TOP EDUCATION GROUP LTD (Registered in New South Wales, Australia with limited liability) (Stock Code: 1752)
Contents
Page
1 Corporate Information 2
2. Management Discussion and Analysis 4
3. Other Information 13
4. Financial Statements 24
5. Notes to the Condensed Consolidated Financial Statements 30
6. Glossary 51
BOARD OF DIRECTORS
REMUNERATION COMMITTEE
Executive Directors:
Dr. Minshen Zhu (Chairman and Chief Executive Officer)
(Ms. Rongning Xu as his alternate)
Ms. Sumeng Cao
Professor Steven Schwartz (Chairman) Mr. Tianye Wang
Mr. Amen Kwai Ping Lee
NOMINATION COMMITTEE
Non-executive Directors:
Mr. Thomas Richard Seymour
(Mr. Kai Zhang as his alternate) Mr. Amen Kwai Ping Lee
Mr. Yi Dai
Mr. Edward Chiang
Independent Non-executive Directors:
Professor Brian James Stoddart (Chairman) Dr. Minshen Zhu
Professor Weiping Wang
JOINT COMPANY SECRETARIES
Ms. Min Ying
Ms. Ivy Yuk Yin ChowProfessor Brian James Stoddart Professor Steven Schwartz
Mr. Tianye Wang Professor Weiping Wang
AUTHORISED REPRESENTATIVES
Dr. Minshen Zhu
Ms. Ivy Yuk Yin Chow
AUDIT COMMITTEE
AUDITOR
Mr. Tianye Wang (Chairman) Professor Brian James Stoddart Professor Steven Schwartz Professor Weiping Wang
Ernst & Young 200 George Street Sydney, NSW 2000 Australia
REGISTERED OFFICE, PRINCIPAL PLACE OF BUSINESS AND HEAD OFFICE IN AUSTRALIA
Suite 1, Biomedical Building 1 Central Avenue
Australian Technology Park Eveleigh, New South Wales 2015 Sydney
Australia
PLACE OF BUSINESS IN HONG KONG REGISTERED UNDER PART 16 OF THE COMPANIES ORDINANCE
HONG KONG SHARE REGISTRAR
Computershare Hong Kong Investor Services Limited Shops 1712-1716, 17th Floor,
Hopewell Centre
183 Queen's Road East Wanchai
Hong Kong
COMPANY WEBSITE
www.top.edu.auLevel 54, Hopewell Centre 183 Queen's Road East Hong Kong
AUSTRALIA PRINCIPAL SHARE REGISTRAR
Top Education Group Ltd Suite 1, Biomedical Building 1 Central Avenue
Australian Technology Park Eveleigh, New South Wales 2015 Sydney
Australia
STOCK CODE
1752
BUSINESS REVIEW
Top Education Group Ltd ("TOP") trading as Australian National Institute of Management and Commerce ("IMC") as well as Top Education Institute is one of Australia's primary, best-in-class private tertiary education providers. TOP has been nationally registered with Tertiary Education Quality and Standards Agency and also approved by TEQSA in May 2018 for Self-Accrediting Authority in the Broad Field of Education in Business and Commerce from AQF levels 5 to 9 including bachelor and master degree courses. In this Broad Field, TOP's Business School provides quality programs at both undergraduate and postgraduate levels including a Master by research. The relevant courses are also accredited by major professional bodies, such as ACCA, CPA Australia and CAANZ. TOP also founded the very first Law School within a private higher education institute when both TEQSA and NSW LPAB officially accredited its degree program in Law.
PwC Nominees, as a nominee for PwC Australia, invested in TOP as a Shareholder in May 2016.
PwC Australia and TOP entered into an Alliance Agreement in 2016 ceasing on 31 March 2023. Under the Alliance Agreement, PwC Australia provides services to TOP, which have assisted TOP to deliver initiatives including tertiary student career development and executive education programs including academic and non-academic courses in Australia, as well as designing 'smart campus' and digital education solutions. Prior to the end of the initial term of the Alliance Agreement, the parties may agree to extend the term of the Alliance Agreement for a further period and may agree to vary its terms for the extension period.
Operational Updates
Operations under COVID-19
During the Reporting Period, TOP had followed the updated strategies to develop and launch new courses to adapt to evolving market and capitalise on emerging revenue growth opportunities. The development of innovative short courses provides an avenue for working professionals to upskill in particular areas of interest in their own time. Learners of these courses can stand out from the crowd and be able to meet the emerging market and professional skill demands in particular areas. TOP has been improving the course delivery model to be more suitable for remote students under current environment.
Effective management of the Group delivered outperformance in cash inflows with approximately AUD$30 million cash on hand at 31 December 2020. The balance sheet and cash position has remained strong with zero bank debt providing a high level of resiliency in the business during the COVID-19 pandemic, with positive momentum in revenue from regional campus to some extent offsetting the short-term challenges in the international student market. Such position gives us the ability to weather an extended period of uncertainty.
The Group has also initiated ongoing cost management measures including rationalising of campus and office property portfolio, for example Scots English College Pty Ltd ("SCOTS") exited from the previous premise lease and relocated to TOP's existing premises in October 2020. All executives of the Group reached a consensus to have their salary package frozen until the international students return. In addition, the CEO has voluntarily reduced his salary package.
During this period with tremendous changes, the Group has been putting the safety protection of students and staff members as the highest priority, and comprehensively enhancing public health protection on campus.
Course Innovation
• TOP had been developing innovative and cutting-edge courses during the Reporting Period along with its strategic plan. On 13 November 2020, the following extended streams under Master of Business Administration were approved by the Commonwealth Register of Institutions and Courses for Overseas Students ("CRICOS"):
− Master of Business Administration (Digital Business Applications)
− Master of Business Administration (Data Analytics)
− Master of Business Administration (FinTech Management)
− Master of Business Administration (Professional Accounting)
• The staff development and training programs in digitalised knowledge had been continuously conducted during the Reporting Period for our staff with academic background in Management and Commerce.
