** **                                           | ** ** | **Year ended 31 August 2014** | ** ** |
|------------------------------------------------------|------------|---------------------------------------------------|------------|
| ** **                                           | ** ** | **As corrected   for error**            | ** ** | **As   revised** | ** ** | **As corrected   for error** | ** ** | **As   revised** | ** ** | **As corrected** | ** ** | **As** | ** ** |
| ** **                                           | ** ** | **Other   reserves**                              | ** ** | **Other   reserves** | ** ** | **Total parent   equity** | ** ** | **Total parent   equity** | ** ** | **for error   Total equity** | ** ** | **revised   Total equity** | ** ** |
| ** **                                           | ** ** | **$m**                                            | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** |
| Total   contributions by and distributions to owners |       | 3.4                                               |       | — |   | 280.5 |   | 277.1 |   | 280.5 |   | 277.1 |   |
| Balance at 31   August 2014                     |       | 10.3                                              |       | 6.9 |   | 194.1 |   | 190.7 |   | 194.1 |   | 190.7 |   |

 

**(iii) Consolidated Cash Flow Statement**

 
| ** **                                     | ** ** | **As at 31 August 2014** | ** ** |
|------------------------------------------------|------------|----------------------------------------------|------------|
| ** **                                     | ** ** | **As previously   reported   $m**       | ** ** | **As corrected for   error   $m** | ** ** |
| Cash generated   from operations               |       | 124.3                                        |       | 132.9 |   |
| Net cash   generated from operating activities |       | (51.3)                                       |       | (42.7) |   |
| Net cash generated   from financing activities |       | 133.7                                        |       | 125.1 |   |

 

The deferred income in the current year Consolidated balance sheet includes $3.4 million relating to the school debentures. These were previously recorded as part of other reserves within Shareholders’ funds.

 

**Adoption of new and amended International Financial Reporting Standards**

 

***Amendment to IAS 32 Financial Instruments: Presentation, on offsetting financial assets and financial liabilities***

 

This amendment clarifies that the right of set-off must not be contingent on a future event. It must also be legally enforceable for all counterparties in the normal course of business, as well as in the event of default, insolvency or bankruptcy. The amendment also considers settlement mechanisms. The amendment changed the way the Group presented its notional cash pooling arrangements. These were previously offset against cash and cash equivalents and are now grossed up and shown separately in borrowings. This change was applied retrospectively and further illustrated below as at 31 August 2014 and 1 September 2013. The notional cash pooling amount in the current year was $90.7 million.

 

F-11

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015**

 

**1**              **Accounting policies***(continued)*

 

**Adoption of new and amended International Financial Reporting Standards*****(continued)***

 
| ** **                                        | ** ** | **As at 1 September 2013** | ** ** | **As at 31 August 2014** | ** ** |
|---------------------------------------------------|------------|------------------------------------------------|------------|----------------------------------------------|------------|
| ** **                                        | ** ** | **As previously   reported   $m**         | ** ** | **As revised   $m**                     | ** ** | **As previously   reported   $m** | ** ** | **As corrected for   error   $m** | ** ** | **As revised for   IAS 32   amendment   $m** | ** ** |
| Cash and cash   equivalents                       |       | 171.1                                          |       | 222.9                                        |       | 166.2 |   | 166.2 |   | 256.4 |   |
| **Total   assets**                                |       | **1,151.0**                                    |       | **1,202.8**                                  |       | **1,234.8** |   | **1,234.8** |   | **1,325.0** |   |
| Interest-bearing   loans and borrowings - current |       | (30.6)                                         |       | (82.4)                                       |       | (23.2) |   | (23.2) |   | (113.4) |   |
| **Total   Liabilities**                           |       | **(1,131.0)**                                  |       | **(1,182.8)**                                |       | **(1,040.7)** |   | **(1,044.1)** |   | **(1,134.3)** |   |
| **Net   asset**                                   |       | **20.0**                                       |       | **20.0**                                     |       | **194.1** |   | **190.7** |   | **190.7** |   |

 

***Amendment to IAS 36 Impairment of Assets, on the recoverable amount disclosures for non-financial assets***

 

This amendment removed certain disclosures of the recoverable amount of CGUs which had been included in IAS 36 by the issue of IFRS 13.

 

***Amendments to IAS 19 Defined Benefit Plans: Employee Contributions***

 

The amendments clarify the accounting for defined benefit plans that require employees or third parties to contribute towards the cost of the benefits. Under the previous version of IAS 19, most entities deducted the contributions from the cost of the benefits earned in the year the contributions were paid. However, the treatment under the 2011 revised standard was not so clear. It could be quite complex to apply, as it requires an estimation of the future contributions receivable and an allocation over future service periods.

 

To provide relief, changes were made to IAS 19. These allow contributions that are linked to service, but that do not vary with the length of employee service (e.g. a fixed percentage of salary), to be deducted from the cost of benefits earned in the period that the service is provided. Therefore many entities will be able to (but not be required) continue accounting for employee contributions using their existing accounting policy.

 

***Annual Improvements 2010-2012 and 2011-2013 Cycles***

 

Annual Improvements 2010-2012 and Annual Improvements 2011-2013 are effective from periods commencing on or after 1 July 2014. The Annual Improvements process covers minor amendments to IFRS that the IASB consider non-urgent but necessary.

 

**Basis of consolidation**

 

The consolidated Group financial statements consist of the financial statements of the Group and the Group’s share of its interests in joint ventures and associates. The consolidated financial statements include the results and operations of certain subsidiaries where the Group has less than 1.50% interest in the share capital (see note 13). 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 schools acquired in the year are disclosed in note 2.

 

Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Statement of Profit or Loss, Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Balance Sheet respectively.

 

·                  ***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 fully consolidated from the date on which controlis 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.

 

F-12

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**              **Accounting policies***(continued)*

 

**Basis of consolidation***(continued)*

 

·                  ***Subsidiaries****(continued)*

 

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 venturewhich is accounted for using the equity method after initially being recognized at cost in the Consolidated Balance Sheet.

 

Under the equity method of accounting, the investments are initially recognised 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 income statement.

 

·                  ***Associates***

 

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Under the equity method of accounting, the investments are initially recognised 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 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.

 

F-13

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 (continued)**

 

**1**                 **Accounting policies***(continued)*

 

**Basis of consolidation***(continued)*

 

·                  ***Associates****(continued)*

 

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 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 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 income.

 

·                  ***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.

 

**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. This cost also includes the cost of independent consultants used in the delivery of Learning Service contracts, which can be a material cost under some of these contracts.

 

·                  ***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/South East 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.

 

F-14

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                 **Accounting policies***(continued)*

 

**Foreign exchange**

 

Transactions in foreign currencies are translated at the exchange rate on the date of the transaction. At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. All differences are taken to the Consolidated Income Statement. The assets and liabilities of overseas subsidiaries denominated in foreign currencies are translated into US Dollars 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 Group Statement of Comprehensive Income 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.

 

**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.

 

Remeasurement 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 Statement of Changes in Equity and Consolidated Balance Sheet.

 

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. Remeasurement 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 20.

 

F-15

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**              **Accounting policies***(continued)*

 

**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.

 

**Borrowings**

 

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured 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 mandatorily redeemable 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 expires. 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 renegotiated 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 derecognition 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-16

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                               **Accounting policies***(continued)*

 

**Taxation**

 

The tax expense included in the Group 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 or directly in the Consolidated Statement of Changes in Equity, in which case it is recognized in the Consolidated Statement of Comprehensive Income 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.

 

**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 the

 

·                  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 recognised 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.

 

F-17

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                 **Accounting policies***(continued)*

 

**Business combinations and g****oodwill***(continued)*

 

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 subsequently remeasured 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 remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognized in profit or loss.

 

Goodwill is initially measured 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.

 

**Common control transactions**

 

For the initial acquisition of a business from an entity under common control, the Group’s policy is to account for the business combination using IFRS 3 fair value accounting and to account for the acquired business from the date of acquisition. For businesses that are reacquired by the Group from an entity under common control (previously acquired, sold to an entity under common control and then reacquired), the Group’s policy is to retrospectively restate results using the Predecessor method of accounting, (i.e., the cost basis of the Baring Private Equity Asia Group) and removing the effect of the prior acquisition and previous disposal.  Where the Group disposes of a business to an entity under common control and the Group loses control**,** the Group’s policy is to apply IFRS 5 and IFRS 10 to recognize that disposal and the resulting gain or loss**.**

 

On 1 April 2013, the Group completed the transfer of British International School LLC from Premier Education Limited for $19.5 million. As this transaction involved the reacquisition of the company from a control party, the predecessor method of accounting has been applied in the presentation of the consolidated financial statements for the years ended 31 August 2014 and 31 August 2013. These statements present the results of the Group as if the British International School LLC had always been part of the Group. Accordingly, the assets and liabilities transferred to the Company have been recognized at the historical cost to the Baring Private Equity Asia Group. We have not disclosed further details of the impact of retrospectively restating the results using the predecessor method of accounting as the British International School LLC has not had a significant impact on operations in the periods presented.

 

**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                       |

 

F-18

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 (continued)**

 

**1**                 **Accounting policies***(continued)*

 

***Brand name***

 

Legally protected or otherwise separable brand names acquired as part of a business combination are capitalized at fair value on acquisition. Management’s expectation is to retain brand names within the business for an indefinite 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. Brand names with finite useful lives are carried at cost and are amortized on a straight-line basis over their estimated useful livesof 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.

 

**Impairment of non-financial assets**

 

Goodwill is initially allocated 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 subsequently reversed.

 

For all other non-financial assets (including 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 subsequently reverses, 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.

 

F-19

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                 **Accounting policies***(continued)*

 

**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 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 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 is 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 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.

 

**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 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.

 

F-20

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                               **Accounting policies***(continued)*

 

**Derivative financial instruments**

 

Derivative financial instruments are recognized at fair value, generally being the cost at the date a contract is entered into and are subsequently re-measured at their fair value. 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.

 

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. 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.

 

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. 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.

 

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

 

**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 reliably estimated.

 

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 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.

 

F-21

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                               **Accounting policies***(continued)*

 

**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.

 

**Financial instruments**

 

(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.

 

(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 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 reclassificationReclassifications 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.

 

F-22

----

Table of Contents

** **

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                               **Accounting policies***(continued)*

 

**Financial instruments***(continued)*

 

(iii) Recognition and derecognition

 

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 statement of financial position 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 realize the assets and settle the liabilities simultaneously.

 

**Going concern**

 

The Group balance sheet as at 31 August 2015 shows that assets exceed liabilities by $279.3 million (2014 - $190.7 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 31 August 2016 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 31 August 2016 to assess the headroom available.

 

At 31 August 2015 the Group had available but undrawn borrowing facilities of $114.4 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 $345.3 million (2014 - $150.5 million), the main reason for this is the receipt of tuition fees in advance of the school year generating deferred income of $501.8 million which is not considered to be a cash cost in the coming year due to the low historical redemption rates by students. 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.

 

F-23

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(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:

 

***i.***                 ***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 was 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 12.

 

***ii.***             ***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 income statement when the asset is derecognized.

 

F-24

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015***(continued)*

 

**1**                               **Accounting policies***(continued)*

 

**Critical accounting estimates and judgements***(continued)*

 

***iii.***         ***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 summarized in the following notes:

 
| ·                  Disclosures   for valuation methods, significant estimates and assumptions | Note 1, 2, 23 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------|
| ·                  Quantitative   disclosures of fair value measurement hierarchy             | Note 23       |
| ·                  Financial   instruments (including those carried at amortized cost)        | Note 23       |

 

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.

 

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, maximizing the use of relevant observable inputs and minimizing 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.

 

***iv.***           ***Pension obligations***

 

The present value of the 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.

 

F-25

----

Table of Contents

** **

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                               **Accounting policies***(continued)*

 

**Critical accounting estimates and judgements***(continued)*

 

***iv.***           ***Pension obligations****(continued)*

 

Other key assumptions for pension obligations are based in part on current market conditions. Additional information is disclosed in note 20.

 

***v.***               ***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 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 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, the following; volatility, risk free interest rate, 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.

 

***vi.***           ***Control and consolidation***

 

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. On 2 March 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 1 January 2015 and incorporated the results from the same date. Financial and operating control was deemed to be gained from 1 January 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 2 March 2015. The impact of consolidation from 1 January 2015 increased Revenue by $10.7 million and EBITDA by $3.1 million.

 

***vii.***       ***Taxation***

 

There are undistributed earnings of $48.5 million (2014 - $38.6 million, 2013 - $26.3 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 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 $2.5 million (2014 2.0 million, 2013 1.3 million).

 

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, together with future tax planning strategies. The Group has $69.3 million of recognized deferred tax assets, including $47.8 million of tax losses carried forward and other recognized timing differences of $21.5 million. The deferred tax asset on recognized tax losses relate mainly to the US, amounting to $43.6 million where expiration is 20 years and Switzerland of $3.2 million where expiration is 6 years, and others where there is no time expiration. It also has $58.0 million of unrecognized tax losses carried forward, and other unrecognized timing differences of $7.7 million. These losses relate to subsidiaries that have a history of losses, 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 tax planning 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 and on the other timing differences. If the Group was able to recognize all unrecognized deferred tax assets, profit and equity would have increased by $65.7 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 $135.0 million. Further details on taxes are disclosed in Note 14. The Group believes that it has provided for all probably and estimable tax liabilities and thus therefore does not expect any liability arising from these audits to have a material impact on the Group’s results of operations, liquidity, capital resources or financial position.

 

F-26

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                               **Accounting policies***(continued)*

 

***vii.***       ***Taxation (continued)***

 

The Group is subject to income taxes in numerous jurisdictions. 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 initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

 

**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 1 January 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 expects no significant impact on its balance sheet.

 

The Group does not expect a significant impact on its 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 and does not expect a significant impact.

 

***IFRS 15 Revenue from Contracts with Customers***

 

The IASB has issued a new standard for the recognition of revenue. This will replace IAS 18 which covers contracts for goods and services and IAS 11 which covers 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.

 

F-27

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**1**                               **Accounting policies***(continued)*

 

***Annual Improvements 2012-2014 Cycle***

 

These improvements are effective for annual periods beginning on or after 1 January 2016.

 

The latest annual improvements clarify:

 

·                  IFRS 5 — 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 — 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 derecognition

 

·                  IFRS 7 — 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

 

·                  IAS 19 — 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 — 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.

 

**2**                               **Business combinations**

 

***Subsidiaries acquired in 2013***

 
| ** **                          | ** ** | **Principal activity** | ** ** | **Date of   acquisition** | ** ** | **Proportion of   voting equity   interests   acquired   (%)** | ** ** | **Consideration   transferred   $m** | ** ** |
|-------------------------------------|------------|-----------------------------|------------|--------------------------------|------------|--------------------------------------------------------------------------|------------|--------------------------------------|------------|
|                                |       |                        |       |                           |       |                                                                     |       |                                 |       |
| WCL Group   Limited                 |       | Holding company             |       | 22/05/13                       |       | 100%                                                                     |       | 134.6                                |       |
| BSG Limited                         |       | Holding company             |       | 25/07/13                       |       | 100%                                                                     |       | 26.8                                 |       |
| Uma Education   Holdings Limited ** |       | Holding company             |       | 02/08/13                       |       | 90.6%                                                                    |       | 12.8                                 |       |

 

WCL Group Limited (“WCL”), BSG Limited (“BSG”) and Uma Education Holdings Limited (“UMA”) were acquired so as to continue the expansion of the Group’s activities in Premium Schools internationally.

 

----

** Uma Education Holdings Limited is a non-trading holding company with a 49% ownership of Saint Andrews International School, a Premium School located in Bangkok, Thailand. 51% of the share capital is comprised of ordinary shares owned by two Thai shareholders. The ordinary shares are entitled to 1 vote per share and the preference shares are entitled to 10 votes per share, thus giving the Group effective control of the business. The Group has rights to 100% of the economic interest in the company, whether in the form of dividends or on liquidation.

 

***Consideration transferred***

 
| ** **                        | ** ** | **WCL Group   Limited   $m** | ** ** | **BSG Limited   $m** | ** ** | **Uma Education   Holdings   Limited   $m** | ** ** |
|-----------------------------------|------------|-----------------------------------|------------|---------------------------|------------|--------------------------------------------------|------------|
|                              |       |                              |       |                      |       |                                             |       |
| Cash                              |       | 134.6                             |       | 26.8                      |       | 12.8                                             |       |
|                              |       |                              |       |                      |       |                                             |       |
| Total   consideration transferred |       | **134.6**                         |       | **26.8**                  |       | **12.8**                                         |       |

 

Acquisition-related costs have been recognised as an expense within the ‘exceptional expenses’ line item in the consolidated income statement.

 

F-28

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2**                               **Business combinations *(continued)***

 

***Subsidiaries acquired in 2013****(continued)*

 

***Fair value of assets acquired and liabilities recognised at the date of acquisition***

 
| ** **                                                           | ** ** | **WCL Group   Limited   $m** | ** ** | **BSG Limited   $m** | ** ** | **Uma   Education   Holdings   Limited   $m** | ** ** | **Total   $m** | ** ** |
|----------------------------------------------------------------------|------------|-----------------------------------|------------|---------------------------|------------|-----------------------------------------------|------------|----------------|------------|
| **Non-current   assets**                                             |       |                              |       |                      |       |                                          |       |           |       |
| Brand (see note   12)                                                |       | 25.2                              |       | 4.1                       |       | 2.2                                           |       | 31.5           |       |
| Customer   relationships (see note 12)                               |       | 28.7                              |       | 4.1                       |       | 4.1                                           |       | 36.9           |       |
| Curriculum   products & Intellectual property (see note 12) |       | 2.6                               |       | —                    |       | —                                        |       | 2.6            |       |
| Computer   software (see note 12)                                    |       | 0.5                               |       | —                    |       | —                                        |       | 0.5            |       |
| Property, plant   and equipment (see note 11)                        |       | 44.6                              |       | 2.4                       |       | 0.6                                           |       | 47.6           |       |
| Other   receivables                                                  |       | 0.1                               |       | 0.4                       |       | —                                        |       | 0.5            |       |
| Deferred tax   assets (see note 14)                                  |       | 7.6                               |       | —                    |       | —                                        |       | 7.6            |       |
|                                                                 |       |                              |       |                      |       |                                          |       |           |       |
| **Current   assets**                                                 |       |                              |       |                      |       |                                          |       |           |       |
| Trade and other   receivables                                        |       | 22.8                              |       | 0.2                       |       | 3.0                                           |       | 26.0           |       |
| Cash and cash   equivalents                                          |       | 27.6                              |       | 6.2                       |       | 1.6                                           |       | 35.4           |       |
|                                                                 |       |                              |       |                      |       |                                          |       |           |       |
| **Current   liabilities**                                            |       |                              |       |                      |       |                                          |       |           |       |
| Trade and other   payables                                           |       | (85.3                             | )          | (8.3                      | )          | (4.6                                          | )          | (98.2          | )          |
| Loans and   borrowings                                               |       | (98.2                             | )          | —                    |       | —                                        |       | (98.2          | )          |
| Current tax   liabilities                                            |       | (3.0                              | )          | —                    |       | —                                        |       | (3.0           | )          |
|                                                                 |       |                              |       |                      |       |                                          |       |           |       |
| **Non-current   liabilities**                                        |       |                              |       |                      |       |                                          |       |           |       |
| Other payables                                                       |       | (26.5                             | )          | —                    |       | 0.0                                           |       | (26.5          | )          |
| Retirement   benefit obligations                                     |       | —                            |       | —                    |       | (0.1                                          | )          | (0.1           | )          |
| Deferred tax   liabilities (see note 14)                             |       | (17.0                             | )          | (2.0                      | )          | —                                        |       | (19.0          | )          |
|                                                                 |       |                              |       |                      |       |                                          |       |           |       |
|                                                                 |       | **(70.3**                         | **)**      | **7.1**                   |       | **6.8**                                       |       | **(56.4**      | **)**      |

 

The fair value of trade and other receivables is $26.0 million and includes trade receivables with a fair value of $21.7 million. The gross contractual amount for trade receivables due is $22.1 million, of which $0.4 million is expected to be uncollectible.

 

The net assets recognised in the 31 August 2013 financial statements were based on a provisional assessment of their fair value while the Group sought an independent valuation for the assets acquired from WCL Group Limited. The valuation had not been completed by the date the 2013 financial statements were approved for issue by management.

 

***Adjustments to the 2013 financial statements to retrospectively reflect the final adjustments to the provisional allocation of the purchase price for the WCL Group Limited***

 

In May 2014, the valuation was completed and the acquisition date fair value of property, plant and equipment was $44.6 million, an increase of $7.7 million over the provisional value. Furthermore, the acquisition date fair value of trade and other payables and non-current other payables were $85.3 million and $26.5 million respectively, an increase of $3.7 million and $18.9 million over the provisional amounts. As a result, there was a net decrease in the deferred tax liabilities of $5.2 million. There was also a corresponding increase in goodwill of $9.7 million, resulting in $204.9 million of total goodwill arising on the acquisition. The increased depreciation charge on the property, plant and equipment from the acquisition date to 31 August 2013 was not considered to be material to the Group.

 

F-29

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2**                               **Business combinations***(continued)*

 

***Subsidiaries acquired in 2013****(continued)*

 

***Goodwill arising on acquisition***

 
| ** **                                             | ** ** | **WCL Group   Limited   $m** | ** ** | **BSG Limited   $m** | ** ** | **Uma   Education   Holdings   Limited   $m** | ** ** | **Total   $m** | ** ** |
|--------------------------------------------------------|------------|-----------------------------------|------------|---------------------------|------------|-----------------------------------------------|------------|----------------|------------|
|                                                   |       |                              |       |                      |       |                                          |       |           |       |
| Consideration   transferred                            |       | 134.6                             |       | 26.8                      |       | 12.8                                          |       | 174.2          |       |
| Less: fair value   of identifiable net assets acquired |       | 70.3                              |       | (7.1                      | )          | (6.8                                          | )          | 56.4           |       |
|                                                   |       |                              |       |                      |       |                                          |       |           |       |
| Goodwill arising   on acquisition (see note 12)        |       | **204.9**                         |       | **19.7**                  |       | **6.0**                                       |       | **230.6**      |       |

 

Goodwill arose from three 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 recognised 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.

 

***Net cash outflow on acquisition of subsidiaries***

 
| ** **                                                          | ** ** | **Total   $m** | ** ** |
|---------------------------------------------------------------------|------------|----------------|------------|
|                                                                |       |           |       |
| Consideration   paid in cash                                        |       | 174.2          |       |
| Consideration   paid in cash in respect of prior year acquisition * |       | 3.5            |       |
| Debt settlement   **                                                |       | 98.2           |       |
| Less: cash and   cash equivalents acquired                          |       | (35.4          | )          |
|                                                                |       |           |       |
|                                                                |       | **240.5**      |       |

 

----

* Consideration paid in cash in respect of prior year acquisition relates to the 1st tranche of the deferred consideration for EEE Limited.

 

** The consideration transferred in respect of the WCL acquisition excludes an amount of $98.2 million for settlement of third party bank debt and shareholder loan notes which were triggered by a change of control clause upon the business combination. This amount has not been recognised as the consideration transferred from an IFRS3 perspective.

 

***Impact of acquisitions on the results of the Group for 2013***

 

Included in the loss for the year was a $3.4 million loss attributable to WCL, $0.4 million profit attributable to BSG and $nil attributable to UMA. Revenue for the year was $15.2 million attributable to WCL, $0.7 million attributable to BSG and $nil attributable to UMA.

 

Had these business combinations been effected at 1 September 2012, the revenue of the Group from continuing operations would have been $442.9 million and the loss for the year from continuing operations would have been $23.3 million. The Directors consider these unaudited ‘pro-forma’ numbers to represent an approximate measure of the performance of the combined group on an annualised basis and to provide a reference point for comparison in future periods.

 

In determining the unaudited ‘pro-forma’ amounts of the Group had these acquisitions been effected at the beginning of the current year, the Directors have assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 September 2012.

 

F-30

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2**                               **Business combinations***(continued)*

 

***Subsidiaries acquired in 2014***

 

 
| ** **                                        | ** ** | **Principal activity** | ** ** | **Date of   acquisition** | ** ** | **Proportion of   voting equity   interests   acquired   (%)** | ** ** | **Consideration   transferred   $m** | ** ** |
|---------------------------------------------------|------------|-----------------------------|------------|--------------------------------|------------|--------------------------------------------------------------------------|------------|--------------------------------------|------------|
|                                              |       |                        |       |                           |       |                                                                     |       |                                 |       |
| Dover Court   International School (Pte.) Limited |       | Premium School              |       | 22/04/14                       |       | 100%                                                                     |       | 25.2                                 |       |
| Neptune   Education Holdings Limited              |       | Holding company             |       | 10/07/14                       |       | 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**                                          |       |

 

Acquisition-related costs have been recognized as an expense within the ‘exceptional expenses’ line item in the consolidated income statement.

 

***Fair value of assets acquired and liabilities recognized at the date of acquisition***

 
| ** **                                    | ** ** | **Dover Court   International   School (Pte.)   Limited   $m** | ** ** | **Neptune   Education   Holdings   Limited   $m** | ** ** | **Total   $m** | ** ** |
|-----------------------------------------------|------------|--------------------------------------------------------------------------|------------|---------------------------------------------------|------------|----------------|------------|
| **Non-current   assets**                      |       |                                                                     |       |                                              |       |           |       |
| Brand (see note   12)                         |       | 7.2                                                                      |       | 7.7                                               |       | 14.9           |       |
| Customer   relationships (see note 12)        |       | 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                    |       | (10.3                                                                    | )          | (0.1                                              | )          | (10.4          | )          |
| Current tax liabilities                       |       | (0.3                                                                     | )          | (0.2                                              | )          | (0.5           | )          |
|                                          |       |                                                                     |       |                                              |       |           |       |
| **Non-current   liabilities**                 |       |                                                                     |       |                                              |       |           |       |
| Deferred tax   liabilities (see note 14)      |       | (3.1                                                                     | )          | (3.3                                              | )          | (6.4           | )          |
|                                          |       |                                                                     |       |                                              |       |           |       |
|                                          |       | **18.9**                                                                 |       | **13.8**                                          |       | **32.7**       |       |

 

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.

 

The initial accounting for the acquisitions of Dover Court International School (Pte.) Limited (“Dover Court”) and Neptune Education Holdings Limited (“Northbridge”) has been finalized at the end of the reporting period.

 

F-31

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2**                               **Business combinations***(continued)*

 

***Subsidiaries acquired in 2014****(continued)*

 

***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 |       | (18.9                                            | )          | (13.8                                             | )          | (32.7          | )          |
|                                                   |       |                                             |       |                                              |       |           |       |
| Goodwill arising   on acquisition (see note 12)        |       | **6.3**                                          |       | **6.2**                                           |       | **12.5**       |       |

 

Goodwill arose from 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.

 

***Net cash outflow on acquisition of subsidiaries***

 
| ** **                                                          | ** ** | **Total   $m** | ** ** |
|---------------------------------------------------------------------|------------|----------------|------------|
|                                                                |       |           |       |
| Consideration   paid in cash                                        |       | 40.2           |       |
| Consideration   paid in cash in respect of prior year acquisition * |       | 4.7            |       |
| Less: cash and   cash equivalents acquired                          |       | (9.8           | )          |
|                                                                |       |           |       |
|                                                                |       | **35.1**       |       |

 

----

* Consideration paid in cash in respect of prior year acquisition relates to the final tranche of the deferred consideration for EEE Limited.

 

***Impact of acquisitions on the 2014 results of the Group***

 

Included in the loss for the prior year is $1.1 million and $0.7 million profit attributable to Dover Court and Northbridge respectively. Revenue for the prior year is $3.9 million attributable to Dover Court and $1.7 million attributable to Northbridge. The full year impact of the Dover Court and Northbridge acquisitions would have been $11.9 million and $7.6 million on revenue and $3.3 million and $1.3 million on profit respectively.