Interstate campus
During the Reporting Period, the revenue from TOP's regional campus in Hobart, Tasmania had grown faster than expected, which helps deliver revenue in near AUD$2 million. This is an increase of approximately 1622% as compared with the corresponding period in 2019.
Smart-Campus and Intelligent-Digitalised Educational
The classrooms and offices at Bay 16, Locomotive Workshop were relocated to new premises at Bay 3, Locomotive Workshop in July 2020. The infrastructure of new premises is equipped with upgraded facilities and most cutting-edge digital technologies to lead an innovative pattern of education delivery method in Australia along with our innovative and intelligent education strategy.
In line with the Group's strategy TOP 3.0, the Group has been building up its infrastructures and has proven its online learning delivery capabilities through the COVID-19 pandemic. We have changed our delivery mode to online promptly without sacrificing students experience, but rather enhancing student support services and learning experiences through intensive student support system. Meanwhile, the Group is exploring and expanding other possible new addressable markets through domestic and international network for our degree programs with online delivery model in the future.
New Course Accreditation
During the Reporting Period, ACCA provided its accreditation of the following programs:
• Master of Professional Accounting
• Master of Professional Accounting Services
• Master of Business Administration (Professional Accounting)
• Master of Big Data Auditing
• Master of Accounting Intelligence programs
• Master of Taxation (with data analytics and artificial intelligence)
In addition, the Group signed memorandum of understanding ("MoU") with the ACCA to include an ACCA stream alongside the CPA Australia stream in the Master of Accounting Practice. This allows students to complete the ACCA strategic professional syllabus within their postgraduate program in preparation for ACCA examinations.
Student Enrolments
For the six months ended 31 December 2020, the total EFTSL of Top Education Institute decreased slightly by 1.4% comparing with the corresponding period in the last financial year.
Six months ended 31 December 2020 2019
Bachelor of International Business(1) | 116.8 | 177.3 |
Bachelor of Applied Finance and Accounting(2) | 75.0 | 76.1 |
Bachelor of Laws | 16.4 | 25.1 |
Master of Professional Accounting and Business(3) | 185.1 | 181.1 |
Master of International Business(4) | 41 | 43.9 |
Master of Business Administration(5) | 199.9 | - |
Others(6) | 9.8 | 65.6 |
Non-Award Unit Study | 83.2 | 168.5 |
Total | 727.2 | 737.6 |
Notes:
(1) This includes courses that are part of the same track, namely Associate Degree of Business and Diploma of Business.
(2) This includes courses that are part of the same track, namely Associate Degree of Applied Finance and Accounting and Diploma of Applied Finance and Accounting.
(3) This includes courses that are part of the same track, namely Master of Professional Accounting, Graduate Diploma of Accounting and Graduate Certificate in Accounting. This also includes a small number from students who enrolled in certain accounting units to fulfil academic requirements for membership with CPA Australia.
(4) This includes courses that are part of the same track, namely Master of Marketing and Public Relations, Graduate Diploma of Public Relations and Marketing, Graduate Diploma of International Business, and Graduate Certificate in Business Management.
(5) This includes courses that are part of the same track, namely Master of Business Administration, Graduate Certificate of Business and Graduate Diploma of Business Management.
(6) This includes all other postgraduate courses.
Tuition fee
Annual tuition fee increases will be capped at 15% and increases over any three-year period will not exceed 30%. The tuition fee increase is determined by the school management teams subject to market conditions.
International | Domestic | |||
Course Name | 2021 | 2020 | 2021 | 2020 |
AUD$ | AUD$ | AUD$ | AUD$ | |
Diploma in Applied Finance and Accounting | 21,000 | 21,000 | 17,000 | 17,000 |
Associate Degree of Applied Finance and Accounting | 42,000 | 42,000 | 34,000 | 34,000 |
Bachelor of Applied Finance and Accounting | 63,000 | 63,000 | 51,000 | 51,000 |
Diploma of Business | 21,000 | 21,000 | 15,000 | 15,000 |
Associate Degree of Business | 42,000 | 42,000 | 30,000 | 30,000 |
Bachelor of International Business | 63,000 | 63,000 | 45,000 | 45,000 |
Graduate Certificate in Accounting | 11,960 | 11,960 | 8,500 | 8,500 |
Graduate Certificate in Business Management | 11,960 | 11,960 | 8,500 | 8,500 |
Graduate Certificate in Business Research | 18,000 | 18,000 | 10,000 | 10,000 |
Graduate Certificate in Business | 11,960 | 11,960 | 8,500 | 8,500 |
Graduate Certificate in Financial Planning | 11,960 | 11,960 | 8,500 | 8,500 |
Graduate Certificate in Financial Technologies | 11,960 | 11,960 | 8,500 | 8,500 |
Management | ||||
Graduate Diploma of Accounting | 23,920 | 23,920 | 17,000 | 17,000 |
Graduate Diploma of International Business | 23,920 | 23,920 | 17,000 | 17,000 |
International
Domestic
Course Name | 2021 | 2020 | 2021 | 2020 |
AUD$ | AUD$ | AUD$ | AUD$ | |
Graduate Diploma of Marketing | 23,920 | 23,920 | 17,000 | 17,000 |
Graduate Diploma of Marketing and Public Relations | 23,920 | 23,920 | 17,000 | 17,000 |
Graduate Diploma of Business Administration | 23,000 | 23,000 | 17,000 | 17,000 |
Graduate Diploma of Financial Planning | 23,920 | 23,920 | 17,000 | 17,000 |
Graduate Diploma of Financial Technologies | 23,920 | 23,920 | 17,000 | 17,000 |
Management | ||||
Master of International Business | 35,880 | 35,880 | 25,500 | 25,500 |
Master of Marketing and Public Relations | 35,880 | 35,880 | 25,500 | 25,500 |
Master of Professional Accounting | 35,880 | 35,880 | 25,500 | 25,500 |
Master of Accounting Practice | 35,880 | 35,880 | 25,500 | 25,500 |
Master of Professional Accounting Services | 47,840 | 47,840 | 34,000 | 34,000 |
(formerly known as Master of Professional | ||||
Accounting and Business) | ||||
Master of Business Research | 72,000 | 72,000 | 40,000 | 40,000 |
Master of Business Administration | 46,000 | 46,000 | 34,000 | 34,000 |
Master of Business Administration | 46,000 | 46,000 | 34,000 | 34,000 |
(Professional Accounting) | ||||
Master of Business Administration | 46,000 | 46,000 | 34,000 | 34,000 |
(FinTech Management) | ||||
Master of Financial Planning | 47,840 | 47,840 | 34,000 | 34,000 |
Master of Accounting Intelligence | 47,840 | 47,840 | 34,000 | 34,000 |
Master of Applied Financial Technology and | 47,840 | 47,840 | 34,000 | 34,000 |
Blockchain | ||||
Master of Big Data Auditing | 47,840 | 47,840 | 34,000 | 34,000 |
Master of Taxation (with Data Analysis and Artificial | 47,840 | 47,840 | 34,000 | 34,000 |
Intelligence) | ||||
Bachelor of Laws | 80,000 | 80,000 | 48,000 | 48,000 |
Master of Laws | 20,000 | 20,000 | 20,000 | 20,000 |
Outlook |
Our business practices in the Reporting Period demonstrated that TOP's principal strategy as Innovation towards Intelligent Education could guide us continuously weathering the uncertainty under the COVID-19 pandemic and growing along with innovative approach towards TOP's goal in the future.