 

Had these business combinations been effected at 1 September 2013, the revenue of the Group from continuing operations would have been $488.5 million, and the loss for the prior year from continuing operations would have been $87.6 million. The Directors consider these unaudited ‘pro-forma’ numbers to represent an approximate measure of the performance of the combined Group on an annualized basis and to provide a reference point for comparison in future periods.

 

In determining the unaudited ‘pro-forma’ amounts of the Group had these acquisitions been effected at the beginning of the current year, the Directors have assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 September 2013.

 

F-32

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2**                               **Business combinations***(continued)*

 

***Subsidiaries acquired in the current period***

 
| ** **                                     | ** ** | **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%                                                                      |       | 161.9                                |       |
| Sterling   International Schools C Corporation |       | Holding Company             |       | 25/06/2015                     |       | 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                                                            |       | 112.5                                                    |       |
| Deferred consideration            |       | 2.3                                                              |       | 27.0                                                     |       |
| Contingent   consideration        |       | 25.0                                                             |       |                                                     |       |
| Equity                            |       | —                                                           |       | 22.4                                                     |       |
|                              |       |                                                             |       |                                                     |       |
| Total   consideration transferred |       | **604.5**                                                        |       | **161.9**                                                |       |

 

The contingent consideration arrangement requires 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 30 September 2015 exceeds the enrolments as of 31 May 2015. This amount ($25.0 million) has been subsequently settled on 6 November 2015, therefore the carrying value is equal to the fair value.

 

Acquisition-related costs have been recognized as an expense within the ‘exceptional expenses’ line item in the consolidated income statement.

 

F-33

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2**                               **Business combinations***(continued)*

 

***Subsidiaries acquired in the current period****(continued)*

 

***Fair value of assets acquired and liabilities recognized at the date of acquisition***

 
| ** **                                    | ** ** | **Sterling   International   Schools C   Corporation   $m** | ** ** | **British   International   Schools Group   $m** | ** ** | **Total   $m** | ** ** |
|-----------------------------------------------|------------|------------------------------------------------------------------|------------|-------------------------------------------------------|------------|----------------|------------|
| **Non-current   assets**                      |       |                                                             |       |                                                  |       |           |       |
| Brand (see note   12)                         |       | 152.7                                                            |       | —                                                |       | 152.7          |       |
| Customer   relationships (see note 12)        |       | 34.6                                                             |       | 34.3                                                  |       | 68.9           |       |
| IT Software (see   note 12)                   |       | 0.3                                                              |       | 0.2                                                   |       | 0.5            |       |
| Property, plant   and equipment (see note 11) |       | 284.8                                                            |       | 9.4                                                   |       | 294.2          |       |
| 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                    |       | (124.4                                                           | )          | (40.4                                                 | )          | (164.8         | )          |
| 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 14)      |       | (26.5                                                            | )          | (3.4                                                  | )          | (29.9          | )          |
| Other payables                                |       | (2.3                                                             | )          | (1.7                                                  | )          | (4.0           | )          |
| Finance lease   liabilities                   |       | (62.1                                                            | )          | —                                                |       | (62.1          | )          |
| Retirement   benefit obligation               |       | (13.8                                                            | )          | —                                                |       | (13.8          | )          |
|                                          |       |                                                             |       |                                                  |       |           |       |
|                                          |       | 288.0                                                            |       | 28.7                                                  |       | 316.7          |       |

 

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.

 

The fair value of the acquired identifiable intangible assets of Sterling International Schools C Corporation and British International Schools Group, Vietnam (including Brand and Customer relationships, $288.0 million and $28.7 million respectively) is provisional, pending the final valuations for these assets.

 

British International Schools Group, Vietnam and Sterling International Schools C Corporation have only been provisionally determined at the end of the reporting period.

 

***Goodwill arising on acquisition***

 
| ** **                                             | ** ** | **Sterling   International   Schools C   Corporation   $m** | ** ** | **British   International   Schools Group   $m** | ** ** | **Total   $m** | ** ** |
|--------------------------------------------------------|------------|------------------------------------------------------------------|------------|-------------------------------------------------------|------------|----------------|------------|
| Consideration   transferred                            |       | 604.5                                                            |       | 161.9                                                 |       | 766.4          |       |
| Non-controlling   interest                             |       | 0.3                                                              |       | 2.9                                                   |       | 3.2            |       |
| Less: fair value   of identifiable net assets acquired |       | (288.0                                                           | )          | (28.7                                                 | )          | (316.7         | )          |
|                                                   |       |                                                             |       |                                                  |       |           |       |
| Goodwill arising   on acquisition (see note 12)        |       | **316.8**                                                        |       | **136.1**                                             |       | **452.9**      |       |

 

F-34

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2**                               **Business combinations***(continued)*

 

***Subsidiaries acquired in the current period****(continued)*

 

***Fair value of assets acquired and liabilities recognized at the date of acquisition****(continued)*

 

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.

 

The non-controlling interest relates to Camplife Limited, a subsidiary, where the Group has acquired a 50.5% interest.

 

***Net cash outflow on acquisition of subsidiaries***

 
| ** **                                 | ** ** | **Total   $m** | ** ** |
|--------------------------------------------|------------|----------------|------------|
|                                       |       |           |       |
| Consideration   paid in cash               |       | 689.7          |       |
| Less: cash and   cash equivalents acquired |       | (42.6          | )          |
|                                       |       |           |       |
|                                       |       | **647.1**      |       |

 

***Impact of acquisitions on the results of the Group***

 

Included in the profit for the year is a $1.8 million profit and a loss of $12.0 million attributable to the British International Schools Group, Vietnam and Sterling International Schools C Corporation respectively. Revenue for the year is $35.2 million attributable to the British International Schools Group, Vietnam and $12.7 million attributable to Sterling International Schools C Corporation. The full year impact of the British International Schools Group, Vietnam and Sterling International Schools C Corporation acquisitions would have been $53.1 million and $219.6 million on revenue and $3.2 million and $4.4 million on profit respectively.

 

Had these business combinations been effected at 1 September 2014, the revenue of the Group from continuing operations would have been $801.8 million, and the profit for the year from continuing operations would have been $26.5 million. The Directors consider these unaudited ‘pro-forma’ numbers to represent an approximate measure of the performance of the combined Group on an annualized basis and to provide a reference point for comparison in future periods.

 

In determining the unaudited ‘pro-forma’ amounts of the Group had these acquisitions been effected at the beginning of the current year, the Directors have assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 September 2014.

 

F-35

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**3**                 **S****egmental****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 / South East Asia (“ME/SEA”) — United Arab Emirates, Qatar, Thailand, Singapore, Cambodia, Vietnam; and

North America — United States of America, Mexico

 

·                                Other — being the learning services division and Central & Regional head office costs.

 

The CODM uses revenue and Adjusted EBITDA before exceptional items (“Adjusted EBITDA”), 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 items & other management exceptional items, exchange gain/(loss) and 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 31 August 2013** | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME / SEA   $m** | ** ** | **North   America   $m** | ** ** | **Other   $m** | ** ** | **Total   $m** | ** ** |
|------------------------------------|------------|----------------|------------|-----------------|------------|-----------------------------|------------|--------------------------|------------|----------------|------------|----------------|------------|
|                               |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Revenue                            |       | 137.7          |       | 115.8           |       | 33.9                        |       | 7.9                      |       | 28.4           |       | 323.7          |       |
|                               |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Adjusted EBITDA                    |       | 66.8           |       | 22.7            |       | 5.9                         |       | 0.3                      |       | (16.2          | )          | 79.5           |       |
|                               |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Adjusted EBITDA   margin           |       | 48.5           | %          | 19.6            | %          | 17.4                        | %          | 3.8                      | %          | (57.0          | )%         | 24.6           | %          |

 
| **Year ended 31 August 2014** | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME / SEA   $m** | ** ** | **North   America   $m** | ** ** | **Other   $m** | ** ** | **Total   $m** | ** ** |
|------------------------------------|------------|----------------|------------|-----------------|------------|-----------------------------|------------|--------------------------|------------|----------------|------------|----------------|------------|
|                               |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Revenue                            |       | 165.6          |       | 136.0           |       | 86.0                        |       | 68.8                     |       | 18.2           |       | 474.6          |       |
|                               |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Adjusted EBITDA                    |       | 78.4           |       | 26.0            |       | 22.2                        |       | 23.2                     |       | (22.4          | )          | 127.4          |       |
|                               |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Adjusted EBITDA   margin           |       | 47.3           | %          | 19.1            | %          | 25.8                        | %          | 33.7                     | %          | (123.1         | )%         | 26.8           | %          |

 

F-36

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**3**                 **S****egmental****reporting***(continued)*

 
| **Year   ended 31 August 2015** | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME / SEA   $m** | ** ** | **North   America   $m** | ** ** | **Other   $m** | ** ** | **Total   $m** | ** ** |
|--------------------------------------|------------|----------------|------------|-----------------|------------|-----------------------------|------------|--------------------------|------------|----------------|------------|----------------|------------|
|                                 |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| **Revenue**                          |       | **183.2**      |       | **133.3**       |       | **164.1**                   |       | **82.6**                 |       | **13.8**       |       | **577.0**      |       |
|                                 |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| **Adjusted   EBITDA**                |       | **84.9**       |       | **17.1**        |       | **39.6**                    |       | **22.6**                 |       | **(30.5**      | **)**      | **133.7**      |       |
|                                 |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| **Adjusted   EBITDA margin**         |       | **46.3**       | **%**      | **12.8**        | **%**      | **24.1**                    | **%**      | **27.4**                 | **%**      | **(221.0**     | **)%**     | **23.2**       | **%**      |

 

The parent entity is domiciled in the Cayman Islands and did not generate external revenue during the years presented.

 

**Reconciliation of Adjusted EBITDA to profit after tax**

 
| **2013**                                                                         | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME   /SEA   $m** | ** ** | **North   America   $m** | ** ** | **Others   $m** | ** ** | **Total   $m** | ** ** |
|----------------------------------------------------------------------------------|------------|----------------|------------|-----------------|------------|--------------------|------------|--------------------------|------------|-----------------|------------|----------------|------------|
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Adjusted   EBITDA**                                                            |       | 66.8           |       | 22.7            |       | 5.9                |       | 0.3                      |       | (16.2           | )          | 79.5           |       |
| Adjustments:                                                                     |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| Exceptional   items (see note 4)                                                 |       | 0.0            |       | (2.1            | )          | (2.1               | )          | (0.9                     | )          | (12.6           | )          | (17.7          | )          |
| Other management   exceptional items *                                           |       | —         |       | —          |       | —             |       | —                   |       | (3.3            | )          | (3.3           | )          |
| Exchange   (loss)/gain                                                           |       | (0.2           | )          | (0.1            | )          | 0.3                |       | 0.8                      |       | 3.2             |       | 4.0            |       |
| Loss on disposal   of property, plant and equipment                              |       | (0.0           | )          | (0.0            | )          | (0.0               | )          | (0.0                     | )          | (0.1            | )          | (0.1           | )          |
| Depreciation                                                                     |       | (4.5           | )          | (3.8            | )          | (2.2               | )          | (0.7                     | )          | (0.5            | )          | (11.7          | )          |
| Amortization                                                                     |       | —         |       | (0.0            | )          | (0.0               | )          | (0.0                     | )          | (5.7            | )          | (5.7           | )          |
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Operating   profit/(loss)**                                                    |       | 62.1           |       | 16.7            |       | 1.9                |       | (0.5                     | )          | (35.2           | )          | 45.0           |       |
| Finance income                                                                   |       | 1.9            |       | 0.3             |       | 0.0                |       | 0.0                      |       | 0.1             |       | 2.3            |       |
| Finance expense                                                                  |       | (1.0           | )          | (0.0            | )          | —             |       | —                   |       | (50.3           | )          | (51.3          | )          |
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Profit/(loss)   before tax**                                                   |       | 63.0           |       | 17.0            |       | 1.9                |       | (0.5                     | )          | (85.4           | )          | (4.0           | )          |
| Tax                                                                              |       | (13.5          | )          | (7.5            | )          | (0.1               | )          | 2.2                      |       | (0.4            | )          | (19.3          | )          |
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Profit/(loss)   for the year attributable to equity holders of the****Parent** |       | 49.5           |       | 9.5             |       | 1.8                |       | 1.7                      |       | (85.8           | )          | (23.3          | )          |

 

----

* This amount includes a management fees of $3.3 million payable. These costs 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.

 

F-37

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**3**                 **S****egmental****reporting***(continued)*

 

**Reconciliation of Adjusted EBITDA to profit after tax***(continued)*

 
| **2014**                                                                         | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME   /SEA   $m** | ** ** | **North   America   $m** | ** ** | **Others   $m** | ** ** | **Total   $m** | ** ** |
|----------------------------------------------------------------------------------|------------|----------------|------------|-----------------|------------|--------------------|------------|--------------------------|------------|-----------------|------------|----------------|------------|
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Adjusted   EBITDA**                                                            |       | 78.4           |       | 26.0            |       | 22.2               |       | 23.2                     |       | (22.4           | )          | 127.4          |       |
| Adjustments:                                                                     |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| Exceptional   items (see note 4)                                                 |       | (0.1           | )          | (1.2            | )          | 13.3               |       | (0.3                     | )          | (111.9          | )          | (100.2         | )          |
| Other management   exceptional items *                                           |       | (1.7           | )          | —          |       | (2.7               | )          | —                   |       | (4.1            | )          | (8.5           | )          |
| Exchange   (loss)/gain                                                           |       | (0.0           | )          | (0.1            | )          | (0.4               | )          | (0.0                     | )          | 4.5             |       | 4.0            |       |
| Loss on disposal   of property, plant and equipment                              |       | (0.1           | )          | (0.0            | )          | (0.0               | )          | —                   |       | —          |       | (0.1           | )          |
| Depreciation                                                                     |       | (8.6           | )          | (4.9            | )          | (4.9               | )          | (3.7                     | )          | (1.3            | )          | (23.4          | )          |
| Amortization                                                                     |       | (0.0           | )          | (0.1            | )          | (0.0               | )          | (0.1                     | )          | (10.2           | )          | (10.4          | )          |
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Operating   profit/(loss)**                                                    |       | 67.9           |       | 19.7            |       | 27.5               |       | 19.1                     |       | (145.4          | )          | (11.2          | )          |
| Finance income                                                                   |       | 1.7            |       | 0.2             |       | 0.1                |       | 0.0                      |       | 0.0             |       | 2.0            |       |
| Finance expense                                                                  |       | (0.4           | )          | (0.3            | )          | (0.0               | )          | (0.0                     | )          | (54.8           | )          | (55.5          | )          |
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Profit/(loss)   before tax**                                                   |       | 69.2           |       | 19.6            |       | 27.6               |       | 19.1                     |       | (200.2          | )          | (64.7          | )          |
| Tax                                                                              |       | (15.2          | )          | (4.8            | )          | (1.6               | )          | (2.0                     | )          | (2.1            | )          | (25.7          | )          |
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Profit/(loss)   for the year attributable to equity holders of the****Parent** |       | 54.0           |       | 14.8            |       | 26.0               |       | 17.1                     |       | (202.3          | )          | (90.4          | )          |

 

----

* This amount includes a share based payment charges of $3.1 million, school pre-opening costs of $4.1 million and management fees of $1.2 million payable. These costs 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.

 
| **2015**                                                                         | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME   /SEA   $m** | ** ** | **North   America   $m** | ** ** | **Others   $m** | ** ** | **Total   $m** | ** ** |
|----------------------------------------------------------------------------------|------------|----------------|------------|-----------------|------------|--------------------|------------|--------------------------|------------|-----------------|------------|----------------|------------|
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Adjusted   EBITDA**                                                            |       | **84.9**       |       | **17.1**        |       | **39.6**           |       | **22.6**                 |       | **(30.5**       | **)**      | **133.7**      |       |
| Adjustments:                                                                     |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| Exceptional   items (see note 4)                                                 |       | **(0.0**       | **)**      | **(0.7**        | **)**      | **(0.1**           | **)**      | **(0.4**                 | **)**      | **(17.6**       | **)**      | **(18.8**      | **)**      |
| Other management   exceptional items *                                           |       | **(1.4**       | **)**      | **(1.7**        | **)**      | **(0.3**           | **)**      | **(3.7**                 | **)**      | **(2.2**        | **)**      | **(9.3**       | **)**      |
| Financial   liabilities at fair value through profit and loss                    |       | **—**     |       | **—**      |       | **—**         |       | **—**               |       | **(3.0**        | **)**      | **(3.0**       | **)**      |
| Exchange gain/(loss)                                                             |       | **0.2**        |       | **1.2**         |       | **(0.1**           | **)**      | **0.0**                  |       | **2.6**         |       | **3.9**        |       |
| (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**        | **)**      | **(9.6**           | **)**      | **(5.9**                 | **)**      | **(0.5**        | **)**      | **(34.6**      | **)**      |
| Amortization                                                                     |       | **(0.6**       | **)**      | **(3.0**        | **)**      | **(6.2**           | **)**      | **(3.0**                 | **)**      | **(1.1**        | **)**      | **(13.9**      | **)**      |
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Operating   profit/(loss)**                                                    |       | **71.3**       |       | **6.1**         |       | **23.3**           |       | **9.6**                  |       | **(52.6**       | **)**      | **57.7**       |       |
| Finance income                                                                   |       | **1.1**        |       | **0.1**         |       | **0.6**            |       | **0.1**                  |       | **0.9**         |       | **2.8**        |       |
| Finance expense                                                                  |       | **(0.0**       | **)**      | **(0.8**        | **)**      | **(0.1**           | **)**      | **(0.0**                 | **)**      | **(38.8**       | **)**      | **(39.7**      | **)**      |
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Profit/(loss)   before tax**                                                   |       | **72.4**       |       | **5.4**         |       | **23.8**           |       | **9.7**                  |       | **(90.5**       | **)**      | **20.8**       |       |
| Tax                                                                              |       | **(12.4**      | **)**      | **(8.0**        | **)**      | **(2.0**           | **)**      | **8.8**                  |       | **1.4**         |       | **(12.2**      | **)**      |
|                                                                             |       |           |       |            |       |               |       |                     |       |            |       |           |       |
| **Profit/(loss)   for the year attributable to equity holders of the****parent** |       | **60.0**       |       | **(2.6**        | **)**      | **21.8**           |       | **18.5**                 |       | **(89.1**       | **)**      | **8.6**        |       |

 

----

* This amount includes share based payment charges of $2.8 million, school pre-opening costs of $4.0 million, roll out of The Julliard-Nord Anglia Performing Arts Program $0.7 million and costs associated with expatriate taxes levied on teacher salaries of $1.1 million. These costs 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.

 

F-38

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**3**                 **S****egmental****reporting***(continued)*

 

**Segment assets**

 
| **At 31 August 2013** | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME / SEA   $m** | ** ** | **North   America   $m** | ** ** | **Total   $m** | ** ** |
|--------------------------------------|------------|----------------|------------|-----------------|------------|-----------------------------|------------|--------------------------|------------|----------------|------------|
|                                 |       |           |       |            |       |                        |       |                     |       |           |       |
| Total segment   non-current assets   |       | 326.1          |       | 230.4           |       | 101.8                       |       | 237.4                    |       | 895.7          |       |

 
| **At 31 August 2014** | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME / SEA   $m** | ** ** | **North   America   $m** | ** ** | **Total   $m** | ** ** |
|--------------------------------------|------------|----------------|------------|-----------------|------------|-----------------------------|------------|--------------------------|------------|----------------|------------|
|                                 |       |           |       |            |       |                        |       |                     |       |           |       |
| Total segment   non-current assets   |       | 343.3          |       | 235.4           |       | 157.3                       |       | 236.2                    |       | 972.2          |       |

 
| **At 31 August 2015** | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME / SEA   $m** | ** ** | **North   America   $m** | ** ** | **Total   $m** | ** ** |
|--------------------------------------|------------|----------------|------------|-----------------|------------|-----------------------------|------------|--------------------------|------------|----------------|------------|
|                                 |       |           |       |            |       |                        |       |                     |       |           |       |
| Total segment   non-current assets   |       | **427.1**      |       | **544.9**       |       | **341.2**                   |       | **660.8**                |       | **1,974.0**    |       |

 

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 31 August 2013**                             | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME / SEA   $m** | ** ** | **North   America   $m** | ** ** | **Other   $m** | ** ** | **Total   $m** | ** ** |
|-------------------------------------------------------------------------------|------------|----------------|------------|-----------------|------------|-----------------------------|------------|--------------------------|------------|----------------|------------|----------------|------------|
|                                                                          |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Capital   expenditure (including acquisitions through business combinations): |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Property, plant   and equipment                                               |       | 14.7           |       | 16.5            |       | 12.0                        |       | 29.2                     |       | 1.1            |       | 73.5           |       |
| Goodwill and   other intangible assets                                        |       | 27.9           |       | 12.3            |       | 56.8                        |       | 195.9                    |       | 9.5            |       | 302.4          |       |
| Depreciation of   tangible assets                                             |       | (4.5           | )          | (3.8            | )          | (2.2                        | )          | (0.7                     | )          | (0.5           | )          | (11.7          | )          |
| Amortization of   intangible assets                                           |       | —         |       | (0.0            | )          | (0.0                        | )          | (0.0                     | )          | (5.7           | )          | (5.7           | )          |
| Exceptional   items (see note 4)                                              |       | 0.0            |       | (2.1            | )          | (2.1                        | )          | (0.9                     | )          | (12.6          | )          | (17.7          | )          |

 
| **Year ended 31 August 2014**                             | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME / SEA   $m** | ** ** | **North   America   $m** | ** ** | **Other   $m** | ** ** | **Total   $m** | ** ** |
|-------------------------------------------------------------------------------|------------|----------------|------------|-----------------|------------|-----------------------------|------------|--------------------------|------------|----------------|------------|----------------|------------|
|                                                                          |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Capital   expenditure (including acquisitions through business combinations): |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Property, plant   and equipment                                               |       | 31.3           |       | 11.5            |       | 16.1                        |       | 6.0                      |       | 0.6            |       | 65.5           |       |
| Goodwill and   other intangible assets                                        |       | 0.0            |       | 0.3             |       | 47.6                        |       | 0.0                      |       | 0.2            |       | 48.1           |       |
| Depreciation of   tangible assets                                             |       | (8.6           | )          | (4.9            | )          | (4.9                        | )          | (3.7                     | )          | (1.3           | )          | (23.4          | )          |
| Amortization of   intangible assets                                           |       | (0.0           | )          | (0.1            | )          | (0.0                        | )          | (0.1                     | )          | (10.2          | )          | (10.4          | )          |
| Exceptional   items (see note 4)                                              |       | (0.1           | )          | (1.2            | )          | 13.3                        |       | (0.3                     | )          | (111.9         | )          | (100.2         | )          |

 

F-39

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**3**                 **S****egmental****reporting***(continued)*

 

**Other segment information***(continued)*

 
| **Year ended 31 August 2015**                             | ** ** | **China   $m** | ** ** | **Europe   $m** | ** ** | **ME / SEA   $m** | ** ** | **North   America   $m** | ** ** | **Other   $m** | ** ** | **Total   $m** | ** ** |
|-------------------------------------------------------------------------------|------------|----------------|------------|-----------------|------------|-----------------------------|------------|--------------------------|------------|----------------|------------|----------------|------------|
|                                                                          |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Capital   expenditure (including acquisitions through business combinations): |       |           |       |            |       |                        |       |                     |       |           |       |           |       |
| Property, plant   and equipment                                               |       | **22.0**       |       | **81.5**        |       | **22.2**                    |       | **227.5**                |       | **1.3**        |       | **354.5**      |       |
| Goodwill and   other intangible assets                                        |       | **76.4**       |       | **231.3**       |       | **171.2**                   |       | **197.0**                |       | **1.1**        |       | **677.0**      |       |
| Depreciation of   tangible assets                                             |       | **(11.7**      | **)**      | **(6.9**        | **)**      | **(9.6**                    | **)**      | **(5.9**                 | **)**      | **(0.5**       | **)**      | **(34.6**      | **)**      |
| Amortization of   intangible assets                                           |       | **(0.6**       | **)**      | **(3.0**        | **)**      | **(6.2**                    | **)**      | **(3.0**                 | **)**      | **(1.1**       | **)**      | **(13.9**      | **)**      |
| Exceptional   items (see note 4)                                              |       | **(0.0**       | **)**      | **(0.7**        | **)**      | **(0.1**                    | **)**      | **(0.4**                 | **)**      | **(17.6**      | **)**      | **(18.8**      | **)**      |

 

F-40

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**4**                 **Exceptional****expenses**

 
| ** **                                                                 | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|----------------------------------------------------------------------------|------------|----------|------------|----------|------------|------------|------------|
| ** **                                                                 | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**     | ** ** |
| **Exceptional   administrative expenses**                                  |       |     |       |     |       |       |       |
|                                                                       |       |     |       |     |       |       |       |
| a   Corporate restructure                                        |       | (2.7     | )          | (3.2     | )          | **(0.1**   | **)**      |
| b   Payments to key management                                   |       | (1.1     | )          | —   |       | **—** |       |
| c   Bond issuance, redemption expense and commitment   fees, net |       | (0.8     | )          | (89.9    | )          | **(10.0**  | **)**      |
| d   Acquisition and integration related costs                    |       | (13.1    | )          | (5.5     | )          | **(7.7**   | **)**      |
| e   Others, net                                                  |       | —   |       | (1.6     | )          | **(1.0**   | **)**      |
|                                                                       |       |     |       |     |       |       |       |
|                                                                       |       | (17.7    | )          | (100.2   | )          | **(18.8**  | **)**      |

 

----

| a      | Corporate   restructure in the current and prior year is in relation to integration costs   incurred by subsidiaries post acquisition as well as closure of the Learning   Services business in the Middle East and in the UK at contract completion.   Included within the prior year 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”).

 

Costs   in 2013 relate to redundancy, staff replacements for subsidiary integration   as well as legal fees and office closures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| b      | The   $1.1 million cost incurred during 2013 was a tax indemnification due to the   vendor of Collège Champittet on condition of meeting certain revenue criteria   post acquisition. As this criteria was met outside the measurement period, it   has been appropriately recognized through the profit and loss. This will be   settled by equal instalments over five years with the first due in   August 2015.

 

None of the costs relating   to this transaction are considered to be tax deductible. Full details of this   arrangement are documented in note 27, Related party transactions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| c      | 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   has matured during the year and is no longer available to the Group.

 

In   2014, the major elements of the $89.9 million exceptional expense in the   prior year were the $77.0 million bond redemption cost arising upon the early   redemption of our $490.0 million 10.25% senior secured notes due 2017 and our   $150.0 million 8.50% / 9.50% senior PIK toggle notes due 2018, which were all   fully redeemed as of 14 April 2014. The remaining $12.9 million was the   release of capitalized costs in connection with these notes.

 

A   $0.8 million exceptional expense in 2013 was recognized in relation to a bond   issuance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| d      | During   the year, the Group acquired two new subsidiaries (Sterling International   Schools C Corporation operating in three continents and British International   Schools Group, Vietnam) to complement its existing portfolio of Premium   Schools, as detailed in note 2, Business Combinations. The $7.7 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.