• As the pandemic period continues, TOP is still facing the significant challenges. We believe that the innovative approach towards intelligent education represents the trend of higher education development in digital economy, thus shall not change for the foreseeable future years. TOP has committed to develop the digitalised education to deliver through on-campus or in distance, while to further diversify by delivering to overseas students in their locations through our international presence.
• As eligible FEE-HELP provider, TOP's courses were approved for FEE-HELP student tuition loans. With the impact of pandemic and our enhanced capability of online delivery with innovative courses, TOP will be able to attract domestic students through FEE-HELP authority.
• The Group will keep transferring digital resources and capabilities to accelerate growth in new revenue channel, such as online delivery of programs and domestic markets in Australia, while waiting for international borders to reopen.
• The Group is actively seeking merger and acquisition ("M&A") or direct investment opportunity on target in domestic market, including reputable institutes and domestic recruitment partners, to expand and diversify the Group's business. Meanwhile, the Group will keep assessing potential opportunities on online study technologies and cooperation with organisations in other countries and regions, which can bring business synergy to the Group and support our direction of internationalisation with respect of transnationally diversifying student sources, as well as localising the education assets in China and other regions in Southeast Asia.
FINANCIAL REVIEW
Revenue
Revenue represents the value of services rendered during the Reporting Period. The Group derives revenue primarily from tuition fees.
Revenue decreased by approximately 7.8% from approximately AUD$14.5 million for the six months ended 31 December 2019 to approximately AUD$13.4 million for the six months ended 31 December 2020, mainly due to the decrease in the course fee income affected by the COVID-19 pandemic. A breakdown of revenue is shown below:
Six months ended 31 December
2020 | 2019 | Change | |
(Unaudited) | (Unaudited) | ||
AUD$' 000 | AUD$' 000 | % | |
Course fee income | 12,699 | 13,545 | -6.2% |
Other service fee income | 707 | 989 | -28.5% |
13,406 | 14,534 | -7.8% |
Tuition fee contributed over 94.7% of the Group's revenue while other service fee represented approximately 5.3% of the revenue.
Cost of Revenue
Cost of revenue consists primarily of staff costs, depreciation and amortisation, office expenses, consultation and student related costs.
Cost of revenue increased by approximately AUD$0.2 million, or 2.9%, from approximately AUD$6.9 million for the six months ended 31 December 2019 to approximately AUD$7.1 million for the six months ended 31 December 2020. The increase primarily resulted from the net effect of the increase in student related costs, the increase in amortisation, the increase in depreciation of new campus fit outs, and the decrease in employee and consulting services.
Gross Profit and Gross Profit Margin
Gross profit decreased by approximately 17.3% from AUD$7.7 million for the six months ended 31 December 2019 to AUD$6.3 million for the six months ended 31 December 2020, and the gross profit margin decreased from approximately 52.8% for the six months ended 31 December 2019 to approximately 47.3% for the six months ended 31 December 2020, primarily due to the impact of the COVID-19 pandemic on course fee income.
Other Income and Gains
Other income increased by 239.4% from approximately AUD$0.4 million for the six months ended 31 December 2019 to approximately AUD$1.5 million for the six months ended 31 December 2020. The increase primarily resulted from the increase in rent waiver, government grants and other income.
Administrative Expenses
Administrative expenses primarily consist of the salaries and other benefits for general and administrative staff, office-related expenses, depreciation and public company expenses.
Administrative expenses increased by 21.0% from approximately AUD$4.1 million for the six months ended 31 December 2019 to approximately AUD$5.0 million for the six months ended 31 December 2020. This increase was primarily due to the increase in depreciation in new campus fit outs, rental related expenses and employee expenses.
Advertising and Marketing Expenses
Advertising and marketing expenses primarily consist of salaries and other benefits for recruitment and marketing staff, advertising expenses and student recruitment expenses.
Advertising and marketing expenses increased by approximately 29.8% from approximately AUD$0.9 million for the six months ended 31 December 2019 to approximated AUD$1.2 million for the six months ended 31 December 2020, mainly due to the increase in recruitment promotion expenses.
Finance Costs
Finance costs represent the interest expense on the lease liabilities.
Finance costs increased by 65.0% from approximately AUD$0.3 million for the six months ended 31 December 2019 to approximately AUD$0.4 million for the six months ended 31 December 2020. This increase was arising from lease liabilities due to the adoption of the accounting standard IFRS 16.