 

Acquisition   related costs in 2013 were due to the business combinations of WCL Group of   companies, United Kingdom and operating in three continents; The British   School of Guangzhou, China and Saint Andrews International School, Bangkok,   Thailand, 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 2011 and 2012.Additionally, the charge includes legal   fees and fees payable to advisors associated with the common control   transaction of British International School LLC, United Arab Emirates. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| e      | 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, 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).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

 

F-41

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**5**                 **Other Losses**

 
| ** **                                                                                                                                                                                            | ** ** | **2013**   | ** ** | **2014** | ** ** | **2015** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|----------|------------|----------|------------|
| ** **                                                                                                                                                                                            | ** ** | **$m**     | ** ** | **$m**   | ** ** | **$m**   | ** ** |
|                                                                                                                                                                                                  |       |       |       |     |       |     |       |
| Financial assets   at fair value through profit or loss:                                                                                                                                              |       |       |       |     |       |     |       |
| **-**                              Fair value losses |       | **—** |       | —   |       | **3.0**  |       |

 

**6**                 **Expenses and auditors’ remuneration**

 

*Included in the profit/(loss) are the following:*

 
| ** **                                                                | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**  | ** ** |
|---------------------------------------------------------------------------|------------|----------|------------|----------|------------|-----------|------------|
| ** **                                                                | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**    | ** ** |
|                                                                      |       |     |       |     |       |      |       |
| Staff costs (see   note 7)                                                |       | 138.4    |       | 227.7    |       | **283.0** |       |
| Foreign exchange   gain                                                   |       | (4.0     | )          | (4.0     | )          | **(3.9**  | **)**      |
| Loss on disposal   of property, plant and equipment and intangible assets |       | 0.1      |       | 0.1      |       | **0.3**   |       |
| Operating lease   rentals:                                                |       |     |       |     |       |      |       |
| Land and   buildings                                                      |       | 31.9     |       | 42.2     |       | **57.4**  |       |
| Other                                                                     |       | 0.9      |       | 0.5      |       | **0.7**   |       |
| Depreciation in   cost of sales                                           |       | 11.3     |       | 21.4     |       | **33.9**  |       |
| Depreciation                                                              |       | 0.4      |       | 2.0      |       | **0.7**   |       |
| Amortization of   intangible assets                                       |       | 5.7      |       | 10.4     |       | **13.9**  |       |

 

*Auditors’ remuneration:*

 
| ** **                                                                                                       | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
|------------------------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| ** **                                                                                                       | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**   | ** ** |
|                                                                                                             |       |     |       |     |       |     |       |
| Fees payable to   Company’s auditor for the audit of parent Company and consolidated financial   statements |       | 0.4      |       | 0.4      |       | **0.6**  |       |
|                                                                                                             |       |     |       |     |       |     |       |
| ***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                                                      |       | 0.2      |       | 0.5      |       | **1.4**  |       |
| Tax advisory   services                                                                                          |       | —   |       | 0.0      |       | **0.3**  |       |
| All other   services                                                                                             |       | 0.6      |       | 4.2      |       | **1.6**  |       |

 

**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** | ** ** |
|----------------------------------|------------|-----------------------------------|------------|
| ** **                       | ** ** | **2013**                          | ** ** | **2014** | ** ** | **2015** | ** ** |
|                             |       |                              |       |   |   |   |   |
| Administration   and management  |       | 778                               |       | 1,173 |   | **2,165** |   |
| Teaching                         |       | 1,738                             |       | 2,616 |   | **4,161** |   |
| Advisors and   guidance officers |       | 68                                |       | 39 |   | **65** |   |
|                             |       |                              |       |   |   |   |   |
|                             |       | 2,584                             |       | 3,828 |   | **6,391** |   |

 

F-42

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**7**              **Staff numbers and costs***(continued)*

 

The aggregate employee benefit expense of these persons was as follows:

 
| ** **                                                  | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**  | ** ** |
|-------------------------------------------------------------|------------|----------|------------|----------|------------|-----------|------------|
| ** **                                                  | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**    | ** ** |
|                                                        |       |     |       |     |       |      |       |
| Wages and   salaries                                        |       | 124.7    |       | 206.3    |       | **256.5** |       |
| Share based   payments (see note 20)                        |       | 0.1      |       | 3.0      |       | **2.8**   |       |
| Social security   costs                                     |       | 11.0     |       | 15.4     |       | **19.3**  |       |
| Contributions to   defined contribution plans (see note 20) |       | 1.0      |       | 1.2      |       | **2.1**   |       |
| Expenses related   to defined benefit plans (see note 20)   |       | 1.6      |       | 1.8      |       | **2.3**   |       |
|                                                        |       |     |       |     |       |      |       |
|                                                        |       | 138.4    |       | 227.7    |       | **283.0** |       |

 

**8**                 **Key management personnel**

 
| ** **                                               | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
|----------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| ** **                                               | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**   | ** ** |
|                                                     |       |     |       |     |       |     |       |
| Fee, salaries   and other short term employment benefits |       | 6.3      |       | 6.7      |       | **7.9**  |       |
| Other benefits                                           |       | 0.3      |       | 0.2      |       | **0.3**  |       |
|                                                     |       |     |       |     |       |     |       |
|                                                     |       | 6.6      |       | 6.9      |       | **8.2**  |       |

 

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.

 
| ** **                                                                                                                                    | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|------------|------------|
| Number of key   management personnel accruing benefits under:                                                                                 |       |     |       |     |       |       |       |
| -                    Defined   benefit schemes |       | 1        |       | 1        |       | **—** |       |

 

F-43

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**9**                 **Finance income and expense**

 

**Recognized in profit or loss**

 
| ** **             | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
|------------------------|------------|----------|------------|----------|------------|----------|------------|
| ** **             | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**   | ** ** |
|                   |       |     |       |     |       |     |       |
| Bank interest          |       | 2.3      |       | 2.0      |       | **2.8**  |       |
|                   |       |     |       |     |       |     |       |
| Total finance   income |       | 2.3      |       | 2.0      |       | **2.8**  |       |

 
| ** **                                                                           | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|--------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|------------|------------|
| ** **                                                                           | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**     | ** ** |
|                                                                                 |       |     |       |     |       |       |       |
| Net loss on   financial instruments designated as fair value through profit or loss: |       |     |       |     |       |       |       |
| Derivative   financial instruments                                                   |       | 0.0      |       | —   |       | **—** |       |
| Total interest   expense on financial liabilities measured at amortized cost:        |       |     |       |     |       |       |       |
| Term loan due   2021                                                                 |       | —   |       | 10.9     |       | **31.7**   |       |
| 5.75% Senior   secured notes due 2021                                                |       | —   |       | —   |       | **2.3**    |       |
| 10.25% Senior   secured notes due 2017                                               |       | 37.9     |       | 32.2     |       | **—** |       |
| 8.50% Senior PIK   toggle notes due 2018                                             |       | 8.5      |       | 8.3      |       | **—** |       |
| Bank loans and   overdrafts                                                          |       | 4.5      |       | 3.2      |       | **2.1**    |       |
| Interest on   defined benefit pension plan obligation (see note 20)                  |       | 0.4      |       | 0.9      |       | **0.8**    |       |
| Discount unwind   on deferred consideration                                          |       | —   |       | —   |       | **2.3**    |       |
| Finance lease   liabilities                                                          |       | —   |       | —   |       | **0.5**    |       |
|                                                                                 |       |     |       |     |       |       |       |
| Total finance   expense                                                              |       | 51.3     |       | 55.5     |       | **39.7**   |       |
|                                                                                 |       |     |       |     |       |       |       |
| Net finance   expense                                                                |       | 49.0     |       | 53.5     |       | **36.9**   |       |

 

F-44

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**10**          **Income tax expense**

 

**Recognized in the****consolidated****income statement**

 
| ** **                                          | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**  | ** ** |
|-----------------------------------------------------|------------|----------|------------|----------|------------|-----------|------------|
| ** **                                          | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**    | ** ** |
| Current tax   expense                               |       |     |       |     |       |      |       |
| Overseas current   tax charge                       |       | 20.8     |       | 21.3     |       | **20.4**  |       |
| Adjustment for   prior years overseas tax charge    |       | 0.2      |       | 0.7      |       | **2.0**   |       |
|                                                |       |     |       |     |       |      |       |
| Current tax   expense                               |       | 21.0     |       | 22.0     |       | **22.4**  |       |
|                                                |       |     |       |     |       |      |       |
| Deferred tax   expense                              |       |     |       |     |       |      |       |
| Origination and   reversal of temporary differences |       | (1.5     | )          | —   |       | **(10.0** | **)**      |
| Adjustment in   respect of prior years              |       | (0.2     | )          | 3.7      |       | **(0.2**  | **)**      |
|                                                |       |     |       |     |       |      |       |
| Deferred tax   expense                              |       | (1.7     | )          | 3.7      |       | **(10.2** | **)**      |
|                                                |       |     |       |     |       |      |       |
| Total tax   expense                                 |       | 19.3     |       | 25.7     |       | **12.2**  |       |

 

**Reconciliation of effective tax rate**

 

The tax assessed for the period differs from the standard rate of Corporation tax in China of 25.00% (2014 & 2013: 25.00%) per the explanation below:

 
| ** **                                                                                                  | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|-------------------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|------------|------------|
| ** **                                                                                                  | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**     | ** ** |
|                                                                                                        |       |     |       |     |       |       |       |
| (Loss)/profit   before tax                                                                                  |       | (4.0     | )          | (64.7    | )          | **20.8**   |       |
|                                                                                                        |       |     |       |     |       |       |       |
| Tax using a tax   rate of 25.00% (2014 - 25.00%)                                                            |       | (1.0     | )          | (16.2    | )          | **5.2**    |       |
| Effect of tax   rates in foreign jurisdictions                                                              |       | 3.2      |       | 12.3     |       | **1.8**    |       |
| Non-deductible   expenses/(non-assessable income)                                                           |       | 5.5      |       | 9.4      |       | **(6.9**   | **)**      |
| Withholding tax   paid or payable on overseas dividends and other income for which no relief is   available |       | 5.8      |       | 6.0      |       | **1.0**    |       |
| Timing   difference for which no deferred tax was recognized                                                |       | 0.6      |       | —   |       | **—** |       |
| Losses for which   no deferred tax asset was recognized                                                     |       | 5.2      |       | 9.8      |       | **9.9**    |       |
| Utilization of   losses brought forward not recognized                                                      |       | —   |       | —   |       | **(0.4**   | **)**      |
| Prior year   adjustment                                                                                     |       | —   |       | 4.4      |       | **1.6**    |       |
|                                                                                                        |       |     |       |     |       |       |       |
| Total tax   expense                                                                                         |       | 19.3     |       | 25.7     |       | **12.2**   |       |
|                                                                                                        |       |     |       |     |       |       |       |
| Tax charged to   other comprehensive income*                                                                |       | (0.2     | )          | (0.2     | )          | **(0.9**   | **)**      |

 

----

* Included within Actuarial losses on defined benefit pension schemes

 

F-45

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(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.

 

We have 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 20.58%, as we believe 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 deferred tax assets of $65.7 million (2014 - $69.9 million; 2013 - $35.2 million). This includes an un-provided deferred tax asset of $48.3 million (2014 - $60.8 million; 2013 - $28.3 million) which relates to UK losses which have no expiry date for which relief is not anticipated to be available in the foreseeable future. It also includes an un-provided deferred tax asset of $7.7 million (2014 - $4.1 million; 2013 - $3.2 million) in relation to the deficit in the UK pension scheme and an un-provided deferred tax asset of $9.7 million (2014 - $4.9 million; 2013 - $3.7 million) which relates to losses in overseas entities.

 

The Group is subject to income taxes in numerous jurisdictions. 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.

 

There are undistributed earnings of US $48.5 million (2014 - $38.6 million; 2013 - $26.3 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 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.

 

On 28 May 2015, it was noted that from this date management and control of the company began to be exercised from the UK. As such the Company became UK tax resident and chargeable to UK corporation tax from this date onwards.

 

F-46

----

 

Table of Contents

** **

**Notes to the financial statements for the year ended 31 August 2015*(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 1   September 2012            |       | 35.5                          |       | 11.9                             |       | 7.5                      |       | 1.3                  |       | —                            |       | 56.2      |       |
| Acquisitions   through business combinations  |       | 31.5                          |       | 4.5                              |       | 2.7                      |       | 0.0                  |       | 8.9                               |       | 47.6      |       |
| Additions                                     |       | 11.4                          |       | 6.0                              |       | 5.2                      |       | 0.2                  |       | 3.1                               |       | 25.9      |       |
| Disposals                                     |       | (0.4                          | )          | 0.0                              |       | (0.3                     | )          | (0.2                 | )          | —                            |       | (0.9      | )          |
| Transfers                                     |       | 4.4                           |       | 0.0                              |       | 0.0                      |       | —               |       | (4.4                              | )          | 0.0       |       |
| Effect of   movements in foreign exchange     |       | 1.3                           |       | 0.3                              |       | 0.3                      |       | 0.0                  |       | 0.0                               |       | 1.9       |       |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| Balance at 31   August 2013              |       | 83.7                          |       | 22.7                             |       | 15.4                     |       | 1.3                  |       | 7.6                               |       | 130.7     |       |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| Balance at 1   September 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 31   August 2014              |       | 106.8                         |       | 33.4                             |       | 22.7                     |       | 2.1                  |       | 26.1                              |       | 191.1     |       |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| Balance at 1   September 2014            |       | 106.8                         |       | 33.4                             |       | 22.7                     |       | 2.1                  |       | 26.1                              |       | 191.1     |       |
| Acquisitions   through business combinations  |       | 246.7                         |       | 12.8                             |       | 6.4                      |       | 1.9                  |       | 26.4                              |       | 294.2     |       |
| Additions                                     |       | 14.6                          |       | 15.8                             |       | 11.2                     |       | 1.4                  |       | 16.7                              |       | 59.7      |       |
| 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                 | )          | (0.7                              | )          | (12.4     | )          |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| Balance at 31   August 2015              |       | 383.0                         |       | 58.9                             |       | 37.4                     |       | 4.6                  |       | 44.6                              |       | 528.5     |       |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| **Accumulated   depreciation and impairment** |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| Balance at 1   September 2012            |       | 11.4                          |       | 4.8                              |       | 3.3                      |       | 0.6                  |       | —                            |       | 20.1      |       |
| Depreciation   charge for the year            |       | 4.8                           |       | 3.4                              |       | 3.3                      |       | 0.2                  |       | —                            |       | 11.7      |       |
| Disposals                                     |       | (0.1                          | )          | (0.2                             | )          | (0.2                     | )          | (0.1                 | )          | —                            |       | (0.6      | )          |
| Transfers                                     |       | —                        |       | 0.0                              |       | 0.0                      |       | —               |       | —                            |       | 0.0       |       |
| Effect of   movements in foreign exchange     |       | 0.7                           |       | 0.4                              |       | 0.2                      |       | 0.0                  |       | —                            |       | 1.3       |       |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| Balance at 31   August 2013              |       | 16.8                          |       | 8.4                              |       | 6.6                      |       | 0.7                  |       | —                            |       | 32.5      |       |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| Balance at 1   September 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 31 August 2014                |       | 26.9                          |       | 13.0                             |       | 10.1                     |       | 1.0                  |       | —                            |       | 51.0      |       |

 

F-47

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(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 1   September 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     |       | (2.2                          | )          | (0.3                             | )          | (0.9                     | )          | (0.1                 | )          | —                            |       | (3.5      | )          |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| Balance at 31   August 2015              |       | 40.4                          |       | 21.8                             |       | 15.4                     |       | 1.2                  |       | —                            |       | 78.8      |       |
| ** **                                    |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| **Net   book value**                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| At 31   August 2013                      |       | 66.9                          |       | 14.3                             |       | 8.8                      |       | 0.6                  |       | 7.6                               |       | 98.2      |       |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| At 31   August 2014                      |       | 79.9                          |       | 20.4                             |       | 12.6                     |       | 1.1                  |       | 26.1                              |       | 140.1     |       |
|                                          |       |                          |       |                             |       |                     |       |                 |       |                              |       |      |       |
| **At 31   August 2015**                  |       | **342.6**                     |       | **37.1**                         |       | **22.0**                 |       | **3.4**              |       | **44.6**                          |       | **449.7** |       |

 

Land and buildings and motor vehicles includes the following amounts where the Group is a lessee under a finance lease:

 
| ** **                       | ** ** | **2014**                         | ** ** | **2015**                | ** ** | **2014**   | ** ** | **2015** | ** ** |
|----------------------------------|------------|----------------------------------|------------|-------------------------|------------|------------|------------|----------|------------|
| ** **                       | ** ** | **Land and buildings** | ** ** | **Motor vehicles** | ** ** |
| ** **                       | ** ** | **$m**                           | ** ** | **$m**                  | ** ** | **$m**     | ** ** | **$m**   | ** ** |
| Cost-capitalized   finance lease |       | —                           |       | 47.2                    |       | —     |       | 1.1      |       |
| Accumulated   depreciation       |       | —                           |       | (0.4                    | )          | —     |       | (0.1     | )          |
|                             |       |                             |       |                    |       |       |       |     |       |
| **At 31   August**               |       | **—**                       |       | **46.8**                |       | **—** |       | **1.0**  |       |

 

The Group leases buildings under non-cancellable finance lease agreements. The lease terms are between 4 and 90 years, and ownership of the assets lies within the Group.

 

F-48

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**12**          **Intangible assets**

 
| ** **                                    | ** ** | **Goodwill** | ** ** | **Brand   name** | ** ** | **Customer   relations** | ** ** | **Contracts** | ** ** | **Website &   Intellectual   property** | ** ** | **Computer   software** | ** ** | **Total** | ** ** |
|-----------------------------------------------|------------|--------------|------------|------------------|------------|--------------------------|------------|---------------|------------|--------------------------------------------------|------------|-------------------------|------------|-----------|------------|
| ** **                                    | ** ** | **$m**       | ** ** | **$m**           | ** ** | **$m**                   | ** ** | **$m**        | ** ** | **$m**                                           | ** ** | **$m**                  | ** ** | **$m**    | ** ** |
| **Cost**                                      |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 1   September 2012            |       | 446.2        |       | 24.5             |       | 34.8                     |       | 0.7           |       | —                                           |       | 1.4                     |       | 507.6     |       |
| Acquisitions   through business combinations  |       | 230.6        |       | 31.5             |       | 36.9                     |       | —        |       | 2.6                                              |       | 0.5                     |       | 302.1     |       |
| Additions                                     |       | —       |       | —           |       | —                   |       | —        |       | —                                           |       | 0.3                     |       | 0.3       |       |
| Effect of   movements in foreign exchange     |       | 10.4         |       | 0.4              |       | 0.2                      |       | (0.1          | )          | 0.0                                              |       | (0.2                    | )          | 10.7      |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 31   August 2013              |       | 687.2        |       | 56.4             |       | 71.9                     |       | 0.6           |       | 2.6                                              |       | 2.0                     |       | 820.7     |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 1   September 2013            |       | 687.2        |       | 56.4             |       | 71.9                     |       | 0.6           |       | 2.6                                              |       | 2.0                     |       | 820.7     |       |
| Acquisitions   through business combinations  |       | 12.5         |       | 14.9             |       | 20.0                     |       | —        |       | —                                           |       | —                  |       | 47.4      |       |
| Additions                                     |       | —       |       | —           |       | —                   |       | —        |       | 0.4                                              |       | 0.3                     |       | 0.7       |       |
| Disposal                                      |       | —       |       | —           |       | —                   |       | —        |       | —                                           |       | (0.2                    | )          | (0.2      | )          |
| Effect of   movements in foreign exchange     |       | 1.9          |       | 0.5              |       | 0.6                      |       | —        |       | 0.0                                              |       | —                  |       | 3.0       |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 31   August 2014              |       | 701.6        |       | 71.8             |       | 92.5                     |       | 0.6           |       | 3.0                                              |       | 2.1                     |       | 871.6     |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 1   September 2014            |       | 701.6        |       | 71.8             |       | 92.5                     |       | 0.6           |       | 3.0                                              |       | 2.1                     |       | 871.6     |       |
| Acquisitions   through business combinations  |       | 452.9        |       | 152.7            |       | 68.9                     |       | —        |       | —                                           |       | 0.5                     |       | 675.0     |       |
| Additions                                     |       | —       |       | —           |       | —                   |       | —        |       | 0.3                                              |       | 1.7                     |       | 2.0       |       |
| Disposal                                      |       | —       |       | —           |       | —                   |       | —        |       | —                                           |       | (1.0                    | )          | (1.0      | )          |
| Effect of   movements in foreign exchange     |       | (40.6        | )          | (5.6             | )          | (6.5                     | )          | —        |       | (0.2                                             | )          | (0.0                    | )          | (52.9     | )          |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 31   August 2015              |       | 1,113.9      |       | 218.9            |       | 154.9                    |       | 0.6           |       | 3.1                                              |       | 3.3                     |       | 1,494.7   |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| **Accumulated   amortization and impairment** |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 1   September 2012            |       | 47.6         |       | —           |       | 4.3                      |       | 0.4           |       | —                                           |       | 0.2                     |       | 52.5      |       |
| Amortisation for   the year                   |       | —       |       | 0.3              |       | 4.4                      |       | 0.1           |       | 0.2                                              |       | 0.7                     |       | 5.7       |       |
| Disposals                                     |       | —       |       | —           |       | —                   |       | —        |       | —                                           |       | 0.0                     |       | 0.0       |       |
| Effect of   movements in foreign exchange     |       | (0.9         | )          | —           |       | (0.0                     | )          | (0.0          | )          | 0.0                                              |       | (0.0                    | )          | (0.9      | )          |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 31   August 2013              |       | 46.7         |       | 0.3              |       | 8.7                      |       | 0.5           |       | 0.2                                              |       | 0.9                     |       | 57.3      |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 1   September 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                                     |       | —       |       | —           |       | —                   |       | —        |       | —                                           |       | (0.2                    | )          | (0.2      | )          |
| Effect of   movements in foreign exchange     |       | 2.6          |       | —           |       | 0.0                      |       | —        |       | —                                           |       | —                  |       | 2.6       |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |      |       |
| Balance at 31   August 2014              |       | 49.3         |       | 1.1              |       | 16.6                     |       | 0.6           |       | 1.2                                              |       | 1.3                     |       | 70.1      |       |

 

F-49

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**12**                        **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 1   September 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                                     |       | —       |       | —           |       |                     |       | —        |       | —                                           |       | (1.0                    | )          | (1.0        | )          |
| Effect of   movements in foreign exchange     |       | (2.9         | )          | (0.1             | )          | (0.7                     | )          | —        |       | (0.1                                             | )          | 0.0                     |       | (3.8        | )          |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |        |       |
| Balance at 31   August 2015              |       | 46.4         |       | 2.3              |       | 26.9                     |       | 0.6           |       | 2.0                                              |       | 1.0                     |       | 79.2        |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |        |       |
| **Net   book value**                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |        |       |
| At 31   August 2013                      |       | 640.5        |       | 56.1             |       | 63.2                     |       | 0.1           |       | 2.4                                              |       | 1.1                     |       | 763.4       |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |        |       |
| At 31   August 2014                      |       | 652.3        |       | 70.7             |       | 75.9                     |       | 0.0           |       | 1.8                                              |       | 0.8                     |       | 801.5       |       |
|                                          |       |         |       |             |       |                     |       |          |       |                                             |       |                    |       |        |       |
| **At 31   August 2015**                  |       | **1,067.5**  |       | **216.6**        |       | **128.0**                |       | **0.0**       |       | **1.1**                                          |       | **2.3**                 |       | **1,415.5** |       |

 

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 2013 were as follows:

 
| ** **          | ** ** | **Carrying Value   of Goodwill   $m** | ** ** | **Discount Rate** | ** ** | **Long-Term   Growth Rate   (Average)** | ** ** | **Pupil Growth   (Over 5 Years)** | ** ** | **Utilization   (Average)** | ** ** |
|---------------------|------------|-------------------------------------------------|------------|------------------------|------------|----------------------------------------------|------------|--------------------------------------------------|------------|-----------------------------|------------|
| China               |       | 280.3                                           |       | 13.4                   | %          | 2.0                                          | %          | 19.5                                             | %          | 75.8                        | %          |
| Western Europe      |       | 91.5                                            |       | 13.4                   | %          | 1.5                                          | %          | 11.3                                             | %          | 87.3                        | %          |
| Eastern Europe      |       | 51.2                                            |       | 13.4                   | %          | 1.5                                          | %          | 11.3                                             | %          | 85.3                        | %          |
| Qatar               |       | 31.9                                            |       | 13.4                   | %          | 2.0                                          | %          | 26.8                                             | %          | 66.7                        | %          |
| Thailand            |       | 20.3                                            |       | 13.4                   | %          | 2.0                                          | %          | 26.8                                             | %          | 80.4                        | %          |
| North America       |       | 158.9                                           |       | 13.4                   | %          | 1.5                                          | %          | 29.4                                             | %          | 68.1                        | %          |
| Learning   Services |       | 6.4                                             |       | 13.4                   | %          | n/a                                          |       | —                                           |       | n/a                         |       |
|                |       |                                            |       |                   |       |                                         |       |                                             |       |                        |       |
|                |       | 640.5                                           |       |                   |       |                                         |       |                                             |       |                        |       |

 

F-50

----

Table of Contents

** **

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

** **

**12**                        **Intangible assets***(continued)*

 

The key assumptions used for value-in-use calculations in 2014 were as follows:

 
| ** **                    | ** ** | **Carrying Value   of Goodwill   $m** | ** ** | **Discount Rate** | ** ** | **Long-Term   Growth Rate   (Average)** | ** ** | **Pupil Growth   (Over 5 Years)** | ** ** | **Utilization   (Average)** | ** ** |
|-------------------------------|------------|-------------------------------------------------|------------|------------------------|------------|----------------------------------------------|------------|--------------------------------------------------|------------|-----------------------------|------------|
| China                         |       | 278.9                                           |       | 16.2% - 18.1%          |       | 2.0                                          | %          | 11.2                                             | %          | 69.3                        | %          |
| Western Europe                |       | 91.5                                            |       | 10.4% - 13.5%          |       | 1.5                                          | %          | 19.0                                             | %          | 84.7                        | %          |
| Eastern Europe                |       | 51.2                                            |       | 11.6% - 12.8%          |       | 1.5                                          | %          | 19.0                                             | %          | 84.9                        | %          |
| Qatar                         |       | 32.1                                            |       | 14.0%                  |       | 2.0                                          | %          | 28.3                                             | %          | 90.0                        | %          |
| Thailand                      |       | 20.5                                            |       | 15.2%                  |       | 2.0                                          | %          | 28.3                                             | %          | 90.8                        | %          |
| Other —   Southeast Asia |       | 12.4                                            |       | 14.9% - 19.5%          |       | 2.0                                          | %          | 28.3                                             | %          | 72.2                        | %          |
| North America                 |       | 158.9                                           |       | 13.7% - 15.5%          |       | 1.5                                          | %          | 63.8                                             | %          | 72.9                        | %          |
| Learning   Services           |       | 6.8                                             |       | 13.1%                  |       | —                                       |       | n/a                                              |       | n/a                         |       |
|                          |       |                                            |       |                   |       |                                         |       |                                             |       |                        |       |
|                          |       | **652.3**                                       |       |                   |       |                                         |       |                                             |       |                        |       |

 

The key assumptions used for value-in-use calculations in 2015 are as follows:

 
| ** **                    | ** ** | **Carrying Value   of Goodwill   $m** | ** ** | **Discount Rate** | ** ** | **Long-Term   Growth Rate   (Average)** | ** ** | **Pupil Growth   (Over 5 Years)** | ** ** | **Utilization   (Average)** | ** ** |
|-------------------------------|------------|-------------------------------------------------|------------|------------------------|------------|----------------------------------------------|------------|--------------------------------------------------|------------|-----------------------------|------------|
| China                         |       | 330.8                                           |       | 16.2% - 18.1%          |       | 2.3                                          | %          | 40.7                                             | %          | 67.4                        | %          |
| Western Europe                |       | 234.9                                           |       | 10.4% - 13.5%          |       | 1.5                                          | %          | 24.4                                             | %          | 65.8                        | %          |
| Eastern Europe                |       | 43.9                                            |       | 11.6% - 12.8%          |       | 1.5                                          | %          | 13.7                                             | %          | 86.3                        | %          |
| Qatar                         |       | 32.4                                            |       | 14.0%                  |       | 2.0                                          | %          | 0.0                                              | %          | 102.8                       | %          |
| Thailand                      |       | 18.2                                            |       | 15.2%                  |       | 2.0                                          | %          | 13.9                                             | %          | 67.7                        | %          |
| Vietnam                       |       | 130.1                                           |       | 22.4% - 23.3%          |       | 4.0                                          | %          | 50.6                                             | %          | 44.2                        | %          |
| Other —   Southeast Asia |       | 11.6                                            |       | 14.9% - 19.5%          |       | 2.0                                          | %          | 32.1                                             | %          | 66.8                        | %          |
| North America                 |       | 259.3                                           |       | 13.7% - 15.5%          |       | 2.2                                          | %          | 30.8                                             | %          | 74.9                        | %          |
| Learning   Services           |       | 6.3                                             |       | 13.1%                  |       | 1.0                                          | %          | n/a                                              |       | n/a                         |       |
|                          |       |                                            |       |                   |       |                                         |       |                                             |       |                        |       |
|                          |       | **1,067.5**                                     |       |                   |       |                                         |       |                                             |       |                        |       |

 

F-51

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**12**                        **Intangible assets***(continued)*

 

In the year ended 31 August 2015, the results of the Premium School’s business benefited from solid growth in student numbers both at the start of the first term as well as during the 2014/15 academic year. In addition, the acquisition and successful integration of the ten schools from the acquisition of the British International Schools Group, Vietnam and Sterling International Schools C Corporation further diversifies the Group.