Profit for the Reporting Period
As a result of the above factors, the Group's net profit after tax for the period decreased by approximately 51.8% from approximately AUD$2.0 million for the six months ended 31 December 2019 to approximately AUD$0.9 million for the six months ended 31 December 2020.
Capital Expenditure
Our capital expenditures for the six months ended 31 December 2020 were approximately AUD$4.0 million, consisted primarily of expenditures on (i) plant and equipment, (ii) classroom equipment and office and (iii) teachers reference books.
Liquidity, Financial Resources and Gearing Ratio
As at 31 December 2020, the Group had cash on hand of AUD$29.8 million (30 June 2020: AUD$34.4 million) with no bank borrowings (30 June 2020: AUD$0). During the six months ended 31 December 2020, the Group financed our working capital requirements and capital expenditures principally through net cash inflows from operating activities and the net proceeds raised from the initial public offering.
As at 31 December 2020, the gearing ratio, which is calculated on the basis of total borrowing and total equity of the Group was 0% (30 June 2020: 0%).
Significant Investments, Acquisitions and Disposals
Save as disclosed in this report, there were no other significant investments held, material acquisitions or disposals of subsidiaries, associates and joint ventures during the Reporting Period, nor any plan authorized by the Board for other material investments or additions of capital assets during the six months ended 31 December 2020.
Foreign Exchange Risk Management
The functional currency of the Group is AUD. The majority of the Group's revenue and expenditures are denominated in AUD, except that certain expenditures are denominated in HKD. As at 31 December 2020, certain bank balances and payables were denominated in USD and HKD. The Group did not use any financial instruments for hedging purposes. However, the management monitors foreign exchange exposure and will consider hedging significant foreign currency exposure.
Charges on the Group's Assets
There were no charges on the Group's assets as at 31 December 2020 (30 June 2020: Nil).
Contingent Liabilities
Except of the contingent considerations relates to the acquisition of SCOTS (refer to note 20 to the consolidated interim financial statements), at the end of the Reporting Period, the Group did not have any other significant commitments.
EMPLOYMENT AND REMUNERATION POLICIES
During the six months ended 31 December 2020, including academic staff, the Company employed 119 staff (six months ended 31 December 2019: 152). The remuneration packages of the employees of the Company are determined with reference to their qualification, working experience, performance, contribution to the Company and prevailing market rate.
The Company's remuneration policy is formulated under the guidance of the Australian Law, industry award as well as various market factors. The Company pays its permanent staff with a basic annual salary plus superannuation and other standard entitlements under Australian employment law; and pays its casual staff on a sessional basis with an hourly basis plus standard entitlements.
A Remuneration Committee was set up for reviewing the Company's remuneration policy and structure for all Directors and senior management of the Company, having regard to the Company's operating results, individual performance of the Directors and senior management and comparable market practices. None of the Directors will determine their own remuneration.
The Directors and senior management may also receive shares and/or options to be granted under the Share Option Scheme and/or Share Award Scheme.
The Company places great importance on the continuing development of professional knowledge and skills for our employees. The Company believes that the continued growth and success of our business is built upon employee excellence and their ability to provide quality of services to our students and corporate clients, and is also a key element on our objective to retain a team of quality and skilled core workforce.
The Company strongly encourages all employees to participate in systematic training and professional development. In addition, the Company provides comprehensive training programs to ensure that employees have the training required to fulfil the continuous professional training requirements of their respective profession.
INTERIM DIVIDEND
The Board does not recommend an interim dividend in respect of the six months ended 31 December 2020 (six months ended 31 December 2019: Nil).
PURCHASE, SALES OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY
During the Reporting Period, the Company repurchased a total of 35,470,000 Shares on the Stock Exchange at an aggregate consideration (before brokerage and expenses) of approximately HK$10,341,150. As at 31 December 2020, 35,390,000 repurchased Shares have been cancelled. As at the date of this report, all the aforesaid repurchased Shares have been cancelled.
Total number
of Shares | Highest price | Lowest price | Aggregate | |
Month of repurchases | repurchased | paid per Share | paid per Share | consideration |
HK$ | HK$ | HK$ | ||
July 2020 | 10,000,000 | 0.300 | 0.270 | 2,825,200 |
August 2020 | 13,890,000 | 0.325 | 0.270 | 4,073,350 |
September 2020 | 930,000 | 0.300 | 0.285 | 271,900 |
October 2020 | 4,800,000 | 0.315 | 0.290 | 1,454,300 |
November 2020 | 2,530,000 | 0.310 | 0.285 | 749,350 |
December 2020 | 3,320,000 | 0.300 | 0.285 | 967,050 |
Save as disclosed above, neither the Company nor any of its subsidiaries purchased, sold or redeemed any Shares during the Reporting Period.
USE OF NET PROCEEDS FROM THE COMPANY'S LISTING
Net proceeds from the Listing (including the over-allotment option and after deducting underwriting fee and relevant expenses) amounted to approximately HK$172 million or AUD$30 million. As at 31 December 2020, a total amount of approximately HK$96 million of the net proceeds had been used by the Company according to the allocation set out in the Prospectus as follows:
ExpectedPurpose
Percentage to total amount
Net proceeds HK$ (million)
Utilised amount as at 31 December 2020
Unutilised amount as at 31 December 2020
timeline for utilising the unutilised amount
HK$ (million)
HK$ (million)
Acquiring or investing in educational groups/institutions in the PRC and in Australia
41.0%
70.4
20.7
49.7
Developing "Intelligent Education",
27.8%
47.8
23.1
24.7
which includes utilising digital education solutions for course contents, infrastructure of campuses and offices, and teaching and learning method
by the end of 2022 by the end of 2022
Upgrading TOP's existing campus Expanding TOP's campus locations Establishing virtual student experience centre
Expanding TOP's research program and developing PhD towards our strategic goal
9.4% 5.5% 0.6% 3.1%
16.1 9.5 1.0
16.1 9.5 1.0
5.3
4.0
- - - 1.3
- - - by the end of 2022
Expanding TOP's marketing activities Working capital and general corporate
4.4% 8.2%
7.6 14.0
7.6 14.0
- -
- -
purposes
Total
100.0%
171.7
96.0
75.7
AUDIT AND REVIEW OF FINANCIAL INFORMATION
The Audit Committee reviewed the unaudited financial statements and the interim report of the Group for the six months ended 31 December 2020, including the accounting principles and practices adopted by the Group.