 

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. The calculation is most sensitive to the following assumptions:

 

·              Full Time Equivalent students (“FTEs”)

·              Adjusted EBITDA margins

·              Discount rates

·              Market share assumptions

·              Growth rate estimates

 

FTEs — FTEs are based on budgeted numbers and extrapolated based on expected future growth and historical performance. We define 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.

 

Adjusted EBITDA margins — Adjusted EBITDA margins are based on average values achieved in similar schools in the region.

 

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.

 

The 2014 discount rates have been revised to correct an error. When applying the updated discount rates in the 2014 value-in-use calculation, there remains sufficient headroom as compared to carrying value.

 

Market share assumptions — When using industry data for growth rates (as noted below), these assumptions are important because management assesses how the unit’s position, relative to its competitors, might change over the forecast period. Management expects the Group’s share of the international schools market to be stable over the forecast period.

 

Growth rate estimates — Rates are based on industry research.

 

F-52

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**12**          **Intangible assets***(continued)*

 

**Specific assumptions used**

 

The following assumptions were used in the value-in-use calculation for the school in Western Europe:

 
| **Assumptions**         | ** ** | ** ** | ** **   | **Impact on headroom if assumptions   worsened by 0.1%   $m** | ** ** |
|-------------------------|------------|------------|--------------|---------------------------------------------------------------------------------------------|------------|
| FTEs                    |       | 17.0       | %            | (0.1                                                                                        | )          |
| Discount rates          |       | 10.6       | %            | (0.4                                                                                        | )          |
| Growth rate   estimates |       | 1.50       | %            | (0.3                                                                                        | )          |
| Goodwill at risk        |       | $          | 29.7 million |                                                                                        |       |   |
| Headroom                |       | $          | 7.4 million  |                                                                                        |       |   |

 

**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 our recruitment efforts fail to increase enrolment or replace departing students. Additionally, if we fail to maintain our quality of education, parents may choose not to re-enrol their children in our schools. A reduction of FTEs by 7.4% every year would result in impairment.

 

·                                          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 12.5% would result in impairment.

 

·                                          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 school. A reduction by 2.5% in the long term growth rates would result in impairment.

 

·                                          Market share during the forecast period — Although management expects the Group’s market share to be stable over the forecast period, a decline in market share could lead to impairment. This is modelled through the decrease in FTEs and growth rate above.

 

F-53

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**12**          **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** | ** ** |
| ** **                                       | ** ** | **Operating Segment**  | ** ** | **$m**               | ** ** | **$m** | ** ** |
|                                             |       |                        |       |                 |       |   |   |
| British School   of Guangzhou                    |       | China                       |       | 4.0                  |       | **3.8** |   |
| Léman   International School — Chengdu |       | China                       |       | —               |       | **11.5** |   |
| Collège   Beau-Soleil*                      |       | Western Europe              |       | 13.3                 |       | **12.7** |   |
| Collège   Champittet*                       |       | Western Europe              |       | 6.3                  |       | **5.9** |   |
| International   College Spain                    |       | Western Europe              |       | 3.3                  |       | **2.8** |   |
| Collège du   Léman*                    |       | Western Europe              |       | —               |       | **60.2** |   |
| Compass   International School Doha              |       | Qatar                       |       | 3.9                  |       | **3.9** |   |
| The Regent’s   International School         |       | Thailand                    |       | 5.0                  |       | **4.4** |   |
| Dover Court   Preparatory School                 |       | Other — Southeast Asia |       | 7.2                  |       | **6.3** |   |
| Northbridge   International School               |       | Other — Southeast Asia |       | 7.7                  |       | **7.5** |   |
| British   International School of Boston         |       | North America               |       | 3.4                  |       | **3.4** |   |
| British School   of Chicago                      |       | North America               |       | 5.0                  |       | **4.9** |   |
| British   International School of Houston        |       | North America               |       | 4.6                  |       | **4.5** |   |
| British School   of Washington                   |       | North America               |       | 3.4                  |       | **3.4** |   |
| San Roberto   International School               |       | North America               |       | —               |       | **5.1** |   |
| The Village   School                             |       | North America               |       | —               |       | **25.8** |   |
| North Broward   Preparatory School               |       | North America               |       | —               |       | **29.7** |   |
| Windermere   Preparatory School                  |       | North America               |       | —               |       | **17.6** |   |
| Other                                            |       |                        |       | 3.6                  |       | **3.2** |   |
|                                             |       |                        |       |                 |       |   |   |
|                                             |       |                        |       | 70.7                 |       | **216.6** |   |

 

----

* Indefinite useful life intangible assets

 

The recoverable amount of individual intangible assets with indefinite useful lives, being brands associated with specific schools, is determined based on value-in-use calculations. These calculations use revenue projections based on financial projections approved by management and adjusted for royalty savings and trademark maintenance expenses covering a five-year period discounted using pre-tax discount rates. Revenues beyond the five-year period are extrapolated using estimated growth rates. 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 for Brand Names:

 
| ** **     | ** ** | **Carrying Value   of Brand Names   $m** | ** ** | **Discount Rate** | ** ** | **Long-Term   Growth Rate** | ** ** | **Revenue   Growth Rates   (Over 5 Years)** | ** ** |
|----------------|------------|---------------------------------------------------------|------------|------------------------|------------|----------------------------------|------------|------------------------------------------------------------|------------|
| 2014           |       |                                                    |       |                   |       |                             |       |                                                       |       |
| Western Europe |       | 19.6                                                    |       | 10.4% - 11.0%          |       | 1.5%                             |       | 18.0% - 36.0%                                              |       |
|           |       |                                                    |       |                   |       |                             |       |                                                       |       |
| 2015           |       |                                                    |       |                   |       |                             |       |                                                       |       |
| Western Europe |       | 78.8                                                    |       | 10.6% - 11.0%          |       | 1.3% - 1.5%                      |       | 13.7% - 36.4%                                              |       |

 

The 2014 discount rates have been revised to correct an error. When applying the updated discount rates in the 2014 value-in-use calculation, there remains sufficient headroom as compared to carrying value.

 

F-54

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

** **

**12**          **Intangible assets***(continued)*

 

**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 our recruitment efforts fail to increase enrolment or replace departing students. Additionally, if we fail to maintain our quality of education, parents may choose not to re-enrol their children in our schools. A reduction of FTEs by 6.8% every year would result in impairment.

 

·                                          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 12.3% would result in impairment.

 

·                                          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 school. A reduction to (0.8%) in the long term growth rates would result in impairment.

 

·                                          Market share during the forecast period — Although management expects the Group’s market share to be stable over the forecast period, a decline in market share could lead to impairment. This is modelled through the decrease in FTEs and growth rate above.

 

F-55

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**13**           **Subsidiaries**

 

As at 31 August 2015, the Group had the following interests in subsidiaries:

 
| ** **                                                                                                                                          | ** ** | **Country of** | ** ** | **Class of**    | ** ** | **Ownership** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------|------------|----------------------|------------|---------------|------------|
| ** **                                                                                                                                          | ** ** | **Incorporation**   | ** ** | **shares held** | ** ** | **2014**      | ** ** | **2015** | ** ** |
| *Holding   companies*                                                                                                                               |       |                |       |                 |       |          |       |   |   |
| Nord Anglia   Education Finance LLC*+dS*                                                                                                            |       | USA                 |       | n/a                  |       | 100           | %          | **100** | **%** |
| Nord Anglia   Education (UK) Holdings PLC*+dSG*                                                                                                     |       | UK                  |       | Ordinary

Deferred   |       | 100           | %          | **100** | **%** |
| Nord Anglia   Education Limited**dSG*                                                                                                               |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| NAE Hong Kong   Limited**dSG*                                                                                                                       |       | Hong Kong           |       | Ordinary             |       | 100           | %          | **100** | **%** |
| Nord Anglia   Education Development Services Limited**dSG*                                                                                          |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| Nord Anglia   Middle East Holding S.P.C*                                                                                                            |       | Bahrain             |       | n/a                  |       | 100           | %          | **100** | **%** |
| Nord   International Schools Limited**dSG*                                                                                                          |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| EEE Enterprise   Limited**dSG*                                                                                                                      |       | BVI                 |       | Ordinary             |       | 100           | %          | **100** | **%** |
| Rice Education   Hong Kong Limited**dSG*                                                                                                            |       | Hong Kong           |       | Ordinary             |       | 100           | %          | **100** | **%** |
| Regent Pattaya   Campus Management Co., Ltd.*SH*                                                                                               |       | Thailand            |       | Ordinary             |       | 49            | %          | **49** | **%** |
| Saint Andrews   International School Sukhumvit Campus Co., Ltd.*SH*                                                                            |       | Thailand            |       | Preference           |       | 49            | %          | **49** | **%** |
| NA Educational   Services Limited**dSG*                                                                                                             |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| NA Schools   Limited**dSG*                                                                                                                          |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| WCL HoldCo   Limited**dSG*                                                                                                                          |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| WCL Group   Limited**dSG*                                                                                                                           |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| WCL Intermediate   Holdings Limited**dSG*                                                                                                           |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| WCL Services   Limited**dSG*                                                                                                                        |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| WCL School   Management Services Limited**dSG*                                                                                                      |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| British Schools   of America, LLC**SG*                                                                                                              |       | USA                 |       | n/a                  |       | 100           | %          | **100** | **%** |
| BST Holding,   L.L.C.**SG*                                                                                                                          |       | USA                 |       | n/a                  |       | 100           | %          | **100** | **%** |
| British Schools   of Texas, L.L.C.**SG*                                                                                                             |       | USA                 |       | n/a                  |       | 100           | %          | **100** | **%** |
| WCL Intermediate   Holdings Spain, S.L.U.**SG*                                                                                                      |       | Spain               |       | n/a                  |       | 100           | %          | **100** | **%** |
| International   College 2, S.L.U. **SG*                                                                                                             |       | Spain               |       | n/a                  |       | 100           | %          | **100** | **%** |
| British   International School Foundation**dG*                                                                                                      |       | Hungary             |       | n/a                  |       | 100           | %          | **100** | **%** |
| British   International School Bratislava, s.r.o.^*S*                                                                                               |       | Slovakia            |       | n/a                  |       | 100           | %          | **100** | **%** |
| BSG Limited**dSG*                                                                                                                                   |       | Hong Kong           |       | Ordinary             |       | 100           | %          | **100** | **%** |
| Guangzhou   Yingkai Investment & Consulting Co., Ltd.*                                                                                |       | China               |       | n/a                  |       | 100           | %          | **100** | **%** |
| Uma Education   Holdings Limited**dGS*                                                                                                              |       | BVI                 |       | Ordinary             |       | 100           | %          | **100** | **%** |
| Uma Education   Hong Kong Limited**dGS*                                                                                                             |       | Hong Kong           |       | Ordinary             |       | 100           | %          | **100** | **%** |
| WCL EBT Limited***                                                                                                                                  |       | UK                  |       | Ordinary             |       | 100           | %          | **100** | **%** |
| Nord Anglia   (Beijing) Consulting Limited***                                                                                                       |       | China               |       | n/a                  |       | 100           | %          | **100** | **%** |
| KG Investments   Limited ^                                                                                                                          |       | Jersey              |       | n/a                  |       | 100           | %          | **100** | **%** |
| KG (Beijing)   Investment Consultant Co., Ltd.***                                                                                              |       | China               |       | n/a                  |       | 100           | %          | **100** | **%** |
| Neptune   Education Holdings Limited***                                                                                                             |       | Hong Kong           |       | Ordinary             |       | 100           | %          | **100** | **%** |
| Nord Anglia   School (Hong Kong) Limited***                                                                                                         |       | Hong Kong           |       | n/a                  |       | 100           | %          | **100** | **%** |
| 诺地安格(上海)商务信息咨询有限公司*** |       | China               |       | n/a                  |       | 100           | %          | **100** | **%** |
| BIS Ltd**SG*                                                                                                                                        |       | BVI                 |       | Ordinary             |       | n/a           |       | **100** | **%** |
| Oasis   Development Management Limited*SG*                                                                                                          |       | BVI                 |       | Ordinary             |       | n/a           |       | **96.2** | **%** |
| The British   International School Company Limited                                                                                                  |       | Vietnam             |       | n/a                  |       | n/a           |       | **90** | **%** |
| Thien Huong   Investment Company Limited                                                                                                            |       | Vietnam             |       | Investment           |       | n/a           |       | **90** | **%** |
| Thien Huong   Education Joint Stock Company                                                                                                         |       | Vietnam             |       | Charter              |       | n/a           |       | **81** | **%** |
| NAE HK Holdings   Limited*+SG*                                                                                                                      |       | Hong Kong           |       | Ordinary             |       | n/a           |       | **100** | **%** |
| Viking   Holdco, Inc.**dSG*                                                                                                                    |       | USA                 |       | n/a                  |       | n/a           |       | **100** | **%** |
| Viking Holding   Company, LLC^*dSG*                                                                                                                 |       | USA                 |       | n/a                  |       | n/a           |       | **100** | **%** |
| Sterling   International Schools C Corporation**dSG*                                                                                                |       | USA                 |       | n/a                  |       | n/a           |       | **100** | **%** |

 

F-56

----

Table of Contents

** **

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

** **

**13**           **Subsidiaries**

 
| Meritas MX, LLC**dSG*                                                                                                                                                                            |   | USA            |   | n/a      |   | n/a    |   | **100**  | **%**  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|--------|----------|--------|--------|--------|----------|--------|
| Meritas MX II,   LLC*                                                                                                                                                                            |   | USA            |   | n/a      |   | n/a    |   | **100**  | **%**  |
| Meritas   Luxembourg Holdings SARL**SG*                                                                                                                                                          |   | Luxembourg     |   | Ordinary |   | n/a    |   | **100**  | **%**  |
| Meritas   (Gibraltar) Holdings Limited**SG*                                                                                                                                                      |   | Gibraltar      |   | Ordinary |   | n/a    |   | **100**  | **%**  |
| Meritas CH Sarl**dSG*                                                                                                                                                                            |   | Swizterland    |   | Ordinary |   | n/a    |   | **100**  | **%**  |
| Meritas Malta   Holdings Limited^*SG*                                                                                                                                                            |   | Malta          |   | Ordinary |   | n/a    |   | **100**  | **%**  |
| Meritas Mexico,   S. de R.L. de C.V^*SG*                                                                                                                                                         |   | Mexico         |   | n/a      |   | n/a    |   | **100**  | **%**  |
| Sterling   International Schools**SG*                                                                                                                                                            |   | Cayman Islands |   | Ordinary |   | n/a    |   | **100**  | **%**  |
| Sterling Asian   Schools Holdings Limited**SG*                                                                                                                                                   |   | Hong Kong      |   | Ordinary |   | n/a    |   | **100**  | **%**  |
| Chengdu Sterling   Educational Consulting Ltd.*                                                                                                                                                  |   | China          |   | n/a      |   | n/a    |   | **100**  | **%**  |
| * *                                                                                                                                                                                         |   |           |   |     |   |   |   |     |   |
| *Premium   Schools*                                                                                                                                                                              |   |           |   |     |   |   |   |     |   |
| English   International School Prague, s.r.o.^*S*                                                                                                                                                |   | Czech Republic |   | n/a      |   | 100    | %      | **100**  | **%**  |
| British   International School Kindergarten, Primary and Secondary School***                                                                                                                     |   | Hungary        |   | n/a      |   | 100    | %      | **100**  | **%**  |
| The British   School Sp. Z o.o.**dSG*                                                                                                                                                            |   | Poland         |   | n/a      |   | 100    | %      | **100**  | **%**  |
| The British   International School, Shanghai*                                                                                                                                                    |   | China          |   | n/a      |   | 100    | %      | **100**  | **%**  |
| British School   of Beijing*                                                                                                                                                                     |   | China          |   | n/a      |   | 100    | %      | **100**  | **%**  |
| Collège   Champittet SA**dSG*                                                                                                                                                               |   | Switzerland    |   | n/a      |   | 100    | %      | **100**  | **%**  |
| Collège Alpin   Beau-Soleil SA**dSG*                                                                                                                                                        |   | Switzerland    |   | n/a      |   | 100    | %      | **100**  | **%**  |
| La Côte International   School SA**dSG*                                                                                                                                                     |   | Switzerland    |   | n/a      |   | 100    | %      | **100**  | **%**  |
| The Regent’s   SchoolH                                                                                                                                                                      |   | Thailand       |   | n/a      |   | 49     | %      | **49**   | **%**  |
| British School   of Washington, L.L.C.**SG*                                                                                                                                                      |   | USA            |   | n/a      |   | 100    | %      | **100**  | **%**  |
| British School   of Boston, L.L.C.**SG*                                                                                                                                                          |   | USA            |   | n/a      |   | 100    | %      | **100**  | **%**  |
| British   International School                                                                                                                                                                   |   | Vietnam        |   | n/a      |   | n/a    |   | **90**   | **%**  |
| British   Vietnamese International School Royal                                                                                                                                                  |   | Vietnam        |   | n/a      |   | n/a    |   | **90**   | **%**  |
| British   International School — Hanoi                                                                                                                                                      |   | Vietnam        |   | n/a      |   | n/a    |   | **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**   | **%**  |
| Collegiate Prep   Realty, LLC**dSG*                                                                                                                                                              |   | USA            |   | n/a      |   | n/a    |   | **100**  | **%**  |
| Village Real   Estate, LLC**dSG*                                                                                                                                                                 |   | USA            |   | n/a      |   | n/a    |   | **100**  | **%**  |
| North Broward   Preparatory Schools, LLC**dSG*                                                                                                                                                   |   | USA            |   | n/a      |   | n/a    |   | **100**  | **%**  |
| College du   Léman, SARL**dSG*                                                                                                                                                              |   | Switzerland    |   | Ordinary |   | n/a    |   | **100**  | **%**  |
| Instituto de   Desarrollo Educacion y Aprendizaje, S.C. ^                                                                                                                                        |   | Mexico         |   | n/a      |   | n/a    |   | **100**  | **%**  |
| The Léman   Internationa— School - Chengdu*                                                                                                                                            |   | China          |   | n/a      |   | n/a    |   | **100**  | **%**  |
| Camplife, Ltd.                                                                                                                                                                              |   | USA            |   | n/a      |   | n/a    |   | **50.5** | **%**  |
| British School   of Chicago, L.L.C.**SG*                                                                                                                                                         |   | USA            |   | n/a      |   | 100    | %      | **100**  | **%**  |
| British School   of Houston, L.P.^*SG*                                                                                                                                                           |   | USA            |   | n/a      |   | 100    | %      | **100**  | **%**  |
| International   College Spain, S.A.U.**SG*                                                                                                                                                       |   | Spain          |   | n/a      |   | 100    | %      | **100**  | **%**  |
| Education   Overseas Qatar LLC *GH*                                                                                                                                                              |   | Qatar          |   | n/a      |   | 49     | %      | **49**   | **%**  |
| Sukromna spojena   skola British International School Bratislava*                                                                                                                                |   | Slovakia       |   | n/a      |   | 100    | %      | **100**  | **%**  |
| Northbridge   International School (Cambodia) Limited*                                                                                                                                           |   | Cambodia       |   | n/a      |   | n/a    |   | **100**  | **%**  |
| British American   School of Charlotte, L.L.C.**GS*                                                                                                                                              |   | USA            |   | n/a      |   | 100    | %      | **100**  | **%**  |
| WCL Academy of   New York LLC**GS*                                                                                                                                                               |   | USA            |   | n/a      |   | 100    | %      | **100**  | **%**  |
| St. Andrews   International School Bangkok (Sukhumvit) *H*                                                                                                                                       |   | Thailand       |   | n/a      |   | 49     | %      | **49**   | **%**  |
| British School   of Guangzhou*                                                                                                                                                                   |   | China          |   | n/a      |   | 100    | %      | **100**  | **%**  |
| Dover Court International   School (Pte.) Ltd.**dSG*                                                                                                                                             |   | Singapore      |   | Ordinary |   | n/a    |   | **100**  | **%**  |
| Nord Anglia   International School, Hong Kong Limited***                                                                                                                                         |   | Hong Kong      |   | n/a      |   | 100    | %      | **100**  | **%**  |
| British   International School LLC*HG*                                                                                                                                                           |   | Abu Dhabi      |   | n/a      |   | n/a    |   | **49**   | **%**  |
| Nord Anglia   International School L.L.C*HG*                                                                                                                                                     |   | Dubai          |   | n/a      |   | n/a    |   | **49**   | **%**  |

 

F-57

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

** **

**13**                        **Subsidiaries****(***continued**)*

** **

 
| *Learning   Services*                                              |   |         |   |     |   |   |   |    |   |
|--------------------------------------------------------------------|--------|--------------|--------|----------|--------|--------|--------|---------|--------|
| Nord Anglia   Vocational Education and Training Services Ltd**dSG* |   | UK           |   | Ordinary |   | 100    | %      | **100** | **%**  |
| Brighton   Education Learning Services Sdn. Bhd.*                  |   | Malaysia     |   | n/a      |   | 100    | %      | **100** | **%**  |
| Nord Anglia   Education Sdn. Bhd.*                                 |   | Malaysia     |   | n/a      |   | 100    | %      | **100** | **%**  |
| BSA Resource   Solutions, LLC *SG*                                 |   | USA          |   | n/a      |   | 50     | %      | **50**  | **%**  |
| Fieldwork   Education Limited**dSG*                                |   | UK           |   | Ordinary |   | 100    | %      | **100** | **%**  |
| WCL School   Management Services (India) Limited*                  |   | UK           |   | Ordinary |   | 100    | %      | **100** | **%**  |
| Overseas Schools   SA***                                           |   | Belgium      |   | n/a      |   | 100    | %      | **100** | **%**  |
| Nord Anglia   Educational Consultancies Saudi Arabia Limited ^     |   | Sandi Arabia |   | n/a      |   | 100    | %      | **100** | **%**  |

 

***Investments in joint ventures and associates***

 

The amounts recognized in the Consolidated Balance Sheet are as follows:

 
| ** **     | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|----------------|------------|----------|------------|----------|------------|------------|------------|
| ** **     | ** ** | **$m**   | ** ** | **$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 31 August 2015.

 
| **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 associates and joint venture had no other contingent liabilities or capital commitments as at 31 August 2015, 2014 and 2013. 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 reporting date. EduAction (Waltham Forest) Limited cannot distributed its profits without the consent from the two venture partners.

 

In the opinion of the directors, the above joint venture and associates 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.

 

The total non-controlling interest for the year is $3.9 million, the Directors have assessed that the non-controlling interest 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), Camplife Limited is 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.

 

----

* 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 17)

 

S Share capital of subsidiary is pledged as security for borrowings (see note 17)

 

G Subsidiary is a guarantor under the security arrangement for borrowings (see note 17)

 

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.

 

F-58

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**14**                        **Deferred tax assets and liabilities**

 

*Recognized deferred tax assets and liabilities*

 

The analysis of deferred tax assets and deferred tax liabilities is as follows:

 
| ** **                                                                                           | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
|------------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| ** **                                                                                           | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**   | ** ** |
| Deferred tax   assets:                                                                               |       |     |       |     |       |     |       |
|                                                                                                 |       |     |       |     |       |     |       |
| -      Deferred   tax assets to be recovered after more than 12 months |       | 19.4     |       | 17.5     |       | **65.0** |       |
| -      Deferred   tax asset to be recovered within 12 months           |       | 1.8      |       | 3.4      |       | **5.4**  |       |
|                                                                                                 |       |     |       |     |       |     |       |
|                                                                                                 |       | 21.2     |       | 20.9     |       | **70.4** |       |

 
| ** **                                                                                              | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|------------|------------|
| ** **                                                                                              | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**     | ** ** |
| Deferred tax   liabilities:                                                                             |       |     |       |     |       |       |       |
|                                                                                                    |       |     |       |     |       |       |       |
| -      Deferred   tax liability to be recovered after more than 12 months |       | (33.9    | )          | (42.9    | )          | **(105.8** | **)**      |
| -      Deferred   tax liability to be recovered within 12 months          |       | (1.4     | )          | (2.6     | )          | **(8.3**   | **)**      |
|                                                                                                    |       |     |       |     |       |       |       |
|                                                                                                    |       | (35.3    | )          | (45.5    | )          | **(114.1** | **)**      |
|                                                                                                    |       |     |       |     |       |       |       |
| **Deferred   tax liabilities (net)**                                                                    |       | (14.1    | )          | (24.6    | )          | **(43.7**  | **)**      |

 

Deferred tax assets and liabilities are attributable to the following:

 
| ** **                         | ** ** | **Assets** | ** ** | **Liabilities** | ** ** |
|------------------------------------|------------|------------|------------|-----------------|------------|
| ** **                         | ** ** | **2013**   | ** ** | **2014**        | ** ** | **2015** | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
| ** **                         | ** ** | **$m**     | ** ** | **$m**          | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** |
|                               |       |       |       |            |       |   |   |   |   |   |   |   |   |
| Property, plant   and equipment    |       | 0.4        |       | 0.3             |       | **0.2** |   | (6.6 | ) | (6.6 | ) | **(16.9** | **)** |
| Intangible   assets                |       | —     |       | —          |       | **—** |   | (25.6 | ) | (33.3 | ) | **(88.0** | **)** |
| Employee   benefits                |       | 1.4        |       | 1.6             |       | **5.7** |   | — |   | — |   | **—** |   |
| Tax value of   loss carry-forwards |       | 5.2        |       | 5.6             |       | **47.8** |   | — |   | — |   | **—** |   |
| Provisions and   accruals          |       | 14.2       |       | 13.4            |       | **16.7** |   | (0.4 | ) | (4.2 | ) | **(7.9** | **)** |
| Goodwill                           |       | —     |       | —          |       | **—** |   | (1.0 | ) | (1.4 | ) | **(1.3** | **)** |
| Other                              |       | —     |       | —          |       | **—** |   | (1.7 | ) | — |   | **—** |   |
|                               |       |       |       |            |       |   |   |   |   |   |   |   |   |
| Tax assets /   (liabilities)       |       | 21.2       |       | 20.9            |       | **70.4** |   | (35.3 | ) | (45.5 | ) | **(114.1** | **)** |
|                               |       |       |       |            |       |   |   |   |   |   |   |   |   |
| Net tax   liabilities              |       | —     |       | —          |       | **—** |   | (14.1 | ) | (24.6 | ) | **(43.7** | **)** |

 

F-59

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**14**                        **Deferred tax assets and liabilities**

 