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES
As at 31 December 2020, the interests and short positions of the Directors and chief executives of the Company in the Shares, underlying Shares and debentures of the Company (within the meaning of Part XV of the SFO), as recorded in the register required to be kept by the Company pursuant to section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code, were as follows:
Number of Shares | Approximate % | ||
and Underlying | of Shareholding | ||
Name of Director/Chief Executive | Capacity/Nature of interest | Shares(1) | in the Company(2) |
Dr. Minshen Zhu | Beneficial owner/Interest held | 975,838,000(3), (4) | 40.05% |
jointly with other persons | |||
Mr. Amen Kwai Ping Lee | Beneficial owner/Interest held | 855,518,000(5) | 35.11% |
jointly with other persons | |||
Mr. Thomas Richard Seymour | Interested in a controlled | 21,008,000(6) | 0.86% |
corporation | |||
Mr. Kai Zhang (as alternate director to | Beneficial owner | 20,976,000 | 0.86% |
Mr. Thomas Richard Seymour) | |||
Mr. Jing Li (resigned on 24 June 2019) | Beneficial owner | 4,592,000(7) | 0.18% |
Professor Brian James Stoddart | Beneficial owner | 4,592,000(8) | 0.18% |
Professor Steven Schwartz | Beneficial owner | 3,892,000(9) | 0.15% |
Ms. Sumeng Cao | Beneficial owner | 7,294,274(10) | 0.29% |
Ms. Rongning Xu (as alternate director | Beneficial owner | 7,294,274(11) | 0.29% |
to Dr. Minshen Zhu) | |||
Notes: |
(1) All interests stated are long positions.
(2) The calculation is based on the total number of 2,436,150,000 Shares in issue as at 31 December 2020.
(3) The members of the Controlling Shareholders Group are parties acting in concert and on 13 October 2017, they entered into a confirmation deed to, among others, confirm that they have been acting together with an aim to achieving decisions at general meetings of the Company on a unanimous basis. Members of the Controlling Shareholders Group are the founding Shareholders or have invested in the Company at an early stage. Dr. Zhu and Mr. Lee are the members of the Controlling Shareholders Group. As at 31 December 2020, all the members of the Controlling Shareholders Group together controlled 855,518,000 Shares. Under the SFO, each of Dr. Zhu and Mr. Lee is deemed to be interested in the Shares beneficially owned by the other members of the Controlling Shareholders Group.
(4) Apart from 228,506,000 Shares beneficially owned by Dr. Zhu and 627,012,000 Shares held by other members of the Controlling Shareholders Group, such interest includes Dr. Zhu's entitlement to receive up to 120,320,000 Shares pursuant to the exercise of performance rights granted to him under the Pre-IPO Performance Rights Plan, subject to the conditions (including vesting conditions) of those rights.
(5) Mr. Lee beneficially owns 150,002,000 Shares and is also deemed to be interested in the Shares held by other members of the Controlling Shareholders Group.
(6) Mr. Thomas Richard Seymour controls 50% of the voting rights of TD Seymour Pty Ltd (ACN 609 660 139). As such, Mr. Thomas Richard Seymour is deemed to be interested in 21,008,000 Shares held by TD Seymour Pty Ltd (ACN 609 660 139).
(7) This represents 4,592,000 Shares beneficially owned by Mr. Jing Li which have been issued to him pursuant to the exercise of vested performance rights granted to him under the Pre-IPO Performance Rights Plan, subject to the conditions (including vesting conditions) of those rights. During the Reporting Period, certain performance rights had been vested and exercised and 3,062,000 Shares had been issued to Mr. Jing Li.
(8) Apart from 1,530,000 Shares beneficially owned by Professor Brian James Stoddart which have been issued to him pursuant to the exercise of vested performance rights, such interest includes Professor Brian James Stoddart's entitlement to receive up to 3,062,000 Shares pursuant to the exercise of performance rights granted to him under the Pre-IPO Performance Rights Plan, subject to the conditions (including vesting conditions) of those rights.
(9) Apart from 830,000 Shares beneficially owned by Professor Steven Schwartz which have been issued to him pursuant to the exercise of vested performance rights, such interest includes Professor Steven Schwartz's entitlement to receive up to 3,062,000 Shares pursuant to the exercise of performance rights granted to him under the Pre-IPO Performance Rights Plan, subject to the conditions (including vesting conditions) of those rights.
(10) This represents Ms. Sumeng Cao's entitlement to receive up to 1,294,274 Shares pursuant to the exercise of options granted to her under the Share Option Scheme, subject to the conditions (including vesting conditions) of those options, and the entitlement to receive up to 6,000,000 Shares pursuant to the exercise of Awarded Shares granted to her under the Share Award Scheme, subject to the conditions (including vesting conditions) of those Awarded Shares.
(11) This represents Ms. Rongning Xu's entitlement to receive up to 1,294,274 Shares pursuant to the exercise of options granted to her under the Share Option Scheme, subject to the conditions (including vesting conditions) of those options, and the entitlement to receive up to 6,000,000 Shares pursuant to the exercise of Awarded Shares granted to her under the Share Award Scheme, subject to the conditions (including vesting conditions) of those Awarded Shares.
Save as disclosed above, as at 31 December 2020, none of the Directors and chief executives of the Company had registered an interest or short position in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) that was required to be recorded pursuant to section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.