*Movement in deferred tax*

 
| ** **                         | ** ** | **1   September   2012** | ** ** | **Recognised   in income   statement**      | ** ** | **Recognised in   comprehensive   income** | ** ** | **Foreign   exchange   movements** | ** ** | **Acquired in   business   combination** | ** ** | **31 August   2013** | ** ** |
|------------------------------------|------------|--------------------------|------------|---------------------------------------------|------------|-------------------------------------------------|------------|------------------------------------|------------|-----------------------------------------------|------------|---------------------------|------------|
| ** **                         | ** ** | **$m**                   | ** ** | **$m**                                      | ** ** | **$m**                                          | ** ** | **$m**                             | ** ** | **$m**                                        | ** ** | **$m**                    | ** ** |
|                               |       |                     |       |                                        |       |                                            |       |                               |       |                                          |       |                      |       |
| Property, plant   and equipment    |       | (0.4                     | )          | (3.5                                        | )          | —                                          |       | —                             |       | (2.3                                          | )          | (6.2                      | )          |
| Intangible   assets                |       | (9.2                     | )          | 0.6                                         |       | —                                          |       | (0.1                               | )          | (16.9                                         | )          | (25.6                     | )          |
| Employee   benefits                |       | 1.2                      |       | —                                      |       | 0.2                                             |       | —                             |       | —                                        |       | 1.4                       |       |
| Tax value of   loss carry-forwards |       | 1.0                      |       | 4.0                                         |       | —                                          |       | (0.1                               | )          | 0.3                                           |       | 5.2                       |       |
| Provisions and   accruals          |       | 3.6                      |       | 2.7                                         |       | —                                          |       | —                             |       | 7.5                                           |       | 13.8                      |       |
| Goodwill                           |       | (0.6                     | )          | (0.4                                        | )          | —                                          |       | —                             |       | —                                        |       | (1.0                      | )          |
| Other                              |       | —                   |       | (1.7                                        | )          | —                                          |       | —                             |       | —                                        |       | (1.7                      | )          |
|                               |       |                     |       |                                        |       |                                            |       |                               |       |                                          |       |                      |       |
|                               |       | (4.4                     | )          | 1.7                                         |       | 0.2                                             |       | (0.2                               | )          | (11.4                                         | )          | (14.1                     | )          |
|                               |       |                     |       |                                        |       |                                            |       |                               |       |                                          |       |                      |       |
| ** **                         | ** ** | **1   September   2013** | ** ** | **Recognized   in income   statement**      | ** ** | **Recognized in   comprehensive   income** | ** ** | **Foreign   exchange   movements** | ** ** | **Acquired in   business   combination** | ** ** | **31 August   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                |       | 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                                        | )          | —                                          |       | (0.1                               | )          | —                                        |       | 9.2                       |       |
| Goodwill                           |       | (1.0                     | )          | (0.3                                        | )          | —                                          |       | (0.1                               | )          | —                                        |       | (1.4                      | )          |
| Other                              |       | (1.7                     | )          | 1.8                                         |       | —                                          |       | (0.1                               | )          | —                                        |       | —                    |       |
|                               |       |                     |       |                                        |       |                                            |       |                               |       |                                          |       |                      |       |
|                               |       | (14.1                    | )          | (3.7                                        | )          | 0.2                                             |       | (0.6                               | )          | (6.4                                          | )          | (24.6                     | )          |
|                               |       |                     |       |                                        |       |                                            |       |                               |       |                                          |       |                      |       |
| ** **                         | ** ** | **1   September   2014** | ** ** | **Recognized   in income   statement** | ** ** | **Recognized in   comprehensive   income** | ** ** | **Foreign   exchange   movements** | ** ** | **Acquired in   business   combination** | ** ** | **31 August   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                |       | 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          |       | 9.2                      |       | (2.4                                        | )          | —                                          |       | (0.8                               | )          | 2.8                                           |       | **8.8**                   |       |
| Goodwill                           |       | (1.4                     | )          | —                                      |       | —                                          |       | 0.1                                |       | —                                        |       | **(1.3**                  | **)**      |
|                               |       |                     |       |                                        |       |                                            |       |                               |       |                                          |       |                      |       |
|                               |       | (24.6                    | )          | 10.2                                        |       | 0.9                                             |       | (0.3                               | )          | (29.9                                         | )          | **(43.7**                 | **)**      |

 

F-60

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**15**                        **Trade and other receivables**

 
| ** **                                                          | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**  | ** ** |
|---------------------------------------------------------------------|------------|----------|------------|----------|------------|-----------|------------|
| ** **                                                          | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**    | ** ** |
| **Current**                                                         |       |     |       |     |       |      |       |
| Trade   receivables                                                 |       | 50.8     |       | 74.3     |       | **99.1**  |       |
| Less: Provision   for impairment of trade receivables (See note 23) |       | (1.1     | )          | (4.7     | )          | **(6.8**  | **)**      |
|                                                                |       |     |       |     |       |      |       |
| Net trade   receivables (See note 23b)                              |       | 49.7     |       | 69.6     |       | **92.3**  |       |
|                                                                |       |     |       |     |       |      |       |
| Prepayments                                                         |       | 16.9     |       | 15.6     |       | **29.8**  |       |
| Accrued income                                                      |       | 0.2      |       | 3.8      |       | **0.2**   |       |
| Other   receivables                                                 |       | 16.4     |       | 5.8      |       | **8.8**   |       |
|                                                                |       |     |       |     |       |      |       |
|                                                                |       | 83.2     |       | 94.8     |       | **131.1** |       |
|                                                                |       |     |       |     |       |      |       |
| **Non-current**                                                     |       |     |       |     |       |      |       |
| Other   receivables                                                 |       | 12.4     |       | 9.2      |       | **37.9**  |       |

** **

In 2015, 2014 and 2013, non-current receivables mainly relate to rental deposits on a Premium School site which is not recoverable for at least 12 months from this date. Additionally, in 2013 the balance also included cash deposits that cannot be drawn until at least 12 months after the balance sheet date.

 

**16**                        **Cash and cash equivalents**

 
| ** **                                             | ** ** | **1 September   2013** | ** ** | **31 August   2014** | ** ** | **31 August   2015** | ** ** |
|--------------------------------------------------------|------------|-----------------------------|------------|---------------------------|------------|---------------------------|------------|
| ** **                                             | ** ** | **$m**                      | ** ** | **$m**                    | ** ** | **$m**                    | ** ** |
|                                                   |       |                        |       |                      |       |                      |       |
| Cash and cash   equivalents (excluding bank overdraft) |       | 222.9                       |       | 256.4                     |       | **317.0**                 |       |

 

F-61

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**17**                        **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 23, Financial instruments.

 
| ** **                                                 | ** ** | **1 September   2013** | ** ** | **31 August   2014** | ** ** | **31 August   2015** | ** ** |
|------------------------------------------------------------|------------|-----------------------------|------------|---------------------------|------------|---------------------------|------------|
| ** **                                                 | ** ** | **$m**                      | ** ** | **$m**                    | ** ** | **$m**                    | ** ** |
|                                                       |       |                        |       |                      |       |                      |       |
| **Current   liabilities**                                  |       |                        |       |                      |       |                      |       |
| Bank overdraft                                             |       | 51.8                        |       | 90.2                      |       | **90.7**                  |       |
| 5.75% senior   secured notes                               |       | —                      |       | —                    |       | **1.1**                   |       |
| Current portion   of secured bank loans                    |       | 8.7                         |       | 20.0                      |       | **0.2**                   |       |
| Current portion   of term loan due 2021                    |       | —                      |       | 3.2                       |       | **6.3**                   |       |
| Current portion   of 10.25% Senior secured notes due 2017  |       | 20.8                        |       | —                    |       | **—**                |       |
| Current portion   of 8.5% Senior PIK toggle notes due 2018 |       | 1.1                         |       | —                    |       | **—**                |       |
|                                                       |       |                        |       |                      |       |                      |       |
|                                                       |       | 82.4                        |       | 113.4                     |       | **98.3**                  |       |
|                                                       |       |                        |       |                      |       |                      |       |
| **Non-current   liabilities**                              |       |                        |       |                      |       |                      |       |
| Secured bank loans                                         |       | 5.3                         |       | —                    |       | **—**                |       |
| 10.25% Senior   secured notes due 2017                     |       | 484.6                       |       | —                    |       | **—**                |       |
| 8.50% Senior PIK   toggle notes due 2018                   |       | 140.5                       |       | —                    |       | **—**                |       |
| 5.75% senior   secured notes                               |       | —                      |       | —                    |       | **199.8**                 |       |
| Term loan due   2021                                       |       | —                      |       | 499.2                     |       | **866.5**                 |       |
|                                                       |       |                        |       |                      |       |                      |       |
|                                                       |       | 630.4                       |       | 499.2                     |       | **1,066.3**               |       |

 

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 13, Subsidiaries, 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**  | ** ** |
|-------------------------------|------------|--------------|------------|---------------------|------------|-------------------|------------|---------------|------------|---------------|------------|---------------|------------|---------------|------------|---------------|------------|---------------|------------|
| ** **                    | ** ** | ** **   | ** ** | **Nominal**         | ** ** | **Year**          | ** ** | **value**     | ** ** | **amount**    | ** ** | **value**     | ** ** | **amount**    | ** ** | **value**     | ** ** | **amount**    | ** ** |
| ** **                    | ** ** | **Currency** | ** ** | **interest   rate** | ** ** | **of   maturity** | ** ** | **2013   $m** | ** ** | **2013   $m** | ** ** | **2014   $m** | ** ** | **2014   $m** | ** ** | **2015   $m** | ** ** | **2015   $m** | ** ** |
| Bank overdraft                |       | US $         |       |                |       |              |       | 51.8          |       | 51.8          |       | 90.2          |       | 90.2          |       | **90.7**      |       | **90.7**      |       |
| Working capital   facility    |       | RMB          |       | 6.6                 | %          | 2014              |       | 13.9          |       | 13.9          |       | **—**    |       | **—**    |       | **—**    |       | **—**    |       |
| 10.25% Senior   secured notes |       | US $         |       | 10.25               | %          | 2017              |       | 490.0         |       | 505.4         |       | **—**    |       | **—**    |       | **—**    |       | **—**    |       |
| 8.50% Senior PIK   notes      |       | US $         |       | 8.50                | %          | 2018              |       | 150.0         |       | 141.6         |       | **—**    |       | **—**    |       | **—**    |       | **—**    |       |
| Business loan                 |       | CHF          |       | 3.61                | %          | 2014              |       | 0.1           |       | 0.1           |       | **—**    |       | **—**    |       | **—**    |       | **—**    |       |
| 5.75% senior   secured notes  |       | CHF          |       | 5.75                | %          | 2022              |       | —        |       | —        |       | **—**    |       | **—**    |       | **208.1**     |       | **200.9**     |       |
| Term loan *                   |       | US $         |       | 4.5%-5.0            | %          | 2021              |       | —        |       | —        |       | 513.7         |       | 502.4         |       | **897.2**     |       | **872.8**     |       |
| Revolving credit   facility # |       | US $         |       | 4.75                | %          | 2021              |       | —        |       | —        |       | 20.0          |       | 20.0          |       | **—**    |       | **0.2**       |       |
|                          |       |         |       |                |       |              |       |          |       |          |       |          |       |          |       |          |       |          |       |
|                          |       |         |       |                |       |              |       | 705.8         |       | 712.8         |       | 623.9         |       | 612.6         |       | **1,196.0**   |       | **1,164.6**   |       |

 

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.

 

F-62

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

** **

**17**                        **Interest-bearing loans and borrowings***(continued)*

 

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.

 

----

* The term loan facility bears interest based on applicable margin percentages of 3.0% per annum for base rate loans and 4.0% 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.

 

On 31 March 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, we drew down the term loan facility in full and using proceeds from the loan and our initial public offering, we discharged our 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 14 April 2014.

 

On 31 March 2014, the Group also repaid and terminated our previous super senior revolving facility using proceeds from the initial public offering. (see note 4c)

 

On 2 March 2015, the Group drew down an additional $150.0 million on the term loan facility.

 

On 25 June 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.

 

On 27 August 2015, the Group also repaid the outstanding amount owing for the Revolving Credit Facility using the proceeds from the term loan facility extension and 5.75% senior secured notes proceeds.

 

Maturity of the Group’s borrowings are as follows:

 
| ** **                   | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**    | ** ** |
|------------------------------|------------|----------|------------|----------|------------|-------------|------------|
| ** **                   | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**      | ** ** |
|                         |       |     |       |     |       |        |       |
| Less than one   year         |       | 82.4     |       | 113.4    |       | **98.3**    |       |
| Between one and   five years |       | 630.4    |       | 13.4     |       | **859.8**   |       |
| More than five   years       |       | —   |       | 485.8    |       | **206.5**   |       |
|                         |       |     |       |     |       |        |       |
|                         |       | 712.8    |       | 612.6    |       | **1,164.6** |       |

** **

F-63

----

Table of Contents

** **

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**18**           **Finance lease liabilities**

 

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

 
| ** **                                                       | ** ** | **2013**   | ** ** | **2014**   | ** ** | **2015**   | ** ** |
|------------------------------------------------------------------|------------|------------|------------|------------|------------|------------|------------|
| ** **                                                       | ** ** | **$m**     | ** ** | **$m**     | ** ** | **$m**     | ** ** |
| Gross finance   lease liabilities — minimum lease payments: |       |       |       |       |       |       |       |
| No later than 1   year                                           |       | (0.0       | )          | (0.0       | )          | **3.7**    |       |
| Later than 1   year and no later than 5 years                    |       | **—** |       | **—** |       | **11.9**   |       |
| Later than 5   years                                             |       | **—** |       | **—** |       | **194.2**  |       |
|                                                             |       |       |       |       |       |       |       |
|                                                             |       | (0.0       | )          | (0.0       | )          | **209.8**  |       |
| Future finance   charges on finance lease liabilities            |       | (0.0       | )          | (0.0       | )          | **(161.5** | **)**      |
|                                                             |       |       |       |       |       |       |       |
| **Present   value of finance lease liabilities**                 |       | (0.0       | )          | (0.0       | )          | **48.3**   |       |
|                                                             |       |       |       |       |       |       |       |
| The present   value of finance lease liabilities is as follows:  |       |       |       |       |       |       |       |
| No later than 1   year                                           |       | (0.0       | )          | (0.0       | )          | **0.3**    |       |
| Later than 1   year and no later than 5 years                    |       | **—** |       | **—** |       | **1.0**    |       |
| Later than 5 years                                               |       | **—** |       | **—** |       | **47.0**   |       |
|                                                             |       |       |       |       |       |       |       |
|                                                             |       | (0.0       | )          | (0.0       | )          | **48.3**   |       |

 

The difference between the minimum lease payments and the present value of the finance lease liabilities are due to the long duration of the lease (75 years remaining).

 

**19**           **Trade and other payables**

 
| ** **                              | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|-----------------------------------------|------------|----------|------------|----------|------------|------------|------------|
| ** **                              | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**     | ** ** |
| **Current**                             |       |     |       |     |       |       |       |
| Trade payables   due to third parties   |       | 12.3     |       | 12.4     |       | **31.3**   |       |
| Other taxes and   social security       |       | 1.6      |       | 3.1      |       | **3.1**    |       |
| Amounts owed to   parent undertaking    |       | 23.1     |       | —   |       | **—** |       |
| Amounts owed to   related parties       |       | 1.5      |       | 0.2      |       | **0.2**    |       |
| Other payables                          |       | 37.6     |       | 21.3     |       | **51.0**   |       |
| Contingent   consideration (see note 2) |       | —   |       | —   |       | **25.0**   |       |
| Deferred   consideration                |       | —   |       | 2.0      |       | **21.1**   |       |
| Accrued expenses                        |       | 20.7     |       | 24.7     |       | **39.2**   |       |
|                                    |       |     |       |     |       |       |       |
|                                    |       | 96.8     |       | 63.7     |       | **170.9**  |       |
|                                    |       |     |       |     |       |       |       |
| **Non-current**                         |       |     |       |     |       |       |       |
| Other payables                          |       | 38.5     |       | 47.7     |       | **30.5**   |       |
| Deferred   consideration                |       | —   |       | 3.0      |       | **15.2**   |       |
|                                    |       |     |       |     |       |       |       |
|                                    |       | 38.5     |       | 50.7     |       | **45.7**   |       |

 

F-64

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**20**           **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 $2.1 million (2014 - $1.2 million; 2013 - $1.0 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 31 August 2011, 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 1 September 2013 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 31 August 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 31 August 2015. In addition to this, there is one arising from College Du Léman SARL due to the acquisition. 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 31 August 2015. The details of the IAS 19R valuations are set out in the following tables:

 

F-65

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**20**           **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** | ** ** |
|----------------------------------------|------------|--------------|------------|-----------------|------------|
| ** **                             | ** ** | **2013   %** | ** ** | **2014   %**    | ** ** | **2015   %** | ** ** | **2013   %** | ** ** | **2014   %** | ** ** | **2015   %** | ** ** |
|                                   |       |         |       |            |       |   |   |   |   |   |   |   |   |
| Discount rate                          |       | 4.90         |       | 4.20            |       | **3.90** |   | 2.20 |   | 1.80 |   | **0.83** |   |
| Price inflation                        |       | 3.65         |       | 3.40            |       | **3.50** |   | 1.50 |   | 1.50 |   | **0.78** |   |
| Rate of increase   in salaries         |       | n/a          |       | n/a             |       | **n/a** |   | 1.00 |   | 1.00 |   | **1.30** |   |
| Rate of increase   in pension payments |       | 3.65         |       | 3.40            |       | **3.50** |   | 1.50 |   | n/a |   | **0.00** |   |
| Expected return   on plan assets       |       | 5.54         |       | n/a             |       | **n/a** |   | 2.50 |   | n/a |   | **n/a** |   |

 

**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**  | ** ** |
|------------------------------------------------------------|------------|------------|------------|------------------|------------|------------------|------------|
| ** **                                                 | ** ** | ** ** | ** ** | **2013   Years** | ** ** | **2014   years** | ** ** | **2015   years** | ** ** | **2013   years** | ** ** | **2014   years** | ** ** | **2015   years** | ** ** |
|                                                       |       |       |       |             |       |             |       |   |   |   |   |   |   |   |   |
| Retiring at   reporting date at age 65:                    |       | Male       |       | 22.1             |       | 22.2             |       | **23.0** |   | 21.1 |   | 21.3 |   | **21.5** |   |
|                                                       |       | Female     |       | 24.4             |       | 22.4             |       | **24.9** |   | 23.6 |   | 23.8 |   | **24.0** |   |
|                                                       |       |       |       |             |       |             |       | ** ** |   |   |   |   |   | ** ** |   |
| Retiring 20   years after the end of the reporting period: |       | Male       |       | 23.4             |       | 23.5             |       | **24.3** |   | 23.1 |   | 23.1 |   | **23.2** |   |
|                                                       |       | Female     |       | 25.9             |       | 26.0             |       | **26.4** |   | 25.5 |   | 25.6 |   | **25.7** |   |

 

The sensitivity of the defined benefit obligation to changes in the weighted principal assumption is:

 
| ** **      | ** ** | ** **           | ** **       | **UK**                                                  | ** **       | **Switzerland**                                         | ** **       |
|-----------------|------------|----------------------|------------------|---------------------------------------------------------|------------------|---------------------------------------------------------|------------------|
| ** **      | ** ** | ** **           | ** **       | **Increase in   assumption by   0.25%**       | ** **       | **Decrease in   assumption by   0.25%**       | ** **       | **Increase in   assumption by   0.25%** | ** ** | **Decrease in   assumption by   0.25%** | ** ** |
| Discount rate   |       | Change in obligation |             | Decrease by 5.8%                                        |             | Increase by 5.8%                                        |             | Decrease by 3.7% |   | Increase by 4.0% |   |
| Inflation       |       |                 | Increase by 5.8% |                                                    | Decrease by 5.8% |                                                    | Increase by 0.8% |   | Decrease by 0.8% |   |
|            |       |                 |             |                                                    |             |                                                    |             |   |   |   |   |
| ** **      | ** ** | ** **           | ** **       | **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 |       | Change in obligation |             | Increase by 2.9%                                        |             | Decrease by 2.9%                                        |             | Increase by 1.9% |   | Decrease by 1.9% |   |

 

F-66

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**20**                        **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** | ** ** |
|--------------------------------|------------|---------------|------------|-----------------|------------|
| ** **                     | ** ** | **2013   $m** | ** ** | **2014   $m**   | ** ** | **2015   $m** | ** ** | **2013   $m** | ** ** | **2014   $m** | ** ** | **2015   $m** | ** ** |
|                           |       |          |       |            |       |   |   |   |   |   |   |   |   |
| Equities                       |       | 22.8          |       | 28.0            |       | **15.4** |   | — |   | — |   | **—** |   |
| Diversified   Growth Assets    |       | 9.6           |       | 11.3            |       | **11.1** |   | — |   | — |   | **—** |   |
| Corporate bonds                |       | 1.2           |       | 1.3             |       | **9.5** |   | — |   | — |   | **—** |   |
| Cash                           |       | 0.8           |       | 2.2             |       | **4.2** |   | — |   | — |   | **—** |   |
| With profit   funds            |       | 0.8           |       | 0.8             |       | **2.4** |   | — |   | — |   | **—** |   |
| Insurance assets               |       | —        |       | —          |       | **0.4** |   | 21.1 |   | 22.8 |   | **69.6** |   |
|                           |       |          |       |            |       |   |   |   |   |   |   |   |   |
|                           |       | 35.2          |       | 43.6            |       | **43.0** |   | 21.1 |   | 22.8 |   | **69.6** |   |
|                           |       |          |       |            |       |   |   |   |   |   |   |   |   |
| Actual return on   plan assets |       | 4.8           |       | 4.3             |       | **1.6** |   | 0.0 |   | 0.9 |   | **0.4** |   |

 

F-67

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**20**                        **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** | ** ** |
|------------------------------------------------------------|------------|---------------|------------|-----------------|------------|
| ** **                                                 | ** ** | **2013   $m** | ** ** | **2014   $m**   | ** ** | **2015   $m** | ** ** | **2013   $m** | ** ** | **2014   $m** | ** ** | **2015   $m** | ** ** |
|                                                       |       |          |       |            |       |   |   |   |   |   |   |   |   |
| Opening fair   value of the defined benefit pension assets |       | 31.4          |       | 35.2            |       | **43.6** |   | 19.2 |   | 21.1 |   | **22.8** |   |
| Business   combination (see note 2)                        |       | —        |       | —          |       | **—** |   | — |   | — |   | **49.5** |   |
| Interest income                                            |       | 1.7           |       | 1.9             |       | **1.7** |   | 0.5 |   | 0.5 |   | **0.5** |   |
| Return on plan   assets greater than discount rate         |       | 3.2           |       | 2.4             |       | **(0.0** | **)** | (0.5 | ) | 0.4 |   | **(0.9** | **)** |
| Contributions by   employer                                |       | 0.7           |       | 3.1             |       | **3.1** |   | 1.4 |   | 1.5 |   | **2.3** |   |
| Contributions by   members                                 |       | —        |       | —          |       | **—** |   | 1.3 |   | 1.2 |   | **1.8** |   |
| Benefits paid                                              |       | (0.9          | )          | (1.6            | )          | **(2.2** | **)** | (1.2 | ) | (2.4 | ) | **(4.0** | **)** |
| Foreign currency   translation                             |       | (0.9          | )          | 2.6             |       | **(3.2** | **)** | 0.4 |   | 0.5 |   | **(2.4** | **)** |
|                                                       |       |          |       |            |       |   |   |   |   |   |   |   |   |
| Closing fair   value of defined benefit pension assets     |       | 35.2          |       | 43.6            |       | **43.0** |   | 21.1 |   | 22.8 |   | **69.6** |   |

 

Changes in the fair value of defined benefit pension obligation are as follows:

 
| ** **                                   | ** ** | **UK**        | ** ** | **Switzerland** | ** ** |
|----------------------------------------------|------------|---------------|------------|-----------------|------------|
| ** **                                   | ** ** | **2013   $m** | ** ** | **2014   $m**   | ** ** | **2015   $m** | ** ** | **2013   $m** | ** ** | **2014   $m** | ** ** | **2015   $m** | ** ** |
|                                         |       |          |       |            |       |   |   |   |   |   |   |   |   |
| Opening defined   benefit pension obligation |       | (56.8         | )          | (51.1           | )          | **(62.2** | **)** | (24.2 | ) | (27.4 | ) | **(29.9** | **)** |
| Business   combination (see note 2)          |       | —        |       | —          |       | **—** |   | — |   | — |   | **(63.3** | **)** |
| Current service   cost                       |       | —        |       | —          |       | **—** |   | (1.6 | ) | (1.9 | ) | **(2.9** | **)** |
| Past Service   Cost                          |       | —        |       | —          |       | **—** |   | — |   | 0.1 |   | **0.6** |   |
| Interest cost                                |       | (2.1          | )          | (2.6            | )          | **(2.3** | **)** | (0.5 | ) | (0.7 | ) | **(0.6** | **)** |
| Actuarial losses                             |       | 5.5           |       | (6.4            | )          | **(7.1** | **)** | (0.5 | ) | (1.5 | ) | **(3.3** | **)** |
| Contributions by   members                   |       | —        |       | —          |       | **—** |   | (1.3 | ) | (1.2 | ) | **(1.8** | **)** |
| Benefits paid                                |       | 0.9           |       | 1.6             |       | **2.2** |   | 1.2 |   | 2.4 |   | **4.0** |   |
| Foreign currency   translation               |       | 1.4           |       | (3.7            | )          | **4.6** |   | (0.5 | ) | 0.3 |   | **2.9** |   |
|                                         |       |          |       |            |       |   |   |   |   |   |   |   |   |
| Closing defined   benefit pension obligation |       | (51.1         | )          | (62.2           | )          | **(64.8** | **)** | (27.4 | ) | (29.9 | ) | **(94.3** | **)** |

 

F-68

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**20**           **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 for the three years ended 31 August 2015 are set out below:

 
| ** **                                                                                                                                                                                  | ** ** | **UK**   | ** ** | **Switzerland** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|-----------------|------------|
| **$m**                                                                                                                                                                                      | ** ** | **2013** | ** ** | **2014**        | ** ** | **2015** | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
| **Analysis   of the amount charged to operating profit:**                                                                                                                                   |       |     |       |            |       |   |   |   |   |   |   |   |   |
| Current service   cost                                                                                                                                                                      |       | —   |       | —          |       | **—** |   | (1.6 | ) | (1.9 | ) | **(2.9** | **)** |
| Past service   cost                                                                                                                                                                         |       | n/a      |       | n/a             |       | **n/a** |   | — |   | 0.1 |   | **0.6** |   |
|                                                                                                                                                                                        |       |     |       |            |       |   |   |   |   |   |   |   |   |
| **Analysis   of the amount credited/(charged) to finance income/(cost):**                                                                                                                   |       |     |       |            |       |   |   |   |   |   |   |   |   |
| Interest on   defined benefit pension assets                                                                                                                                                |       | 1.7      |       | 1.9             |       | **1.7** |   | 0.5 |   | 0.5 |   | **0.5** |   |
| Interest on   defined benefit pension obligation                                                                                                                                            |       | (2.1     | )          | (2.6            | )          | **(2.3** | **)** | (0.5 | ) | (0.7 | ) | **(0.6** | **)** |
|                                                                                                                                                                                        |       |     |       |            |       |   |   |   |   |   |   |   |   |
| Net pension   finance expense                                                                                                                                                               |       | (0.4     | )          | (0.7            | )          | **(0.6** | **)** | 0.0 |   | (0.2 | ) | **(0.1** | **)** |
|                                                                                                                                                                                        |       |     |       |            |       |   |   |   |   |   |   |   |   |
| Total charged to   the Consolidated Income Statement                                                                                                                                        |       | (0.4     | )          | (0.7            | )          | **(0.6** | **)** | (1.6 | ) | (2.0 | ) | **(2.4** | **)** |
|                                                                                                                                                                                        |       |     |       |            |       |   |   |   |   |   |   |   |   |
| **Analysis   of the amount recognized in the Consolidated Statement of Comprehensive   Income:**                                                                                            |       |     |       |            |       |   |   |   |   |   |   |   |   |
| Remeasurement   gains/(losses):                                                                                                                                                             |       |     |       |            |       |   |   |   |   |   |   |   |   |
| **-**                    Actuarial   changes arising from changes in demographic assumptions |       | —   |       | —          |       | **(0.9** | **)** | — |   | — |   | **—** |   |
| **-**                    Actuarial   changes arising from changes in financial assumptions   |       | 4.8      |       | (6.4            | )          | **(5.5** | **)** | 0.3 |   | (1.2 | ) | **(2.7** | **)** |
| **-**                    Experience   adjustments                                            |       | 3.9      |       | —          |       | **(0.7** | **)** | 0.7 |   | (0.3 | ) | **(0.6** | **)** |
|                                                                                                                                                                                        |       |     |       |            |       |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                        |       | 8.7      |       | (6.4            | )          | **(7.1** | **)** | (1.0 | ) | (1.5 | ) | **(3.3** | **)** |
| Return on plan   asset excl. interest income                                                                                                                                                |       | —   |       | 2.4             |       | **(0.0** | **)** | — |   | 0.4 |   | **(0.9** | **)** |
|                                                                                                                                                                                        |       |     |       |            |       |   |   |   |   |   |   |   |   |
| Total   gains/(losses) recognized in the Consolidated Statement of Comprehensive   Income                                                                                                   |       | 8.7      |       | (4.0            | )          | **(7.1** | **)** | (1.0 | ) | (1.1 | ) | **(4.2** | **)** |

 

The cumulative losses recognized through the Consolidated Statement of Comprehensive Income since the date of transition to IFRS (1 September 2009) are UK: $14.0 million (2014 - $6.9 million; 2013 - $2.9 million); and since the date of acquisition - Switzerland: $7.2 million (2014 - $3.0 million; 2013 - $1.9 million).

 

F-69

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**20**                        **Employee benefits***(continued)*

 

**Summary of movements in the deficit during the financial year**

 
| ** **                                                            | ** ** | **UK**        | ** ** | **Switzerland** | ** ** |
|-----------------------------------------------------------------------|------------|---------------|------------|-----------------|------------|
| ** **                                                            | ** ** | **2013   $m** | ** ** | **2014   $m**   | ** ** | **2015   $m** | ** ** | **2013   $m** | ** ** | **2014   $m** | ** ** | **2015   $m** | ** ** |
| Deficit in   schemes at the beginning of the year                     |       | (25.4         | )          | (15.9           | )          | **(18.6** | **)** | (5.0 | ) | (6.3 | ) | **(7.1** | **)** |
| Business   combination                                                |       | —        |       | —          |       | **—** |   | — |   | — |   | **(13.8** | **)** |
| Current service   cost                                                |       | —        |       | —          |       | **—** |   | (1.6 | ) | (1.9 | ) | **(2.9** | **)** |
| Past service   cost                                                   |       | —        |       | —          |       | **—** |   | — |   | 0.1 |   | **0.6** |   |
| Net pension   finance expense                                         |       | (0.4          | )          | (0.7            | )          | **(0.6** | **)** | 0.0 |   | (0.2 | ) | **(0.1** | **)** |
| Return on plan   asset, excluding amount included in interest expense |       | —        |       | 2.4             |       | **(0.0** | **)** | — |   | 0.4 |   | **(0.9** | **)** |
| Contributions by   employer                                           |       | 0.7           |       | 3.1             |       | **3.1** |   | 1.4 |   | 1.5 |   | **2.3** |   |
| Foreign currency   translation                                        |       | 0.5           |       | (1.1            | )          | **1.4** |   | (0.1 | ) | 0.8 |   | **0.5** |   |
| Actuarial losses                                                      |       | 8.7           |       | (6.4            | )          | **(7.1** | **)** | (1.0 | ) | (1.5 | ) | **(3.3** | **)** |
|                                                                  |       |          |       |            |       |   |   |   |   |   |   |   |   |
| **Deficit   in schemes at the end of the year net of deferred tax**   |       | (15.9         | )          | (18.6           | )          | **(21.8** | **)** | (6.3 | ) | (7.1 | ) | **(24.7** | **)** |

 

**History of movements**

 

The historical movement in defined benefit pension schemes’ assets and liabilities are as follows:

 
| ** **                                             | ** ** | **2011   $m** | ** ** | **2012   $m** | ** ** | **2013   $m** | ** ** | **2014   $m** | ** ** | **2015   $m** | ** ** |
|--------------------------------------------------------|------------|---------------|------------|---------------|------------|---------------|------------|---------------|------------|---------------|------------|
|                                                   |       |          |       |          |       |          |       |          |       |          |       |
| Closing fair   value of defined benefit pension assets |       | 50.3          |       | 50.6          |       | 56.3          |       | 66.4          |       | **112.6**     |       |
| Present value of   liabilities                         |       | (64.9         | )          | (81.0         | )          | (78.5         | )          | (92.2         | )          | **(159.1**    | **)**      |
|                                                   |       |          |       |          |       |          |       |          |       |          |       |
| Pension deficit                                        |       | (14.6         | )          | (30.4         | )          | (22.2         | )          | (25.8         | )          | **(46.5**     | **)**      |

 

Deficit in the Thailand pension scheme amounted to $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 $3.5 million was paid in September 2015 (September 2014 - $2.9 million, September 2013 - $2.7 million).

 

The Group expects to make normal cash contributions of approximately $7.9 million (2014 - $4.7 million, 2013 - $4.2 million) to defined benefit schemes in the financial year ending 31 August 2016.

 

F-70

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**20**           **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 1st 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 assumptions; the terms and conditions of the grants are as follows:

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

 

The fair value of each share was calculated as 2015 - $7.28 (2014 - $6.55).

 

Set out in the table below summarizes the options granted under the plan:

 
| ** **                            | ** ** | **2014**                                                           | ** ** | **2015**                             | ** ** |
|---------------------------------------|------------|--------------------------------------------------------------------|------------|--------------------------------------|------------|
| ** **                            | ** ** | **Average exercise   price per share   option   $** | ** ** | **Share options   (thousands)** | ** ** | **Average exercise   price per share   option   $** | ** ** | **Share options   (thousands)** | ** ** |
|                                  |       |                                                               |       |                                 |       |   |   |   |   |
| At 1 September                        |       | —                                                             |       | —                               |       | 18.09 |   | 448.7 |   |
| Granted                               |       | 18.09                                                              |       | 448.7                                |       | 19.57 |   | 519.4 |   |
| Forfeited                             |       | —                                                             |       | —                               |       | 18.50 |   | 41.5 |   |
| Exercised *                           |       | —                                                             |       | —                               |       | 18.00 |   | 8.2 |   |
| Expired                               |       | —                                                             |       | —                               |       | — |   | — |   |
|                                  |       |                                                               |       |                                 |       |   |   |   |   |
| At 31 August                          |       | 18.09                                                              |       | 448.7                                |       | 18.90 |   | 918.4 |   |
|                                  |       |                                                               |       |                                 |       |   |   |   |   |
| Vested and   exercisable at 31 August |       | —                                                             |       | —                               |       | 18.09 |   | 97.4 |   |

 

----

* The weighted average share price at the date of exercise of options exercised during the year ended 31 August 2015 was $21.20 (2014 — not applicable).

 

F-71

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**20**           **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)** | ** ** |
| ** **                                                                            | ** ** | ** **          | ** ** | ** **                    | ** ** | ** **             | ** ** | ** ** | ** ** |
| 30 May 2014                                                                      |       | 30 May 2024    |       | 18.00                         |       | 425.6                  |       | 389.2 |   |
| 14   July 2014                                                                   |       | 30 May 2024    |       | 19.58                         |       | 23.1                   |       | 23.1 |   |
| 9 January 2015                                                                   |       | 8 January 2025 |       | 19.57                         |       | —                 |       | 506.1 |   |
|                                                                                  |       |                |       |                          |       |                   |       |   |   |
|                                                                                  |       |                |       |                          |       | 448.7                  |       | 918.4 |   |
|                                                                                  |       |                |       |                          |       |                   |       |   |   |
| Weighted average   remaining contractual life of options outstanding at end of period |       |                |       |                          |       | 9.8 years              |       | 9.1 years |   |

 

**Lapsed scheme**

 

Prior to IPO in 2014, a share based payment scheme existed that provided management with the option to acquire class B — E shares, if certain vesting conditions were satisfied.

 

In March 2014 all vesting conditions on awards were fully satisfied and exercised as B — E shares by the holder. All classes of B- E shares were converted into ordinary shares on March 31, 2014 (see note 22).

 

Following the conversion, the scheme was extinguished with all charges fully recognized in the profit and loss prior to the conversion and extinguishment. No further options will be granted under this scheme and has been replaced by the 2014 Equity Incentive Award Plan.

 

A fair value for the shares issued was calculated using the Black-Scholes Option Pricing Model incorporating the following assumptions; the terms and conditions of the grants are as follows:

 
| ** **                   | ** ** | **Shares issued   2013** | ** ** | **Shares issued   2012** | ** ** | **Shares issued   2011** | ** ** | **Shares issued   2010** | ** ** |
|------------------------------|------------|-------------------------------|------------|-------------------------------|------------|-------------------------------|------------|-------------------------------|------------|
|                         |       |                          |       |                          |       |                          |       |                          |       |
| Exercise price               |       | $                             | 0.016281   |                          | $          | 0.016281                      |       | $                             | 0.016281   |   | $ | 0.01551 |   |
| Equity price   (fair value)  |       | $                             | 1.37       |                          | $          | 1.37                          |       | $                             | 0.1791     |   | $ | 0.1160 |   |
| Volatility                   |       | 100                           | %          | 100                           | %          | 100                           | %          | 100                           | %          |
| Dividend yield               |       | 0                             | %          | 0                             | %          | 0                             | %          | 0                             | %          |
| Risk free   interest rate    |       | 6                             | %          | 6                             | %          | 5                             | %          | 5                             | %          |
| Expected life to   exercise  |       | 3 years                       |       | 3 years                       |       | 1.5 years                     |       | 2.5 years                     |       |
| Number of shares   exercised |       | 51,599                        |       | 222,800                       |       | 360,145                       |       | 1,059,414                     |       |

 

F-72

----

Table of Contents

** **

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**21**                        **Provisions for other liabilities and charges**

 
| ** **                            | ** ** | **Property** | ** ** | **Legal**  | ** ** | **Other**  | ** ** | **Total**  | ** ** |
|---------------------------------------|------------|--------------|------------|------------|------------|------------|------------|------------|------------|
| ** **                            | ** ** | **$m**       | ** ** | **$m**     | ** ** | **$m**     | ** ** | **$m**     | ** ** |
| Balance at 1   September 2012    |       | 0.9          |       | —     |       | 4.5        |       | 5.4        |       |
| Provisions made   during the year     |       | —       |       | 0.7        |       | 3.1        |       | 3.8        |       |
| Provisions used   during the year     |       | (0.7         | )          | —     |       | (2.2       | )          | (2.9       | )          |
| Provisions   reversed during year     |       | (0.2         | )          | —     |       | (0.3       | )          | (0.5       | )          |
| Foreign exchange                      |       | —       |       | —     |       | 0.0        |       | 0.0        |       |
|                                  |       |         |       |       |       |       |       |       |       |
| Balance as at 31   August 2013   |       | —       |       | 0.7        |       | 5.1        |       | 5.8        |       |
|                                  |       |         |       |       |       |       |       |       |       |
| Balance at 1   September 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 year     |       | —       |       | —     |       | —     |       | —     |       |
| Foreign exchange                      |       | —       |       | —     |       | 0.0        |       | 0.0        |       |
|                                  |       |         |       |       |       |       |       |       |       |
| Balance as at 31   August 2014   |       | —       |       | 0.3        |       | 1.4        |       | 1.7        |       |
|                                  |       |         |       |       |       |       |       |       |       |
| Balance at 1 September 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 31 August 2015**  |       | **—**   |       | **0.8**    |       | **0.9**    |       | **1.7**    |       |
|                                  |       |         |       |       |       |       |       |       |       |
| Current                               |       | **—**   |       | **—** |       | **—** |       | **—** |       |
| Non-current                           |       | **—**   |       | 0.8        |       | 0.9        |       | 1.7        |       |
|                                  |       |         |       |       |       |       |       |       |       |
|                                  |       | **—**   |       | **0.8**    |       | **0.9**    |       | **1.7**    |       |

 

Legal provisions relate to school acquisition cost with the integration of newly acquired subsidiaries and is unlikely to be utilized within one year. Other provisions relate to costs associated with overseas employees. The overseas employee provision is likely to be utilized over several years, although the timing of utilization is uncertain.

 

F-73

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**22**                        **Capital and reserves**

 

**Group and Company**

** **

**Share capital**

 
| ** **                                         | ** ** | ** **    | ** ** | **31 August 2013** | ** ** | ** **    | ** ** | **31 August   2014** | ** ** | ** **        | ** ** | **31 August   2015** | ** ** |
|----------------------------------------------------|------------|---------------|------------|------------------------------|------------|---------------|------------|---------------------------|------------|-------------------|------------|---------------------------|------------|
| **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**                  |       |
| Ordinary shares   ‘A’ of $0.016281 each  |       | 300,000,000   |       | 4.8                          |       | —        |       | —                    |       | —            |       | —                    |       |
| Ordinary shares   ‘B’ of $0.016281 each  |       | 841,623       |       | 0.0                          |       | —        |       | —                    |       | —            |       | —                    |       |
| Ordinary shares   ‘C’ of $0.016281 each  |       | 210,406       |       | 0.0                          |       | —        |       | —                    |       | —            |       | —                    |       |
| Ordinary shares   ‘D’ of $0.016281 each  |       | 273,527       |       | 0.0                          |       | —        |       | —                    |       | —            |       | —                    |       |
| Ordinary shares   ‘E’ of $0.016281 each  |       | 3,000,000     |       | 0.1                          |       | —        |       | —                    |       | —            |       | —                    |       |
| Ordinary shares   ‘F’ of $0.016281 each  |       | 801,653       |       | 0.0                          |       | —        |       | —                    |       | —            |       | —                    |       |
| Ordinary shares   ‘G’ of £0.01 each |       | 100,000,000   |       | 1.6                          |       | —        |       | —                    |       | —            |       | —                    |       |
| Deferred shares   of $0.016281 each                |       | 200,000,000   |       | 3.3                          |       | —        |       | —                    |       | —            |       | —                    |       |
| Dollar deferred   shares of $0.01 each             |       | 6,500,000,000 |       | 65.0                         |       | —        |       | —                    |       | —            |       | —                    |       |
| Redeemable   Preference shares of $1.00 each       |       | 65,246,057    |       | 65.2                         |       | —        |       | —                    |       | —            |       | —                    |       |
| Redeemable New   preference shares of $0.01 each   |       | 4,475,805     |       | 0.1                          |       | —        |       | —                    |       | —            |       | —                    |       |
|                                               |       |          |       |                         |       |          |       |                      |       |              |       |                      |       |
|                                               |       | 7,174,849,071 |       | 140.1                        |       | 2,000,000,000 |       | 20.0                      |       | **2,000,000,000** |       | **20.0**                  |       |

 

F-74

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 (*continued)***

 

**22**                        **Capital and reserves***(continued)*

 
| ** **                                                      | ** ** | ** **  | ** ** | **31 August** | ** ** | ** ** | ** ** | **31 August   2014** | ** ** | ** **      | ** ** | **31 August   2015** | ** ** |
|-----------------------------------------------------------------|------------|-------------|------------|--------------------|------------|------------|------------|---------------------------|------------|-----------------|------------|---------------------------|------------|
| **Allotted, called up and fully paid** | ** ** | **No.**     | ** ** | **2013**           | ** ** | **No.**    | ** ** | **$m**                    | ** ** | **No.**         | ** ** | **$m**                    | ** ** |
|                                                            |       |        |       |               |       |       |       |                      |       |            |       |                      |       |
| Ordinary shares   of $0.01 each                                 |       | —      |       | —             |       | 97,747,778 |       | 1.0                       |       | **104,091,367** |       | **1.0**                   |       |
| Ordinary shares ‘A’   of $0.016281 each               |       | 137,045,844 |       | 2.2                |       | —     |       | —                    |       | —          |       | —                    |       |
| Ordinary shares   ‘B’ of $0.016281 each               |       | 841,623     |       | 0.0                |       | —     |       | —                    |       | —          |       | —                    |       |
| Ordinary shares   ‘C’ of $0.016281 each               |       | 210,406     |       | 0.0                |       | —     |       | —                    |       | —          |       | —                    |       |
| Ordinary shares   ‘D’ of $0.016281 each               |       | 136,763     |       | 0.0                |       | —     |       | —                    |       | —          |       | —                    |       |
| Ordinary shares   ‘E’ of $0.016281 each               |       | 2,212,188   |       | 0.1                |       | —     |       | —                    |       | —          |       | —                    |       |
| Ordinary shares   ‘F’ of $0.016281 each               |       | 801,653     |       | 0.0                |       | —     |       | —                    |       | —          |       | —                    |       |
| Deferred shares   of $0.016281 each                             |       | 100         |       | 0.0                |       | —     |       | —                    |       | —          |       | —                    |       |
| Dollar deferred   shares of $0.01 each                          |       | —      |       | 0.0                |       | —     |       | —                    |       | —          |       | —                    |       |
| Redeemable   Preference shares of $1.00 each                    |       | 65,246,057  |       | 65.2               |       | —     |       | —                    |       | —          |       | —                    |       |
| Redeemable New   preference shares of $0.01 each                |       | 2,113,052   |       | 0.0                |       | —     |       | —                    |       | —          |       | —                    |       |
|                                                            |       |        |       |               |       |       |       |                      |       |            |       |                      |       |
|                                                            |       | 208,607,686 |       | 67.5               |       | 97,747,778 |       | 1.0                       |       | **104,091,367** |       | **1.0**                   |       |

 

* Redeemable preference shares (RPS) were classified as equity as the terms of the RPS were that the redemption rights were at the full discretion of the issuer.

 

·                  Only the issuer had the option to redeem the shares at a future date, i.e. the holder could not call the shares.

·                  The RPS had the same rights as the ordinary shares with respect to dividends and there was not mandatory right for the holder to receive dividends. Payment of dividends was at the discretion of the issuer.

 

As such it was determined that the RPS had equity features and there was an unconditional right to defer payment and this was treated as equity in accordance with IAS 32.

 

F-75

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**22**                        **Capital and reserves***(continued)*

 
| ** **                                       | ** ** | **Ordinary   shares   $m** | ** ** | **Redeemable   preference   shares   $m** | ** ** | **Share   premium   $m** | ** ** |
|--------------------------------------------------|------------|----------------------------|------------|-------------------------------------------|------------|--------------------------|------------|
| At 1   September 2013                       |       | 2.3                        |       | 65.2                                      |       | 256.5                    |       |
|                                             |       |                       |       |                                      |       |                     |       |
| Issued during   the year                         |       | 1.0                        |       | 0.0                                       |       | 366.9                    |       |
| Transaction cost   recognised directly in equity |       | —                     |       | —                                    |       | (29.6                    | )          |
| Return of   capital to pre IPO shareholders      |       | —                     |       | —                                    |       | 4.0                      |       |
| Forgiveness of   the loan                        |       | —                     |       | —                                    |       | 14.3                     |       |
| Distribution to   parent                         |       | —                     |       | —                                    |       | (15.0                    | )          |
| Share redemption                                 |       | (2.3                       | )          | (65.2                                     | )          | —                   |       |
|                                             |       |                       |       |                                      |       |                     |       |
| At 31   August 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 31   August 2015**                     |       | **1.0**                    |       | **—**                                |       | **735.2**                |       |
|                                             |       |                       |       |                                      |       |                     |       |
| ** **                                       | ** ** | **2013   $m**              | ** ** | **2014   $m**                             | ** ** | **2015   $m**            | ** ** |
|                                             |       |                       |       |                                      |       |                     |       |
| Shares classed   as liabilities                  |       | —                     |       | —                                    |       | —                   |       |
| Shares classified   in shareholders’ funds  |       | 67.5                       |       | 1.0                                       |       | 1.0                      |       |
|                                             |       |                       |       |                                      |       |                     |       |
| Shares   classified in shareholders’ funds  |       | 67.5                       |       | 1.0                                       |       | **1.0**                  |       |

 

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 6 December 2013, the Company issued 1 preference share with an aggregate nominal par value of $1 with a share premium of $3.8 million per share was issued with Premier Education Holdings Limited (immediate parent company) for financing purposes.

 

On 17 February 2014, 1 preference share with an aggregate nominal value of $1 was issued at par with a share premium of $14.5 million per share. The share was issued to Premier Education Holdings Limited in respect of the outstanding consideration due on the transfer of British International School Abu Dhabi LLC to the Group.

 

On 31 March 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 2 March 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 25 June 2015, the Company to part fund the acquisition of the Sterling International Schools C Corporation 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 Meritas schools.

 

*Currency translation reserve*

 

The currency translation reserve comprises all foreign exchange differences arising since 1 September 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.

 

F-76

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**23**                        **Financial instruments**

 

***2******3******(a) 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 option is determined through the use of valuation techniques which maximize observable market data as the instruments are not traded in an active market.

 

*Fair values*

 

The fair values of all financial assets and financial liabilities by class together with their carrying amounts shown in the balance sheet are as follows:

 
| ** **                                                              | ** ** | **Carrying   amount** | ** ** | **Fair   value** | ** ** | **Carrying   amount** | ** ** | **Fair   value** | ** ** | **Carrying   amount** | ** ** | **Fair   value** | ** ** |
|-------------------------------------------------------------------------|------------|-----------------------|------------|------------------|------------|-----------------------|------------|------------------|------------|-----------------------|------------|------------------|------------|
| ** **                                                              | ** ** | **2013**              | ** ** | **2013**         | ** ** | **2014**              | ** ** | **2014**         | ** ** | **2015**              | ** ** | **2015**         | ** ** |
| ** **                                                              | ** ** | **$m**                | ** ** | **$m**           | ** ** | **$m**                | ** ** | **$m**           | ** ** | **$m**                | ** ** | **$m**           | ** ** |
|                                                                    |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| **Derivate   financial assets**                                         |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| Financial asset   classified at fair value through profit or loss       |       | **—**            |       | **—**       |       | —                |       | —           |       | **—**            |       | **—**       |       |
|                                                                    |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| **Loans   and receivables**                                             |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| Cash and cash   equivalents (see note 16)                               |       | 222.9                 |       | 222.9            |       | 256.4                 |       | 256.4            |       | **317.0**             |       | **317.0**        |       |
| Other loans and   receivables                                           |       | 75.1                  |       | 75.1             |       | 81.5                  |       | 81.5             |       | **117.0**             |       | **117.0**        |       |
|                                                                    |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| Total financial   assets                                                |       | 298.0                 |       | 298.0            |       | 337.9                 |       | 337.9            |       | **434.0**             |       | **434.0**        |       |
|                                                                    |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| **Derivative   financial liabilities**                                  |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| Financial   liabilities classified at fair value through profit or loss |       | **—**            |       | **—**       |       | **—**            |       | **—**       |       | **(3.0**              | **)**      | **(3.0**         | **)**      |
|                                                                    |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| **Financial   liabilities measured at amortized cost**                  |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| Other   interest-bearing loans and borrowings (see note 17)             |       | (712.8                | )          | (765.2           | )          | (612.6                | )          | (612.6           | )          | **(1,164.6**          | **)**      | **(1,176.1**     | **)**      |
| Trade and other   payables                                              |       | (111.8                | )          | (111.8           | )          | (111.2                | )          | (111.2           | )          | **(197.3**            | **)**      | **(197.3**       | **)**      |
| Finance lease   liabilities                                             |       | **—**            |       | **—**       |       | —                |       | —           |       | **(48.3**             | **)**      | **(48.3**        | **)**      |
|                                                                    |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| Total financial   liabilities                                           |       | (824.6                | )          | (877.0           | )          | (723.8                | )          | (723.8           | )          | **(1,413.2**          | **)**      | **(1,424.7**     | **)**      |
|                                                                    |       |                  |       |             |       |                  |       |             |       |                  |       |             |       |
| Net financial   instruments                                             |       | (526.6                | )          | (579.0           | )          | (385.9                | )          | (385.9           | )          | **(979.2**            | **)**      | **(990.7**       | **)**      |

 

F-77

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2****3**           **Financial instruments***(continued)*

 

***23 (a) 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** | ** ** |
|--------------------------------------------------------------------------|------------|------------------|------------|------------------|------------|------------------|------------|-----------|------------|
| **2013**                                                                 | ** ** | **$m**           | ** ** | **$m**           | ** ** | **$m**           | ** ** | **$m**    | ** ** |
|                                                                     |       |             |       |             |       |             |       |      |       |
| Cash and cash equivalents                                                |       | 222.9            |       | —           |       | —           |       | 222.9     |       |
| Other loans and   receivables                                            |       | —           |       | 75.1             |       | —           |       | 75.1      |       |
| Trade and other   payables                                               |       | —           |       | (111.8           | )          | —           |       | (111.8    | )          |
| Finance lease   liabilities                                              |       | —           |       | (0.0             | )          | —           |       | (0.0      | )          |
| Other   interest-bearing loans                                           |       | —           |       | (765.2           | )          | —           |       | (765.2    | )          |
| Financial liabilities   designated at fair value through profit and loss |       | —           |       | —           |       | —           |       | —    |       |
| Derivative   financial assets                                            |       | —           |       | —           |       | —           |       | —    |       |
| Derivative   financial liabilities                                       |       | —           |       | —           |       | —           |       | —    |       |
|                                                                     |       |             |       |             |       |             |       |      |       |
|                                                                     |       | 222.9            |       | (801.9           | )          | —           |       | (579.0    | )          |

 
| ** **                                                               | ** ** | **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    | )          |
| Financial   liabilities designated at fair value through profit and loss |       | —           |       | —           |       | —           |       | —    |       |
| Derivative   financial assets                                            |       | —           |       | —           |       | —           |       | —    |       |
| Derivative   financial liabilities                                       |       | —           |       | —           |       | —           |       | —    |       |
|                                                                     |       |             |       |             |       |             |       |      |       |
|                                                                     |       | 256.4            |       | (642.3           | )          | —           |       | (385.9    | )          |

 
| ** **                                                               | ** ** | **Level 1** | ** ** | **Level 2** | ** ** | **Level 3** | ** ** | **Total** | ** ** |
|--------------------------------------------------------------------------|------------|------------------|------------|------------------|------------|------------------|------------|-----------|------------|
| **2015**                                                                 | ** ** | **$m**           | ** ** | **$m**           | ** ** | **$m**           | ** ** | **$m**    | ** ** |
| Cash and cash   equivalents                                              |       | 317.0            |       | —           |       | —           |       | 317.0     |       |
| Other loans and   receivables                                            |       | —           |       | 117.0            |       | —           |       | 117.0     |       |
| Trade and other   payables                                               |       | —           |       | (197.3           | )          | —           |       | (197.3    | )          |
| Finance lease   liabilities                                              |       | —           |       | (48.3            | )          | —           |       | (48.3     | )          |
| Other   interest-bearing loans                                           |       | —           |       | (1,176.1         | )          | —           |       | (1,176.1  | )          |
| Financial   liabilities designated at fair value through profit and loss |       | —           |       | —           |       | —           |       | —    |       |
| Derivative   financial assets                                            |       | —           |       | —           |       | —           |       | —    |       |
| Derivative   financial liabilities                                       |       | —           |       | —           |       | 3.0              |       | 3.0       |       |
|                                                                     |       |             |       |             |       |             |       |      |       |
|                                                                     |       | 317.0            |       | (1,304.7         | )          | 3.0              |       | (984.7    | )          |

 

F-78

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**2****3**           **Financial instruments***(continued)*

 

***23 (a) Fair values of financial instruments****(continued)*

 

**Transfers between level 2 and 3**

 

There are no transfers between level 2 and 3 in the year.

 

**Description of significant unobservable inputs to valuation**

 

The valuation of the financial derivative liability, 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. We adopted the Put-Call Parity to perform the valuation on this call option.

 

**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 31 December 2015:

 
| ** **                    | ** ** | **Call option   $m** | ** ** |
|-------------------------------|------------|---------------------------|------------|
| As at 1   September 2014 |       | —                    |       |
| Acquisitions                  |       | 3.0                       |       |
|                          |       |                      |       |
| As at 31   August 2015   |       | 3.0                       |       |

 

***2******3******(b) 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*

 

The carrying amount of financial assets other than cash and cash equivalents represents the maximum credit exposure. 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 $117.0 million (2014 - $81.5 million, 2013 - $75.1 million) being the total of the carrying amount of financial assets.