SUBSTANTIAL SHAREHOLDERS' INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES
As at 31 December 2020, so far as the Directors are aware, the following persons (other than Directors or chief executives of the Company) or corporations have interests or short positions in the Shares and the underlying Shares of the Company which were required to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept under section 336 of the SFO:
Approximate
Name of Shareholder | Nature of Interest | Position | Number of Shares | percentage(1) |
Ms. Xing Shi Huang | Interest of a spouse(2), (3) | Long | 975,838,000 | 40.05% |
Mr. Qingquan Yang | Beneficial owner(4); interest in | Long | 855,518,000 | 35.11% |
controlled corporation(4); | ||||
interest held jointly with | ||||
other persons(2) | ||||
Ms. Shuling Chen | Interest of a spouse(5) | Long | 855,518,000 | 35.11% |
Billion Glory | Beneficial owner(4); interest held | Long | 855,518,000 | 35.11% |
jointly with other persons(2) | ||||
Tristar United | Beneficial owner(6); interest held | Long | 855,518,000 | 35.11% |
jointly with other persons(2) | ||||
Ms. Josephine | Interest of a spouse(7) | Long | 855,518,000 | 35.11% |
Kam Shan Lam | ||||
Mr. Xin Wang | Beneficial owner(8); interest held | Long | 855,518,000 | 35.11% |
jointly with other persons(2) | ||||
Ms. Zhuo Liu | Interest of a spouse(9) | Long | 855,518,000 | 35.11% |
Xinjiang Guoli | Beneficial owner | Long | 351,180,000 | 14.41% |
PwC Australia | Beneficial owner(10) | Long | 264,708,000 | 10.86% |
Loyal Creation | Beneficial owner | Long | 224,096,000 | 9.19% |
Minsheng Education Group | Interest in a controlled | Long | 209,000,000 | 8.57% |
corporation(11) |
Notes:
(1) The calculation is based on the total number of 2,436,150,000 Shares in issue as at 31 December 2020.
(2) Members of the Controlling Shareholders Group are parties acting in concert and on 13 October 2017, they entered into a confirmation deed to, among others, confirm their acting-in-concert agreement. At 31 December 2020, all the members of the Controlling Shareholders Group together controlled 855,518,000 Shares. Under the SFO, each Ms. Xing Shi Huang, Mr. Qingquan Yang, Ms. Shuling Chen, Tristar United, Ms. Josephine Kam Shan Lam and Mr. Xin Wang of the Controlling Shareholders Group are deemed to be interested in the Shares beneficially owned by the other members of the Controlling Shareholders Group.
(3) Ms. Xing Shi Huang is the spouse of Dr. Minshen Zhu and is deemed to be interested in the shareholding interests of Dr. Zhu by virtue of the disclosure requirements of the SFO.
(4) Mr. Qingquan Yang directly holds 151,102,000 Shares and Billion Glory, which is wholly-owned by Mr. Yang, directly holds 59,524,000 Shares. Accordingly, Mr. Yang is deemed to be interested in 59,524,000 Shares held by Billion Glory by virtue of the disclosure requirements of the SFO. Mr. Yang and Billion Glory are members of the Controlling Shareholders Group and are also deemed to have interested in the Shares beneficially owned by the other members of the Controlling Shareholders Group.
(5) Ms. Shuling Chen is the spouse of Mr. Qingquan Yang and is deemed to be interested in the shareholding interests of Mr. Yang by virtue of the disclosure requirements of the SFO.
(6) Tristar United beneficially owned 150,002,000 Shares and is also deemed to have interests in Shares held by the other members of the Controlling Shareholders Group.
(7) Ms. Josephine Kam Shan Lam is the spouse of Mr. Amen Kwai Ping Lee and is deemed to be interested in the shareholding interests of Mr. Lee by virtue of the disclosure requirements of the SFO.
(8) Mr. Xin Wang beneficially owned 116,382,000 Shares and is also deemed to have interests in Shares held by the other members of the Controlling Shareholders Group.
(9) Ms. Zhuo Liu is the spouse of Mr. Xin Wang and is deemed to be interested in the shareholding interests of Mr. Wang by virtue of the disclosure requirements of the SFO.
(10) PwC Nominees is the registered owner of the Shares and holds the Shares as a bare trustee for PwC Australia as the sole beneficiary of a trust under a trust arrangement between PwC Nominees and PwC Australia. Accordingly, PwC Australia is deemed to be interested in 264,708,000 Shares held by PwC Nominees as nominee and bare trustee by virtue of the disclosure requirements of the SFO.
(11) Minsheng Education Group is the sole shareholder of Minsheng Development which directly holds 209,000,000 Shares, and accordingly, Minsheng Education Group is deemed to be interested in 209,000,000 Shares held by Minsheng Development by virtue of the disclosure requirements of the SFO.
CHANGES IN DIRECTORS' INFORMATION
Pursuant to Rule 13.51B(1) of the Listing Rules, below are the changes in the information of the Directors:
(1) Professor Weiping Wang was appointed as an independent non-executive director of Neusoft Education Technology Co. Limited, a company listed on the Stock Exchange (stock code: 9616), since 29 September 2020;
(2) Professor Steven Schwartz ceased to be the consultant of Australian Government Department of Health on 31 December 2019; and
(3) Mr. Tianye Wang ceased to be an independent non-executive director of Henan Pinggao Electric Company Limited (stock code: 600312), a company listed on the Shanghai Stock Exchange on 25 September 2020.
PRE-IPO PERFORMANCE RIGHTS PLAN, SHARE OPTION SCHEME AND SHARE AWARD SCHEME
The Company has adopted Pre-IPO Performance Rights Plan, Share Option Scheme and Share Award Scheme for the purpose of motivating eligible participants to optimise their future contributions to the Company and/or to reward them for their past contributions.
Pre-IPO Performance Rights Plan
The following sets out movements in the Pre-IPO Performance Rights granted under the Pre-IPO Performance Rights Plan during the Reporting Period:
Balance as at | Lapsed/ | Balance as at | |||
30 June 2020 | Granted | Exercised | cancelled | 31 December | |
(number of | during the | during the | during the | 2020 (number | |
underlying | Reporting | Reporting | Reporting | of underlying | |
Grantee | Shares) | Period | Period | Period | Shares) |
Directors | |||||
Dr. Minshen Zhu | 120,320,000 | - | - | - | 120,320,000 |
Mr. Jing Li (resigned on 24 June 2019) | 3,062,000(1) | - | 3,062,000 | - | - |
Prof. Brian James Stoddart | 3,062,000 | - | - | - | 3,062,000 |
Prof. Steven Schwartz | 3,062,000 | - | - | - | 3,062,000 |
Council Members | |||||
Prof. Stephen Nicholas | 2,066,000 | - | - | - | 2,066,000 |
Prof. John Hearn | 2,066,000 | - | - | - | 2,066,000 |
Dr. Le Ma | 462,000 | - | - | - | 462,000 |
Notes: |
(1)Pursuant to the Pre-IPO Performance Rights Plan rules, the Board approved Mr. Jing Li to retain his unvested Performance Rights based on the condition that he is a Good Leaver and his contribution to the Company during his tenure.
The Pre-IPO Performance Rights granted to Dr. Minshen Zhu will vest on the fifth anniversary of the date of grant, being 10 June 2022, subject to the satisfaction of the vesting conditions.
The Pre-IPO Performance Rights granted to the grantees other than Dr. Minshen Zhu will vest subject to the satisfaction of the vesting conditions as (i) the Listing of the Company; and (ii) that on the applicable vesting dates (the first being on 12 November 2018), the grantee remains a council member or non-executive Director of the Company and the Company has not taken steps to remove the grantee from that role.
The Pre-IPO Performance Rights granted to the grantees other than Dr. Minshen Zhu will be vested during a 3-year period, during which 33% of the total rights will be vested in each year. The grantee may exercise in whole or in part of all vested Pre-IPO Performance Rights at any time during the 15 years commencing from the date the Pre-IPO Performance Rights were issued.
The grantees of the performance rights granted under the Pre-IPO Performance Rights Plan above is/are not required to pay for the grant of any performance rights under the Pre-IPO Performance Rights Plan.
Save and except as disclosed above, no other rights have been granted or agreed to be granted by the Company under the Pre-IPO Performance Rights Plan.
A summary of the principal terms of the Pre-IPO Performance Rights were disclosed in the section headed "Report of the Directors" of the 2020 Annual Report of the Company.
Share Option Scheme
On 18 July 2018 ("Date of Grant"), the Company granted share options (the "Share Options") to subscribe for a total of 25,781,938 Shares under the Share Option Scheme, among which, the options to subscribe for 1,294,274 Shares were granted to Ms. Sumeng Cao, our executive Director, and to Ms. Rongning Xu, the alternate Director to Dr. Minshen Zhu, respectively.
The consideration for the acceptance of the Share Options was AUD$1.00. The exercise price of the Share Options granted is HK$0.560, which represents no less than the highest of the following: (i) the closing price of HK$0.540 per Share as stated in the Stock Exchange's daily quotation sheet on the Date of Grant; (ii) the average of the closing prices as stated in the Stock Exchange's daily quotation sheets for the five business days immediately preceding the Date of Grant of HK$0.560 per Share; and (iii) the nominal value of the Share.
The validity period of the Share Options is 10 years from the Date of Grant, i.e. from 18 July 2018 to 17 July 2028 (both days inclusive), and the Share Options shall lapse at the expiry of the validity period.
The Share Options shall be vested in three tranches in accordance with the following dates: (i) up to 33.33% of the Share Options shall be vested to each Grantee at any time after expiration of 12 months from the Date of Grant, i.e. 17 July 2019; (ii) up to 33.33% of the Share Options shall be vested to each Grantee at any time after expiration of 24 months from the Date of Grant, i.e. 17 July 2020; (iii) up to 33.34% of the Share Options shall be vested to each Grantee at any time after expiration of 36 months from the Date of Grant, i.e. 17 July 2021.
Details of the movement of Share Options granted under the Share Option Scheme for six months ended 31 December 2020 are as follows:
Lapsed/
Granted | Exercised | cancelled | |||
Balance as at | during the | during the | during the | Balance as at | |
Reporting | Reporting | Reporting | 31 December | ||
Grantee | 2020 | Period | Period | Period | 2020 |
Directors | |||||
Ms. Sumeng Cao | 1,294,274 | - | - | - | 1,294,274 |
Ms. Rongning Xu | 1,294,274 | - | - | - | 1,294,274 |
Employees in aggregate | 21,433,353 | - | - | - | 21,433,353 |
Total | 24,021,901 | - | - | - | 24,021,901 |
1 July
Save and except as disclosed above, no other options have been granted or agreed to be granted by the Company under the Share Option Scheme.
A summary of the principal terms of the Share Option Scheme were disclosed in the section headed "Report of the Directors" of the 2020 Annual Report of the Company.
Share Award Scheme
On 23 October 2018, the Company adopted the Share Award Scheme in which the Employees will be entitled to participate. The Share Award Scheme is not a share option scheme and is not subject to the provisions of Chapter 17 of the Listing Rules.
The specific objectives of the Share Award Scheme are (i) to recognise the contributions by certain Employees and to provide them with incentives in order to retain them for the continual operation and development of the Company; and (ii) to attract suitable personnel for further development of the Company.
Subject to any early termination as may be determined by the Board pursuant to the Share Award Scheme rules, the Share Award Scheme shall be valid and effective for a term of 10 years commencing on the Adoption Date (i.e., 23 October 2018).
The Share Award Scheme shall be subject to the administration of the Board, the share award committee and the Trustee in accordance with the Share Award Scheme rules and the Trust Deed.
The Board shall not make any further award which will result in the aggregate number of Shares awarded by the Board under the Share Award Scheme exceeding 1.5% of the total number of the issued Shares as at the Adoption Date, being 38,828,220 Shares.
For the six months ended 31 December 2020, the Trustee of the Share Award Scheme had not purchased any Shares pursuant to the Trust Deed and Share Award Scheme.