 

F-79

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**2****3**           **Financial instruments***(continued)*

 

***2******3******(b) Credit risk****(continued)*

 

*Financial assets*

 

The maximum exposure to credit risk for financial assets at the reporting date by currency was:

 
| ** **                                 | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**  | ** ** |
|--------------------------------------------|------------|----------|------------|----------|------------|-----------|------------|
| ** **                                 | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**    | ** ** |
|                                       |       |     |       |     |       |      |       |
| Sterling                                   |       | 7.2      |       | 4.6      |       | **4.1**   |       |
| Dollar and   Dollar peg currencies         |       | 22.9     |       | 30.4     |       | **51.4**  |       |
| Chinese Renminbi                           |       | 15.0     |       | 3.9      |       | **6.3**   |       |
| European   currencies (excluding Sterling) |       | 8.6      |       | 11.3     |       | **9.9**   |       |
| Malaysian   Ringgit                        |       | 4.6      |       | 0.8      |       | **0.6**   |       |
| Swiss Franc                                |       | 13.7     |       | 25.3     |       | **28.3**  |       |
| Thai Baht                                  |       | 3.1      |       | 3.0      |       | **3.7**   |       |
| Singapore Dollar                           |       | —   |       | 2.2      |       | **1.5**   |       |
| Vietnamese Dong                            |       | —   |       | —   |       | **10.1**  |       |
| Mexican Peso                               |       | —   |       | —   |       | **1.1**   |       |
|                                       |       |     |       |     |       |      |       |
|                                       |       | 75.1     |       | 81.5     |       | **117.0** |       |

 

The maximum exposure to credit risk for financial assets at the reporting date by type of counterparty was:

 
| ** **                                   | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**   | ** ** |
|----------------------------------------------|------------|----------|------------|----------|------------|------------|------------|
| ** **                                   | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**     | ** ** |
|                                         |       |     |       |     |       |       |       |
| School fees                                  |       | 40.1     |       | 60.4     |       | **88.5**   |       |
| Amounts   receivable through other contracts |       | 9.6      |       | 9.3      |       | **3.8**    |       |
| Rental deposits                              |       | —   |       | 3.6      |       | **15.1**   |       |
| Cash deposit   accounts                      |       | 13.9     |       | —   |       | **—** |       |
| Others                                       |       | 11.5     |       | 8.2      |       | **9.6**    |       |
|                                         |       |     |       |     |       |       |       |
|                                         |       | 75.1     |       | 81.5     |       | **117.0**  |       |

 

F-80

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2****3**           **Financial instruments***(continued)*

 

***2******3******(b) Credit risk****(continued)*

 

*Credit quality of financial assets and impairment losses*

 

The ageing of trade receivables at the reporting date was:

 
| ** **                    | ** ** | **2013**              | ** ** | ** **                       | ** ** | **2014**                            | ** ** | ** ** | ** ** |
|-------------------------------|------------|-----------------------|------------|----------------------------------|------------|-------------------------------------|------------|------------|------------|
| ** **                    | ** ** | **Not impaired** | ** ** | **Subject to   impairment** | ** ** | **Provision for   impairment** | ** ** | **Total**  | ** ** | **Not impaired** | ** ** | **Subject to   impairment** | ** ** | **Provision for   impairment** | ** ** | **Total** | ** ** |
| ** **                    | ** ** | **$m**                | ** ** | **$m**                           | ** ** | **$m**                              | ** ** | **$m**     | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** |
|                          |       |                  |       |                             |       |                                |       |       |       |   |   |   |   |   |   |   |   |
| Not past due                  |       | 24.7                  |       | —                           |       | —                              |       | 24.7       |       | 40.8 |   | 0.1 |   | (0.1 | ) | 40.8 |   |
| Less than 1   month past due  |       | 11.2                  |       | —                           |       | —                              |       | 11.2       |       | 8.2 |   | — |   | — |   | 8.2 |   |
| 1 – 3 months   past due  |       | 11.2                  |       | —                           |       | —                              |       | 11.2       |       | 20.5 |   | 0.3 |   | (0.3 | ) | 20.5 |   |
| More than 3   months past due |       | —                |       | 3.7                              |       | (1.1                                | )          | 2.6        |       | — |   | 4.4 |   | (4.3 | ) | 0.1 |   |
|                          |       |                  |       |                             |       |                                |       |       |       |   |   |   |   |   |   |   |   |
|                          |       | 47.1                  |       | 3.7                              |       | (1.1                                | )          | 49.7       |       | 69.5 |   | 4.8 |   | (4.7 | ) | 69.6 |   |

 
| ** **                    | ** ** | **2015**              | ** ** | ** **                       | ** ** |
|-------------------------------|------------|-----------------------|------------|----------------------------------|------------|
| ** **                    | ** ** | **Not impaired** | ** ** | **Subject to   impairment** | ** ** | **Provision for   impairment** | ** ** | **Total** | ** ** |
| ** **                    | ** ** | **$m**                | ** ** | **$m**                           | ** ** | **$m** | ** ** | **$m** | ** ** |
|                          |       |                  |       |                             |       |   |   |   |   |
| Not past due                  |       | 35.5                  |       | 0.0                              |       | (0.0 | ) | 35.5 |   |
| Less than 1   month past due  |       | 22.5                  |       | 0.1                              |       | (0.1 | ) | 22.5 |   |
| 1 – 3 months   past due  |       | 29.3                  |       | 0.2                              |       | (0.2 | ) | 29.3 |   |
| More than 3   months past due |       | —                |       | 11.5                             |       | (6.5 | ) | 5.0 |   |
|                          |       |                  |       |                             |       |   |   |   |   |
|                          |       | 87.3                  |       | 11.8                             |       | (6.8 | ) | 92.3 |   |

 

The Group defines impaired trade receivables to include those in legal hands or unrecoverable due to financial difficulties. The trade receivables that are past due but not impaired relate to customers for whom there is no history of default.

 

F-81

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**2****3**           **Financial instruments***(continued)*

 

***2******3******(b) 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:

 
| ** **                             | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
|----------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| ** **                             | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**   | ** ** |
|                                   |       |     |       |     |       |     |       |
| Balance at 1   September               |       | 0.9      |       | 1.1      |       | **4.7**  |       |
| Impairment loss   recognized           |       | 0.9      |       | 3.9      |       | **5.6**  |       |
| Impairment loss   reversed             |       | (0.7     | )          | (0.3     | )          | **(2.2** | **)**      |
| Impairment loss   written off          |       | —   |       | —   |       | **(1.2** | **)**      |
| Effect of   foreign exchange movements |       | 0.0      |       | 0.0      |       | **(0.1** | **)**      |
|                                   |       |     |       |     |       |     |       |
| Balance at 31   August                 |       | 1.1      |       | 4.7      |       | **6.8**  |       |

 

**Liquidity risk — Group**

 

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the effect of netting agreements:

 
| ** **                  | ** ** | **2013**                                         | ** ** | ** **                     | ** ** | ** **                 | ** ** | ** **                 | ** ** | ** **                 | ** ** | **2014**                                         | ** ** | ** **                     | ** ** | ** **                 | ** ** | ** **                 | ** ** | ** **                 | ** ** |
|-----------------------------|------------|--------------------------------------------------|------------|--------------------------------|------------|----------------------------|------------|----------------------------|------------|----------------------------|------------|--------------------------------------------------|------------|--------------------------------|------------|----------------------------|------------|----------------------------|------------|----------------------------|------------|
| ** **                  | ** ** | **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              |       | 51.8                                             |       | 51.8                           |       | —                     |       | —                     |       | —                     |       | 90.2                                             |       | 90.2                           |       | —                     |       | —                     |       | —                     |       |
| Borrowings                  |       | 912.6                                            |       | 71.8                           |       | 68.5                       |       | 772.3                      |       | —                     |       | 688.4                                            |       | 48.6                           |       | 28.7                       |       | 85.9                       |       | 525.2                      |       |
| Finance lease   liabilities |       | 0.0                                              |       | 0.0                            |       | 0.0                        |       | —                     |       | —                     |       | 0.0                                              |       | 0.0                            |       | —                     |       | —                     |       | —                     |       |
| Trade and other   payables  |       | 111.8                                            |       | 103.5                          |       | 7.7                        |       | 0.6                        |       | —                     |       | 111.2                                            |       | 60.5                           |       | 7.6                        |       | 18.4                       |       | 24.7                       |       |
| Derivatives                 |       | —                                           |       | —                         |       | —                     |       | —                     |       | —                     |       | —                                           |       | —                         |       | —                     |       | —                     |       | —                     |       |
|                        |       |                                             |       |                           |       |                       |       |                       |       |                       |       |                                             |       |                           |       |                       |       |                       |       |                       |       |
|                        |       | 1,076.2                                          |       | 227.1                          |       | 76.2                       |       | 772.9                      |       | —                     |       | 889.8                                            |       | 199.3                          |       | 36.3                       |       | 104.3                      |       | 549.9                      |       |

 

F-82

----

 

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2****3**           **Financial instruments***(continued)*

 

***2******3******(c) Liquidity risk****(continued)*

 

**Liquidity risk — Group**

 
| ** **                  | ** ** | **2015**                                         | ** ** | ** **                     | ** ** | ** **                 | ** ** | ** **                 | ** ** | ** **                       | ** ** |
|-----------------------------|------------|--------------------------------------------------|------------|--------------------------------|------------|----------------------------|------------|----------------------------|------------|----------------------------------|------------|
| ** **                  | ** ** | **Undiscounted   contractual   cash flows** | ** ** | **1 year   or less** | ** ** | **1 to   <2years** | ** ** | **2 to   <5years** | ** ** | **5 years and   over** | ** ** |
| ** **                  | ** ** | **$m**                                           | ** ** | **$m**                         | ** ** | **$m**                     | ** ** | **$m**                     | ** ** | **$m**                           | ** ** |
|                        |       |                                             |       |                           |       |                       |       |                       |       |                             |       |
| Bank overdraft              |       | 90.7                                             |       | 90.7                           |       | —                     |       | —                     |       | —                           |       |
| Borrowings                  |       | 1,438.2                                          |       | 69.7                           |       | 66.0                       |       | 130.7                      |       | 1,171.8                          |       |
| Finance lease   liabilities |       | 48.3                                             |       | 0.3                            |       | 0.3                        |       | 0.7                        |       | 47.0                             |       |
| Trade and other   payables  |       | 197.3                                            |       | 167.3                          |       | 9.6                        |       | 12.9                       |       | 7.5                              |       |
| Derivatives                 |       | 3.0                                              |       | —                         |       | —                     |       | 3.0                        |       | —                           |       |
|                        |       |                                             |       |                           |       |                       |       |                       |       |                             |       |
|                        |       | 1,777.5                                          |       | 328.0                          |       | 75.9                       |       | 147.3                      |       | 1,226.3                          |       |

 

***2******3******(d) 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.

 

**Market risk - 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 dollars and euros to try to minimize exchange fluctuation risks.

 

In consideration of benefits against cost, the Group does not hedge its translation exposure, but will consider managing transactional exposures by using forward cover instruments where significant transactions are involved.

 

F-83

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 (*continued)***

 

**2****3**           **Financial instruments***(continued)*

 

**23**                        ***(d) Market risk****(continued)*

 

The Group’s exposure to foreign currency risk is as follows. This is based on the carrying amount for monetary financial instruments except derivatives when it is based on notional amounts.

 
| ** **                   | ** ** | **Sterling** | ** ** | **European   currencies** | ** ** | **US dollar and   US dollar peg** | ** ** | **Singapore   Dollar** | ** ** | **Swiss   Franc** | ** ** | **Total** | ** ** |
|------------------------------|------------|--------------|------------|---------------------------|------------|-------------------------------------------------------|------------|------------------------|------------|-------------------|------------|-----------|------------|
| **31 August 2013** | ** ** | **$m**       | ** ** | **$m**                    | ** ** | **$m**                                                | ** ** | **$m**                 | ** ** | **$m**            | ** ** | **$m**    | ** ** |
|                         |       |         |       |                      |       |                                                  |       |                   |       |              |       |      |       |
| Cash and cash   equivalents  |       | 0.1          |       | 7.6                       |       | 1.9                                                   |       | —                 |       | 6.9               |       | 16.5      |       |
| Trade and other   payables   |       | (0.1         | )          | —                    |       | —                                                |       | —                 |       | —            |       | (0.1      | )          |
|                         |       |         |       |                      |       |                                                  |       |                   |       |              |       |      |       |
|                         |       | —       |       | 7.6                       |       | 1.9                                                   |       | —                 |       | 6.9               |       | 16.4      |       |

 
| ** **                   | ** ** | **Sterling** | ** ** | **European   currencies** | ** ** | **US dollar and   US dollar peg** | ** ** | **Singapore   Dollar** | ** ** | **Swiss   Franc** | ** ** | **Total** | ** ** |
|------------------------------|------------|--------------|------------|---------------------------|------------|-------------------------------------------------------|------------|------------------------|------------|-------------------|------------|-----------|------------|
| **31 August 2014** | ** ** | **$m**       | ** ** | **$m**                    | ** ** | **$m**                                                | ** ** | **$m**                 | ** ** | **$m**            | ** ** | **$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      |       |

 
| ** **                     | ** ** | **Sterling** | ** ** | **European   currencies** | ** ** | **US dollar and   US dollar peg** | ** ** | **Singapore   Dollar** | ** ** | **Swiss   Franc** | ** ** | **Total**  | ** ** |
|--------------------------------|------------|--------------|------------|---------------------------|------------|-------------------------------------------------------|------------|------------------------|------------|-------------------|------------|------------|------------|
| **31 August 2015**   | ** ** | **$m**       | ** ** | **$m**                    | ** ** | **$m**                                                | ** ** | **$m**                 | ** ** | **$m**            | ** ** | **$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** | **)**      |

 

F-84

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**23**                        **Financial instruments***(continued)*

 

***2******3******(d) Market risk****(continued)*

 

**Market risk — Foreign currency 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 (2014 & 2013 - 1% strengthening) of the following currencies against the US dollar at 31 August would have increased/(decreased) equity and profit or loss by the amounts shown below.

 
| ** **                                 | ** ** | **Profit or loss** | ** ** | **Equity** | ** ** |
|--------------------------------------------|------------|------------------------------|------------|------------|------------|
| ** **                                 | ** ** | **2013**                     | ** ** | **2014**   | ** ** | **2015** | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
| ** **                                 | ** ** | **$m**                       | ** ** | **$m**     | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** |
|                                       |       |                         |       |       |       |   |   |   |   |   |   |   |   |
| Sterling                                   |       | 0.3                          |       | 0.6        |       | **3.8** |   | 0.6 |   | 1.2 |   | **15.5** |   |
| European   currencies (excluding Sterling) |       | 0.1                          |       | 0.1        |       | **0.3** |   | 0.3 |   | 0.3 |   | **5.3** |   |
| Chinese Renminbi                           |       | 0.5                          |       | 0.4        |       | **1.4** |   | 0.4 |   | 0.6 |   | **2.8** |   |
| Swiss Franc                                |       | 0.0                          |       | (0.0       | )          | **0.5** |   | (0.0 | ) | (0.1 | ) | **1.2** |   |
| Vietnamese Dong                            |       | n/a                          |       | n/a        |       | **0.4** |   | n/a |   | n/a |   | **0.4** |   |
| Singaporean   dollar                       |       | n/a                          |       | 0.0        |       | **0.1** |   | n/a |   | 0.1 |   | **0.2** |   |
| Malaysian   Ringgit                        |       | 0.0                          |       | 0.0        |       | **0.0** |   | n/a |   | 0.1 |   | **0.2** |   |
| Thai Baht                                  |       | 0.0                          |       | 0.1        |       | **0.4** |   | 0.0 |   | 0.0 |   | **0.1** |   |
| Mexican Peso                               |       | n/a                          |       | n/a        |       | **0.0** |   | n/a |   | n/a |   | **1.7** |   |

 

*Profile*

 

At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

 
| ** **                      | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**  | ** ** |
|---------------------------------|------------|----------|------------|----------|------------|-----------|------------|
| ** **                      | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**    | ** ** |
| **Fixed   rate instruments**    |       |     |       |     |       |      |       |
| Financial   liabilities         |       | 647.0    |       | —   |       | **200.9** |       |
|                            |       |     |       |     |       |      |       |
| **Variable   rate instruments** |       |     |       |     |       |      |       |
| Financial   liabilities         |       | 65.8     |       | 612.6    |       | **963.7** |       |

 

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 derivatives immediately in its 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 31 August 2015, all of the Groups borrowings were issued at variable and fixed 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 interest rates on the Group’s variable interest rate debt not covered by the derivative financial instruments would be to increase the Group’s interest charge by approximately $9.6 million (2014: $6.1 million, 2013: $5.3 million).

 

F-85

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**2****3**           **Financial instruments***(continued)*

 

***23******(e) 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 31 March 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 2 March 2015 and further increased by $240.0 million on 25 June 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 14 April 2014.  Prior to entry into the senior secured term loan facility in March 2014, the Group monitored the Fixed Charge Cover Ratio (“FCCR” — Consolidated EBITDA divided by Consolidated Interest Expense as defined in the indenture governing the $490m senior secured notes). 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 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 31 August 2015 were as follows:

 
| ** **                            | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**    | ** ** |
|---------------------------------------|------------|----------|------------|----------|------------|-------------|------------|
| ** **                            | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**      | ** ** |
|                                  |       |     |       |     |       |        |       |
| Total borrowings                      |       | 712.8    |       | 612.6    |       | **1,164.6** |       |
| Less cash and   cash equivalents      |       | (222.9   | )          | (256.4   | )          | **(317.0**  | **)**      |
|                                  |       |     |       |     |       |        |       |
| Net debt                              |       | 489.9    |       | 356.2    |       | **847.6**   |       |
| Total equity                          |       | 20.0     |       | 190.7    |       | **279.3**   |       |
|                                  |       |     |       |     |       |        |       |
| Total capital                         |       | 509.9    |       | 546.9    |       | **1,126.9** |       |
|                                  |       |     |       |     |       |        |       |
| Net debt to   total equity ratio      |       | 24.5:1   |       | 1.9:1    |       | **3.0:1**   |       |
|                                  |       |     |       |     |       |        |       |
| Fixed charge   coverage ratio (FCCR)* |       | 2.25     |       | n/a      |       | **n/a**     |       |
|                                  |       |     |       |     |       | ** **  |       |
| Net leverage   ratio (NLR)**          |       | 3.14     |       | 2.75     |       | **3.93**    |       |

 

----

* FCCR monitored from 22 March 2012 to 31 March 2014

 

** NLR monitored from 31 March 2014. 2013 figures are unaudited

 

***23******(f) Offsetting Financial Assets and Financial Liabilities***

 

There are no offsetting financial assets and financial liabilities during the year.

 

F-86

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**24**                        **Operating leases**

 

Future aggregate minimum lease payments are as follows:

 
| ** **                   | ** ** | **2013** | ** ** | **2014** | ** ** | **2015**    | ** ** |
|------------------------------|------------|----------|------------|----------|------------|-------------|------------|
| ** **                   | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**      | ** ** |
| *Land   and Buildings*       |       |     |       |     |       |        |       |
| Less than one   year         |       | 47.4     |       | 53.8     |       | **71.1**    |       |
| Between one and   five years |       | 186.7    |       | 204.1    |       | **252.9**   |       |
| More than five   years       |       | 351.5    |       | 454.4    |       | **972.0**   |       |
|                         |       |     |       |     |       |        |       |
|                         |       | 585.6    |       | 712.3    |       | **1,296.0** |       |
| *Other*                      |       |     |       |     |       |        |       |
| Less than one   year         |       | 0.4      |       | 0.4      |       | **0.4**     |       |
| Between one and   five years |       | 0.3      |       | 0.7      |       | **0.5**     |       |
| More than five   years       |       | —   |       | —   |       | **—**  |       |
|                         |       |     |       |     |       |        |       |
|                         |       | 0.7      |       | 1.1      |       | **0.9**     |       |
|                         |       |     |       |     |       |        |       |
|                         |       | 586.3    |       | 713.4    |       | **1,296.9** |       |

 

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.

 

**25**                        **Commitments**

 

*Capital commitments*

 
| ** **                                      | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
|-------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| ** **                                      | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**   | ** ** |
|                                            |       |     |       |     |       |     |       |
| Contracted but   not provided for               |       | 4.3      |       | 3.0      |       | **9.3**  |       |
| Authorized but   not contracted or provided for |       | 27.8     |       | 28.6     |       | **15.0** |       |
|                                            |       |     |       |     |       |     |       |
|                                            |       | 32.1     |       | 31.6     |       | **24.3** |       |

 

All capital commitments relate to tangible assets.

** **

**26**                        **Contingencies**

 

In 2013 to 2015 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 13, Subsidiaries, 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.

 

The Group has provided the following bank guarantees:

 

To SCTAI Anglo Iskola KFT for €0.3 million (2014 - $0.4 million, 2013 - $0.4 million) in respect of a 30 year lease of school premises in Budapest. The annual payments under this lease are €0.4 million (2014 - $0.6 million, 2013 - $0.6 million) and the guarantee expires on 14 September 2016.

 

To Abu Dhabi Education Council for AED1.3 million ($0.4 million, 2014 - $0.4 million, 2013 - $0.3 million) which is open ended.

 

To Dubai Islamic Bank for AED36.0 million ($9.8 million, 2014 - $9.8 million, 2013 - $9.8 million) in respect of a 13 year lease for school premises in Dubai, the guarantee expires on 15 September 2017.

 

F-87

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**27**                        **Related party transactions**

 

*Controlling entities*

 

Premier Education Holdings Limited owns 72.2% 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 other related parties. Transactions entered into, and trading balances outstanding at 31 August with other related parties are as follows:

 
| ** **                                            | ** ** | **Amounts   owed by   related   parties at   2013 ($m)** | ** ** | **Amounts   owed to   related   parties at   2013 ($m)** | ** ** | **Amounts   owed by   related   parties at   2014 ($m)** | ** ** | **Amounts   owed to   related   parties at   2014 ($m)** | ** ** | **Amounts   owed by   related   parties at   2015 ($m)** | ** ** | **Amounts   owed to   related   parties at   2015 ($m)** | ** ** |
|-------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|------------|
| Entities with   significant influence over the Group: |       |                                                                    |       |                                                                    |       |                                                                    |       |                                                                    |       |                                                                    |       |                                                                    |       |
| Premier   Education Holdings Limited                  |       | —                                                                  |       | 30.6                                                                    |       | —                                                                  |       | —                                                                  |       | —                                                                  |       | —                                                                  |       |
|                                                  |       |                                                                    |       |                                                                    |       |                                                                    |       |                                                                    |       |                                                                    |       |                                                                    |       |
| Other related   parties                               |       | —                                                                  |       | 2.3                                                                     |       | —                                                                  |       | 0.8                                                                     |       | —                                                                  |       | **0.8**                                                                 |       |

 
| **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 of the consolidated financial statements.

 

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 $1.1 million (2014 — $1.1 million) by the Group which is included within other creditors due less than one year.

 

During the year ended 31 August 2015, consistent with 31 August 2014 financial statements, the Swiss schools continue to rent premises from companies which are controlled by a key member of management.

 
| ** **                       | ** ** | **Balance at   31 August   2015   ($m)** | ** ** | **Rental   charge for   the period   ($m)** | ** ** | **Balance at   31 August   2014   ($m)** | ** ** | **Rental   charge for   the period   ($m)** | ** ** | **Balance at   31 August   2013   ($m)** | ** ** | **Rental   charge for   the period   ($m)** | ** ** |
|----------------------------------|------------|----------------------------------------------------|------------|-------------------------------------------------------|------------|----------------------------------------------------|------------|-------------------------------------------------------|------------|----------------------------------------------------|------------|-------------------------------------------------------|------------|
|                             |       |                                               |       |                                                  |       |                                               |       |                                                  |       |                                               |       |                                                  |       |
| Leosolis SA                      |       | nil                                                |       | 3.2                                                   |       | 0.2                                                |       | 3.4                                                   |       | nil                                                |       | 3.3                                                   |       |
| Hunters SA                       |       | nil                                                |       | 0.9                                                   |       | nil                                                |       | 1.0                                                   |       | nil                                                |       | 0.9                                                   |       |
| Toumim SA                        |       | nil                                                |       | 0.3                                                   |       | nil                                                |       | 0.5                                                   |       | nil                                                |       | 0.3                                                   |       |
| Delphim SA                       |       | nil                                                |       | 3.2                                                   |       | 0.8                                                |       | 3.5                                                   |       | 2.3                                                |       | 3.3                                                   |       |
| Educim SA                        |       | nil                                                |       | 3.1                                                   |       | nil                                                |       | 0.0                                                   |       | nil                                                |       | —                                                |       |
| La Renardières   Service SA |       | nil                                                |       | 0.7                                                   |       | nil                                                |       | 0.7                                                   |       | nil                                                |       | 0.5                                                   |       |

 

F-88

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**27**                        **Related party transactions *(continued)***

 

Future aggregate minimum lease payments to the key member of management are as follows:

 
| **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                                                       |       |
| Résidence   Panorama SA     |       | 0.3                        |       | 0.1                                      |       | 0.2                                                      |       | —                                                    |       |
| de Meyer Jérôme        |       | 0.0                        |       | 0.0                                      |       | —                                                   |       | —                                                    |       |
|                             |       |                       |       |                                     |       |                                                     |       |                                                      |       |
|                             |       | 181.8                      |       | 10.7                                     |       | 41.3                                                     |       | 129.8                                                     |       |

 
| **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                                                       |       |
| Résidence   Panorama SA     |       | 0.4                        |       | 0.1                                      |       | 0.3                                                      |       | 0.0                                                       |       |
| de Meyer Jérôme        |       | 0.1                        |       | 0.1                                      |       | —                                                   |       | —                                                    |       |
|                             |       |                       |       |                                     |       |                                                     |       |                                                      |       |
|                             |       | 202.0                      |       | 11.3                                     |       | 43.6                                                     |       | 147.1                                                     |       |

 
| **2013**                         | ** ** | **Total   payable   ($m)** | ** ** | **Due within   1 year   ($m)** | ** ** | **Due within   1 to 5 years   ($m)** | ** ** | **Due after   more than 5   years   ($m)** | ** ** |
|----------------------------------|------------|----------------------------|------------|------------------------------------------|------------|----------------------------------------------------------|------------|-----------------------------------------------------------|------------|
|                             |       |                       |       |                                     |       |                                                     |       |                                                      |       |
| Leosolis SA                      |       | 70.8                       |       | 3.2                                      |       | 12.9                                                     |       | 54.7                                                      |       |
| Hunters SA                       |       | 13.5                       |       | 0.9                                      |       | 2.6                                                      |       | 10.0                                                      |       |
| Toumim SA                        |       | 6.9                        |       | 0.3                                      |       | 1.3                                                      |       | 5.3                                                       |       |
| Delphim SA                       |       | 43.1                       |       | 3.3                                      |       | 13.3                                                     |       | 26.5                                                      |       |
| La Renardières Service   SA |       | 8.0                        |       | 0.6                                      |       | 2.3                                                      |       | 5.1                                                       |       |
|                             |       |                       |       |                                     |       |                                                     |       |                                                      |       |
|                             |       | 142.3                      |       | 8.3                                      |       | 32.4                                                     |       | 101.6                                                     |       |

 

There is a rental guarantee made to Delphim SA for CHF1.2 million in respect of a 14 year lease of school premises in Switzerland. The annual payment under this lease are CHF3.1 million ($3.2 million) and the guarantee expires on 31 August 2026.

 

In addition to the above, the vendor was also paid a consultancy fee of $0.2 million (2014 - $1.2 million, 2013 - $0.3 million) and reimbursement of costs $2.5 million (2014 - $1.2 million, 2013 - $1.8 million).

 

F-89

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015 *(continued)***

 

**27**                        **Related party transactions *(continued)***

 

Included within other creditors is an amount of $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) 2013 - $2.3 million (current: $1.5 million, non-current: $0.8 million). The $0.8 million is due to the vendor of College Champittet for the earn-out agreement and is to be settled over the next 4 years (2014 - $0.8 million to be settled over 4 years, 2013 - $1.0 million to be settled over 5 years). The remaining $1.3 million in 2013 relates to the deferred consideration which is due to the vendor for the initial purchase of College Champittet by Premier Education Holdings Limited (formerly known as Premier Education Holdings s.a.r.l.). The repayment date for this deferred consideration is 1 September 2013. These amounts relate to the original purchase of the trade and assets of College Champittet by the corporate vehicle (Cime Services SA) used to purchase College Champittet.

 

During the year ended 31 August 2014, $15.0 million (2013 - $3.3 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, $0.2 million (2013 - $0.4 million) was paid to Barings Private Equity Asia for the reimbursement of travelling expenses. In the year ended 31 August 2013, $6.5 million was paid to Barings Private Equity Asia for the transaction fee in relation to the issuance of the $325 million of 10.25% Senior secured notes due 2017 by Nord Anglia Education (UK) Holdings PLC.

 

During the year ended 31 August 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 (2013 - $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 recapitalisation (see note 22).

 

During the year ended 31 August 2014, a consultancy fee of $nil million (2013: $0.1 million) was paid to a close family member of senior management for consultancy purposes.

 

F-90

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**28**                        **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 retroactively reflect as outstanding in all periods the shares held by PEH, the parent, immediately prior to the initial public offering. During the year $nil (2014 – $32.1 million; 2013 – $14.9 million) New preference shares were redeemed at the option of the Company. The amount paid on redemption was $nil (2014 - $61.6 million; 2013 - $138.7 million) and the carrying value of the shares redeemed comprised $nil (2014 – $0.0 million; 2013 – $0.0 million) of share capital and $nil (2014 - $61.6 million; 2013 - $138.7 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.

 
| ** **                                             | ** ** | **2013**  | ** ** | **2014**                                        | ** ** | **2015**    | ** ** |
|--------------------------------------------------------|------------|-----------|------------|-------------------------------------------------|------------|-------------|------------|
| ** **                                             | ** ** | **Basic** | ** ** | **Potentially   dilutive share   options** | ** ** | **Diluted** | ** ** | **Basic** | ** ** | **Potentially   dilutive share   options** | ** ** | **Diluted** | ** ** | **Basic** | ** ** | **Potentially   dilutive   share   options** | ** ** | **Diluted** | ** ** |
| **Loss   ($m)**                                        |       |      |       |                                            |       |        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing   operations                                |       | (23.3     | )          |                                            |       | (23.3       | )          | (90.4 | ) |   |   | (90.4 | ) | **7.4** |   |   |   | **7.4** |   |
| Preference share   redemption premium                  |       | (1.6      | )          |                                            |       | (1.6        | )          | (0.4 | ) |   |   | (0.4 | ) | **—** |   |   |   | **—** |   |
|                                                   |       |      |       |                                            |       |        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Total   losses attributable to equity shareholders** |       | (24.9     | )          |                                            |       | (24.9       | )          | (90.8 | ) |   |   | (90.8 | ) | **7.4** |   |   |   | **7.4** |   |
|                                                   |       |      |       |                                            |       |        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Weighted   average number of shares (millions)**     |       | 74.0      |       | —                                          |       | 74.0        |       | 85.1 |   | — |   | 85.1 |   | **99.4** |   | **0.1** |   | **99.5** |   |
|                                                   |       |      |       |                                            |       |        |       |   |   |   |   |   |   |   |   |   |   |   |   |
| **Loss   per share ($ per share)**                |       | (0.34     | )          |                                            |       | (0.34       | )          | (1.07 | ) |   |   | (1.07 | ) | **0.07** |   |   |   | **0.07** |   |

 

F-91

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**29**                        **Subsequent events**

 

There were no material subsequent events.

 

F-92

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**30**                        **Parent company financial information**

 

**Income Statements**

 
| ** **                                    | ** ** | ** ** | ** ** | **Year ended 31   August   2013** | ** ** | **Year ended 31   August   2014** | ** ** | **Year ended 31   August   2015** | ** ** |
|-----------------------------------------------|------------|------------|------------|---------------------------------------------|------------|---------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                    | ** ** | **Note**   | ** ** | **$m**                                      | ** ** | **$m**                                      | ** ** | **$m**                                      | ** ** |
|                                          |       |       |       |                                        |       |                                        |       |                                        |       |
| Revenue                                       |       |       |       | —                                      |       | **—**                                  |       | **—**                                  |       |
| Cost of sales                                 |       |       |       | —                                      |       | **—**                                  |       | **—**                                  |       |
|                                          |       |       |       |                                        |       |                                        |       |                                        |       |
| **Gross   profit**                            |       |       |       | —                                      |       | **—**                                  |       | **—**                                  |       |
|                                          |       |       |       |                                        |       |                                        |       |                                        |       |
| Selling, general   and administrative expense |       |       |       | (0.1                                        | )          | (3.0                                        | )          | **(1.0**                                    | **)**      |
| Depreciation                                  |       |       |       | —                                      |       | —                                      |       | **—**                                  |       |
| Amortization                                  |       |       |       | —                                      |       | —                                      |       | **—**                                  |       |
| Exceptional   items                           |       | *30c*      |       | (1.1                                        | )          | (35.0                                       | )          | **(16.1**                                   | **)**      |
|                                          |       |       |       |                                        |       |                                        |       |                                        |       |
| Total expenses                                |       |       |       | (1.2                                        | )          | (38.0                                       | )          | **(17.1**                                   | **)**      |
|                                          |       |       |       |                                        |       |                                        |       |                                        |       |
| **Operating   loss**                          |       |       |       | (1.2                                        | )          | (38.0                                       | )          | **(17.1**                                   | **)**      |
|                                          |       |       |       |                                        |       |                                        |       |                                        |       |
| Finance income                                |       |       |       | —                                      |       | —                                      |       | **1.5**                                     |       |
| Finance expense                               |       |       |       | (8.5                                        | )          | (10.4                                       | )          | **(5.0**                                    | **)**      |
|                                          |       |       |       |                                        |       |                                        |       |                                        |       |
| **Net   financing expense**                   |       |       |       | (8.5                                        | )          | (10.4                                       | )          | **(3.5**                                    | **)**      |
|                                          |       |       |       |                                        |       |                                        |       |                                        |       |
| **Loss before   tax**                         |       |       |       | (9.7                                        | )          | (48.4                                       | )          | **(20.6**                                   | **)**      |
| Income tax                                    |       |       |       | —                                      |       | —                                      |       | **—**                                  |       |
|                                          |       |       |       |                                        |       |                                        |       |                                        |       |
| **Loss   for the period**                     |       |       |       | (9.7                                        | )          | (48.4                                       | )          | **(20.6**                                   | **)**      |

 

F-93

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**30**                        **Parent company financial information***(continued)*

 

**Statement****s****of Comprehensive Loss**

 
| ** **                                                                | ** ** | ** ** | ** ** | **Year ended 31   August   2013** | ** ** | **Year ended 31   August   2014** | ** ** | **Year ended 31   August** | ** ** |
|---------------------------------------------------------------------------|------------|------------|------------|---------------------------------------------|------------|---------------------------------------------|------------|--------------------------------------|------------|
| ** **                                                                | ** ** | **Note**   | ** ** | **$m**                                      | ** ** | **$m**                                      | ** ** | **2015**                             | ** ** |
|                                                                      |       |       |       |                                        |       |                                        |       |                                 |       |
| **Loss   for the period**                                                 |       |       |       | (9.7                                        | )          | (48.4                                       | )          | **(20.6**                            | **)**      |
|                                                                      |       |       |       |                                        |       |                                        |       |                                 |       |
| **Other   comprehensive income**                                          |       |       |       |                                        |       |                                        |       |                                 |       |
| *Items   that may be subsequently reclassified to profit or loss:*        |       |       |       |                                        |       |                                        |       |                                 |       |
| Foreign exchange   translation differences                                |       |       |       | —                                      |       | —                                      |       | **—**                           |       |
|                                                                      |       |       |       |                                        |       |                                        |       |                                 |       |
| **Other   comprehensive income/(loss) for the period, net of income tax** |       |       |       | —                                      |       | —                                      |       | **—**                           |       |
|                                                                      |       |       |       |                                        |       |                                        |       |                                 |       |
| **Total   comprehensive loss for the year**                               |       |       |       | (9.7                                        | )          | (48.4                                       | )          | **(20.6**                            | **)**      |
|                                                                      |       |       |       |                                        |       |                                        |       |                                 |       |
| **Attributable   to:**                                                    |       |       |       |                                        |       |                                        |       |                                 |       |
| Equity holders   of the company                                           |       |       |       | (9.7                                        | )          | (48.4                                       | )          | **(20.6**                            | **)**      |

 

F-94

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**30**                        **Parent company financial information (continued)**

 

**Balance Sheet**

***as at 31 August***

 
| ** **                                                | ** ** | ** ** | ** ** | **2013** | ** ** | **2014** | ** ** | **2015** | ** ** |
|-----------------------------------------------------------|------------|------------|------------|----------|------------|----------|------------|----------|------------|
| ** **                                                | ** ** | **Note**   | ** ** | **$m**   | ** ** | **$m**   | ** ** | **$m**   | ** ** |
| **Non-current   assets**                                  |       |       |       |     |       |     |       |     |       |
| Investments                                               |       | *30b*      |       | 332.1    |       | 538.3    |       | 538.3    |       |
| Advances to   subsidiaries                                |       |       |       | —   |       | —   |       | 119.7    |       |
|                                                      |       |       |       |     |       |     |       |     |       |
|                                                      |       |       |       | 332.1    |       | 538.3    |       | 658.0    |       |
|                                                      |       |       |       |     |       |     |       |     |       |
| **Current   assets**                                      |       |       |       |     |       |     |       |     |       |
| Advances to   subsidiaries                                |       |       |       | 1.3      |       | 14.6     |       | —   |       |
| Cash and cash   equivalents                               |       |       |       | 0.0      |       | 0.0      |       | 0.0      |       |
|                                                      |       |       |       |     |       |     |       |     |       |
|                                                      |       |       |       | 1.3      |       | 14.6     |       | 0.0      |       |
|                                                      |       |       |       |     |       |     |       |     |       |
| **Total   assets**                                        |       |       |       | 333.4    |       | 552.9    |       | 658.0    |       |
| ** **                                                |       |       |       |     |       |     |       |     |       |
| **Current   liabilities**                                 |       |       |       |     |       |     |       |     |       |
| Other   interest-bearing loans and borrowings             |       |       |       | (1.1     | )          | 0.0      |       | —   |       |
| Advances from   subsidiaries                              |       |       |       | (1.5     | )          | (25.2    | )          | (7.5     | )          |
|                                                      |       |       |       |     |       |     |       |     |       |
|                                                      |       |       |       | (2.6     | )          | (25.2    | )          | (7.5     | )          |
| **Non-current   liabilities**                             |       |       |       |     |       |     |       |     |       |
| Other   interest-bearing loans and borrowings             |       |       |       | (140.5   | )          | 0.0      |       | —   |       |
| Advances from   subsidiaries                              |       |       |       | —   |       | (109.1   | )          | (114.4   | )          |
|                                                      |       |       |       |     |       |     |       |     |       |
|                                                      |       |       |       | (140.5   | )          | (109.1   | )          | (114.4   | )          |
|                                                      |       |       |       |     |       |     |       |     |       |
| **Total   liabilities**                                   |       |       |       | (143.1   | )          | (134.3   | )          | (121.9   | )          |
|                                                      |       |       |       |     |       |     |       |     |       |
| **Net   assets**                                          |       |       |       | 190.3    |       | 418.6    |       | 536.1    |       |
| ** **                                                |       |       |       |     |       |     |       |     |       |
| **Equity   attributable to equity holders of the parent** |       |       |       |     |       |     |       |     |       |
| Share capital                                             |       | *22*       | ***        | 67.5     |       | 1.0      |       | 1.0      |       |
| Share premium                                             |       | *22*       | ***        | 256.5    |       | 597.1    |       | 735.2    |       |
| Shareholder   deficit                                     |       |       |       | (133.7   | )          | (179.5   | )          | (200.1   | )          |
|                                                      |       |       |       |     |       |     |       |     |       |
| **Shareholders’   funds**                            |       |       |       | 190.3    |       | 418.6    |       | 536.1    |       |

 

These financial statements set out on pages 102 to 111 were approved the board of directors on 31 December 2015 and were signed on its behalf by:

 
| **A Fitzmaurice**     | **G Halder**            |
|-----------------------|-------------------------|
| *Director*            | *Director*              |
| 31 December 2015 | 31   December 2015 |

 

Company number: MC-264950

 

----

* Note reference refers to consolidated financial statement note.

 

F-95

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**30**                        **Parent company financial information***(continued)*

 

**Statement****s****of Changes in Equity**

** **

***for the******year ended 31 August 2013, 31 August 2014 and 31 August 2015***

 
| ** **                                                       | ** ** | **Share   capital** | ** ** | **Share   premium** | ** ** | **Other   reserves** | ** ** | **Shareholders’   deficit** | ** ** | **Total   shareholder   equity** | ** ** |
|------------------------------------------------------------------|------------|---------------------|------------|---------------------|------------|----------------------|------------|----------------------------------|------------|----------------------------------|------------|
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| Balance at 31   August 2012 and 1 September 2012       |       | 67.5                |       | 255.2               |       | —               |       | (124.1                           | )          | 198.6                            |       |
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| **Total   comprehensive loss for the year**                      |       |                |       |                |       |                 |       |                             |       |                             |       |
| Loss for the   year                                              |       | —              |       | —              |       | —               |       | (9.7                             | )          | (9.7                             | )          |
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| **Transactions   with owners, recorded directly in equity**      |       |                |       |                |       |                 |       |                             |       |                             |       |
| Issue of   preference shares (see note 22*)                      |       | —              |       | 140.0               |       | —               |       | —                           |       | 140.0                            |       |
| Preference   shares redemption (see note 22*)                    |       | —              |       | (138.7              | )          | —               |       | —                           |       | (138.7                           | )          |
| Equity-settled   share based payment transactions (see note 20*) |       | —              |       | —              |       | —               |       | 0.1                              |       | 0.1                              |       |
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| Total   contributions by and distributions to owners             |       | —              |       | 1.3                 |       | —               |       | 0.1                              |       | 1.4                              |       |
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| Balance at 31   August 2013                                 |       | 67.5                |       | 256.5               |       | —               |       | (133.7                           | )          | 190.3                            |       |

 

----

* Note reference refers to consolidated financial statement note.

 

F-96

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**30**                        **Parent company financial information***(continued)*

 

**Statement****s****of Changes in Equity***(continued)*

 
| ** **                                                       | ** ** | **Share   capital** | ** ** | **Share   premium** | ** ** | **Other   reserves** | ** ** | **Shareholders’   deficit** | ** ** | **Total   shareholder   equity** | ** ** |
|------------------------------------------------------------------|------------|---------------------|------------|---------------------|------------|----------------------|------------|----------------------------------|------------|----------------------------------|------------|
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| Balance at 1   September 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 22*)                     |       | 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 20*) |       | —              |       | —              |       | —               |       | 2.6                              |       | 2.6                              |       |
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| Total   contributions by and distributions to owners             |       | (66.5               | )          | 340.6               |       | —               |       | 2.6                              |       | 276.7                            |       |
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| Balance at 31   August 2014 and 1 September 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 22*)                     |       | 0.0                 |       | 148.6               |       | —               |       | —                           |       | 148.6                            |       |
| Transaction   costs recognized directly in equity                |       | —              |       | (10.8               | )          | —               |       | —                           |       | (10.8                            | )          |
| Exercise share   options                                         |       | —              |       | 0.3                 |       | —               |       | 0.0                              |       | 0.3                              |       |
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| Total   contributions by and distributions to owners             |       | 0.0                 |       | 138.1               |       | —               |       | 0.0                              |       | 138.1                            |       |
|                                                             |       |                |       |                |       |                 |       |                             |       |                             |       |
| **Balance   at 31 August 2015**                             |       | **1.0**             |       | **735.2**           |       | **—**           |       | **(200.1**                       | **)**      | **536.1**                        |       |

 

----

* Note reference refers to consolidated financial statement note.

 

F-97

----

Table of Contents

 

**Notes to the financial statements for the year ended 31 August 2015*(continued)***

 

**30**                        **Parent company financial information***(continued)*

 

**Cash Flow Statement****s**

***for the******year ended 31 August 2013, 31 August 2014 and 31 August 2015***

 
| ** **                                             | ** ** | ** ** | ** ** | **Year ended 31   August 2013** | ** ** | **Year ended 31   August   2014** | ** ** | **Year ended   31 August   2015** | ** ** |
|--------------------------------------------------------|------------|------------|------------|------------------------------------------------|------------|---------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                             | ** ** | **Note**   | ** ** | **$m**                                         | ** ** | **$m**                                      | ** ** | **$m**                                      | ** ** |
| **Cash   flows from operating activities**             |       |       |       |                                           |       |                                        |       |                                        |       |
| Loss for the   period before taxation                  |       |       |       | (9.7                                           | )          | (48.4                                       | )          | **(20.6**                                   | **)**      |
| *Adjustments   for:*                                   |       |       |       |                                           |       |                                        |       |                                        |       |
| Bond redemption   expense                              |       |       |       | —                                         |       | 13.8                                        |       | **—**                                  |       |
| Loan to   subsidiary forgone                           |       |       |       | —                                         |       | —                                      |       | **14.5**                                    |       |
| Net financial   expense                                |       |       |       | 8.5                                            |       | 10.4                                        |       | **3.5**                                     |       |
| Equity settled   share-based payment expenses          |       |       |       | 0.1                                            |       | 2.6                                         |       | **0.3**                                     |       |
|                                                   |       |       |       |                                           |       |                                        |       |                                        |       |
| Cash used in   operations                              |       |       |       | (1.1                                           | )          | (21.6                                       | )          | **(2.3**                                    | **)**      |
|                                                   |       |       |       |                                           |       |                                        |       |                                        |       |
| Payment of bond   redemption expense                   |       |       |       | —                                         |       | (13.8                                       | )          | **—**                                  |       |
| Interest paid                                          |       |       |       | (6.6                                           | )          | (9.4                                        | )          | **—**                                  |       |
|                                                   |       |       |       |                                           |       |                                        |       |                                        |       |
| **Net   cash used in operating activities**            |       |       |       | (7.7                                           | )          | (44.8                                       | )          | **(2.3**                                    | **)**      |
|                                                   |       |       |       |                                           |       |                                        |       |                                        |       |
| **Cash   flows from investing activities**             |       |       |       |                                           |       |                                        |       |                                        |       |
| Investment in   subsidiary                             |       |       |       | (133.4                                         | )          | (206.2                                      | )          | **—**                                  |       |
| Advances to   subsidiaries                             |       |       |       | (0.4                                           | )          | (5.3                                        | )          | **(119.7**                                  | **)**      |
|                                                   |       |       |       |                                           |       |                                        |       |                                        |       |
| **Net   cash used in investing activities**            |       |       |       | (133.8                                         | )          | (211.5                                      | )          | **(119.7**                                  | **)**      |
|                                                   |       |       |       |                                           |       |                                        |       |                                        |       |
| **Cash   flows from financing activities**             |       |       |       |                                           |       |                                        |       |                                        |       |
| Proceeds from   the issue of share capital, net        |       |       |       | 140.0                                          |       | 323.8                                       |       | **118.9**                                   |       |
| Proceeds from   issue of 8.50% Senior PIK toggle notes |       |       |       | 150.0                                          |       | —                                      |       | **—**                                  |       |
| Advances from   subsidiaries                           |       |       |       | —                                         |       | 161.0                                       |       | **3.1**                                     |       |
| Repayment of   borrowings                              |       |       |       | —                                         |       | (150.0                                      | )          | **—**                                  |       |
| Payment of   borrowing expenses                        |       |       |       | (9.8                                           | )          | —                                      |       | **—**                                  |       |
| Distribution to   parent                               |       |       |       | —                                         |       | (15.0                                       | )          | **—**                                  |       |
| Share redemption                                       |       |       |       | (138.7                                         | )          | (63.5                                       | )          | **—**                                  |       |
|                                                   |       |       |       |                                           |       |                                        |       |                                        |       |
| **Net   cash generated from financing activities**     |       |       |       | 141.5                                          |       | 256.3                                       |       | **122.0**                                   |       |
|                                                   |       |       |       |                                           |       |                                        |       |                                        |       |
| 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 31 August**           |       |       |       | 0.0                                            |       | 0.0                                         |       | **0.0**                                     |       |

 

F-98

----

Table of Contents

 

**Notes to the****parent company****financial statements**

 

**30**                        **Parent company financial information***(continued)*

 

Nord Anglia Education, Inc. was incorporated in the Cayman Islands on 14 December 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.

 

**30a**         **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 shareholders’ funds on as at 31 August 2015 shows net assets by $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 31 August 2016 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 31 August 2016 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.

 

**Prior year correction**

 

In preparing the financial statements for the current period, the Company revised the prior year balance sheet and cash flow statement for the Company. Previously advances to and from subsidiaries were treated as working capital. Currently these fund inflows and outflows from subsidiaries are classified following the nature of these transactions. When the nature is a lending and borrowing, such cash flows are included in investing and financing respectively. This change does not affect revenue, operating profit, profit for the period, earnings per share.

 

The reconciliation table for the changes in the classification to correct an error is as follows:

 
| ** **                                     | ** ** | **As at 31 August 2013** | ** ** | **As at 31 August 2014** | ** ** |
|------------------------------------------------|------------|----------------------------------------------|------------|----------------------------------------------|------------|
| ** **                                     | ** ** | **As   previously   reported   $m**          | ** ** | **As corrected   for error   $m**  | ** ** | **As   previously   reported   $m** | ** ** | **As corrected   for error   $m** | ** ** |
| **Balance   Sheet**                            |       |                                         |       |                                         |       |   |   |   |   |
| Advances from   subsidiaries (current)         |       | 1.3                                          |       | 1.3                                          |       | (134.3 | ) | (25.2 | ) |
| Advances from   subsidiaries (non-current)     |       | **—**                                   |       | **—**                                   |       | — |   | (109.1 | ) |
|                                           |       |                                         |       |                                         |       |   |   |   |   |
| **Cash   Flow Statement**                      |       |                                         |       |                                         |       |   |   |   |   |
| Cash used in   operations                      |       | (1.5                                         | )          | (1.1                                         | )          | 134.1 |   | (21.6 | ) |
| Net cash used in   operating activities        |       | (8.1                                         | )          | (7.7                                         | )          | 110.9 |   | (44.8 | ) |
| Net cash used in   investing activities        |       | (133.4                                       | )          | (133.8                                       | )          | (206.2 | ) | (211.5 | ) |
| Net cash   generated from financing activities |       | 141.5                                        |       | 141.5                                        |       | 95.3 |   | 256.3 |   |

 

**Investments**

 

In accordance with IAS 27R, the Company accounts for its investments in subsidiaries and associates at cost.

 

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 initially recognized at the fair value of the consideration received net of issue costs associated with the borrowing. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the 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.

 

F-99

----

Table of Contents

 

**Notes to the parent company financial statements *(continued)***

 

**30**                        **Parent company financial information***(continued)*

 

**30b**         **Investments**

 
| ** **                   | ** ** | **$m** | ** ** |
|------------------------------|------------|--------|------------|
| At 31   August 2012     |       | 198.6  |       |
| Additions during   the year  |       | 133.5  |       |
|                         |       |   |       |
| At 31   August 2013     |       | 332.1  |       |
| Additions during   the year  |       | 206.2  |       |
|                         |       |   |       |
| At 31   August 2014     |       | 538.3  |       |
| Additions during   the year  |       | — |       |
|                         |       |   |       |
| **At 31   August 2015** |       | 538.3  |       |

 

On 20 May 2013, the Company subscribed to 1 preference share with an aggregate nominal value of $1 was issued at par of Nord Anglia Education (UK) Holdings PLC with a share premium of $133.4 million per share, for the financing of the acquisition and related fees and expenses of WCL Group Limited (see note 2 in the Group financial statements).

 

On 6 December 2013, the Company subscribed to 2 ordinary shares with an aggregate nominal value of $2 was issued at par of Nord Anglia Education (UK) Holdings PLC with a share premium of $4.5 million, for the funding of the Company’s operating activities.

 

On 31 March 2014, the Company subscribed to 1 ordinary share with an aggregate nominal value of $1 was issued at par of Nord Anglia Education (UK) Holdings PLC with a share premium of $201.7 million per share, for the part settlement of the $325.0 million 10.25% senior secured notes issued on 28 March 2012 and the $165.0 million 10.25% senior secured notes issued on 26 June 2013.

 

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 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 13 of the consolidated financial statements.

 

**30c**                            **Exceptional item**

 

Included within the current year 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 derecognition 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.

 

During 2013, the exceptional charges of $1.1 million relates to the non-incremental costs associated with the raising of 8.5% Senior PIK toggle notes due 2018.

 

**30d**                           **Contingent liabilities**

 

The Company had no contingent liabilities at 31 August 2015 (2013 and 2014 - $nil).

 

**30e**                            **Operating leases**

 

The Company had no operating leases at 31 August 2015 (2013 and 2014 - $nil).

 

F-100

----

Table of Contents

 

**Notes to the****parent company****financial statements *(continued)***

 

**30**        **Parent company financial information***(continued)*

 

**30f**                             **Capital commitments**

 

The Company had no capital commitments at 31 August 2015 (2013 and 2014 - $nil).

 

**30g**                           **Related party transactions**

 

There are no other related party transactions other than those disclosed in the Group accounts. Under IAS 24 the Company is exempt from disclosing transactions within wholly owned subsidiaries.

 

**30h**                           **Supplemental information**

 

The following reconciliations are provided as additional information to satisfy the schedule 1 SEC requirements for parent-only financial information:

 
| ** **                                                                                                             | ** ** | ** ** | ** ** | **Year ended 31   August   2013** | ** ** | **Year ended 31   August   2014** | ** ** | **Year ended 31   August   2015** | ** ** |
|------------------------------------------------------------------------------------------------------------------------|------------|------------|------------|---------------------------------------------|------------|---------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                                                                                             | ** ** | **Note**   | ** ** | **$m**                                      | ** ** | **$m**                                      | ** ** | **$m**                                      | ** ** |
| **IFRS   loss reconciliation**                                                                                         |       |       |       |                                        |       |                                        |       |                                        |       |
| Parent only —   IFRS loss for the period                                                                          |       |       |       | (9.7                                        | )          | (48.4                                       | )          | **(20.6**                                   | **)**      |
| Additional   (loss)/profit if subsidiaries had been accounted for on the equity method of   accounting as opposed cost |       |       |       | (13.6                                       | )          | (42.0                                       | )          | **29.2**                                    |       |
|                                                                                                                   |       |       |       |                                        |       |                                        |       |                                        |       |
| Consolidated   IFRS loss for the period                                                                                |       |       |       | (23.3                                       | )          | (90.4                                       | )          | **8.6**                                     |       |
|                                                                                                                   |       |       |       |                                        |       |                                        |       |                                        |       |
| **IFRS   equity reconciliation**                                                                                       |       |       |       |                                        |       |                                        |       |                                        |       |
| Parent only —   IFRS equity                                                                                       |       |       |       | 190.3                                       |       | 418.6                                       |       | **536.1**                                   |       |
| Additional loss   if subsidiaries had been accounted for on the equity method of accounting as   opposed cost          |       |       |       | (170.3                                      | )          | (227.9                                      | )          | **(256.8**                                  | **)**      |
|                                                                                                                   |       |       |       |                                        |       |                                        |       |                                        |       |
|                                                                                                                   |       |       |       | 20.0                                        |       | 190.7                                       |       | **279.3**                                   |       |

 

F-101

----