Details of the grant of Awarded Shares to the Directors and other employees of the Company are as follows:
Exercised, lapsed or
Balance as at Granted cancelled Balance as at
1 July during the during the 31 DecemberGrantee
2020 Period Period 2020
Directors
Ms. Sumeng Cao | 6,000,000 | - | - | 6,000,000 |
Ms. Rongning Xu | 6,000,000 | - | - | 6,000,000 |
Employees (in aggregate) | 19,000,000 | - | - | 19,000,000 |
Total | 31,000,000 | - | - | 31,000,000 |
A summary of the principal terms of the Share Option Scheme were disclosed in the section headed "Report of the Directors" of the 2020 Annual Report of the Company.
CORPORATE GOVERNANCE PRACTICES
The Board is committed to achieving good corporate governance standards.
The Board believes that good corporate governance standards are essential in providing a framework for the Company to safeguard the interests of Shareholders, enhance corporate value, formulate its business strategies and policies, and enhance its transparency and accountability.
The Board is of the view that during the six months ended 31 December 2020, the Company had complied with applicable code provisions of the CG Code as set out in Appendix 14 to the Listing Rules except code provision A.2.1 as noted in the paragraph headed "Chairman and Chief Executive Officer".
Chairman and Chief Executive Officer
Pursuant to the code provision A.2.1 of the CG Code, the roles of the chairman and the chief executive of the Company should be separate and should not be performed by the same individual. During the Reporting Period, the roles of the chairman and CEO of the Company were both performed by Dr. Minshen Zhu. The Board believes that the roles of both Chairman and CEO vested in the same individual would enable the Company to achieve higher responsiveness, efficiency and effectiveness when formulating business strategies and executing business plans.
Furthermore, in view of Dr. Zhu's extensive industrial experience and significant role in the historical development of the Company, the Board believes that it is beneficial to the business prospects of the Company that Dr. Zhu continues to act as both our Chairman and CEO, and the balance of power and authority is sufficiently maintained by the operation of the Board, comprising the executive Directors, non-executive Directors, and independent non-executive Directors.
MODEL CODE FOR SECURITIES TRANSACTIONS
The Company has adopted the Model Code as the code of conduct regarding Directors' securities transactions. Specific enquiry has been made by the Company with all Directors and the Directors have confirmed that they had complied with the Model Code throughout the six months ended 31 December 2020.
EVENTS AFTER THE REPORTING PERIOD
In January 2021, TOP received approval of increasing 190 student capacity of regional campus in Hobart, Tasmania, which brings the total capacity in Hobart campus from 150 to 340.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the six months ended 31 December 2020
Six months ended 31 December
Notes | 2020 | 2019 | |
(unaudited) | (unaudited) | ||
AUD$' 000 | AUD$' 000 | ||
REVENUE | 4 | 13,406 | 14,534 |
Cost of sales | (7,063) | (6,866) | |
Gross profit | 6,343 | 7,668 | |
Other income and gains | 4 | 1,466 | 432 |
Administrative expenses | (4,969) | (4,108) | |
Advertising and marketing expenses | (1,212) | (934) | |
Finance costs | 5 | (424) | (257) |
PROFIT BEFORE TAX | 6 | 1,204 | 2,801 |
Income tax expense | 7 | (257) | (835) |
PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 947 | 1,966 | |
Attributable to: | |||
Owners of the Company | 933 | 1,944 | |
Non-controlling interests | 14 | 22 | |
947 | 1,966 | ||
EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS | |||
OF THE COMPANY | |||
Basic earnings per share (AUD cents) | 9 | 0.038 | 0.077 |
Diluted earnings per share (AUD cents) | 9 | 0.036 | 0.073 |
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
NON-CURRENT ASSETS Property, plant and equipment Intangible assets
Right-of-use assets Prepayments and deposits Goodwill
Deferred tax assets
Total non-current assets
CURRENT ASSETS Inventories
Trade receivables
Prepayments, other receivables and other assets Tax receivable
Cash and cash equivalents
Total current assets
CURRENT LIABILITIES Trade payables
Other payables and accruals Lease liabilities
Contract liabilities Tax payable
Total current liabilities
NET CURRENT ASSETS
TOTAL ASSETS LESS CURRENT LIABILITIESNotes
13 14 15
11 12
12
11,048 7,684
30 June 2020
(audited) AUD$' 000
10,995 10,635
14,868 7,157
1,408 1,593
1,533 1,533
237 450
40,089 29,052
162 164
137 229
3,654 3,095
-
29,830 34,416
34,214 37,904
2,431 1,951
3,067 3,145
735 778
2,396 1,896
- 73
8,629 7,843
25,585 30,061
65,674 59,113
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
Notes | 2020 | 2020 | |
(unaudited) | (audited) | ||
AUD$' 000 | AUD$' 000 | ||
NON-CURRENT LIABILITIES | |||
Lease liabilities | 15,571 | 6,786 | |
Other payables and accruals | 14 | 346 | 838 |
Total non-current liabilities | 15,917 | 7,624 | |
Net assets | 49,757 | 51,489 | |
EQUITY | |||
Share capital | 16 | 36,491 | 38,371 |
Treasury shares | 16 | (2,236) | (2,236) |
Reserves | 15,023 | 14,889 | |
Non-controlling interests | 479 | 465 | |
Total equity | 49,757 | 51,489 | |
Sumeng Cao | |||
Director |
Minshen Zhu
30 June
Director
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2020
Notes
As at 1 July 2020 (audited) Profit and total comprehensive income for the period
Issue of shares Dividends declared
Cancellation of shares 16 Equity-settled performance
rights arrangements 17
At 31 December 2020 (unaudited)
Issued capital AUD$' 000 Treasury shares AUD$' 000 Share-based payment reserve AUD$' 000 Retained profitsNon-controlling interestTotal equity 38,371 (2,236) 3,869 - - - |
AUD$' 000 AUD$' 000 AUD$' 000 11,020 465 51,489 933 - 14 - 947 - - - (1,300) - (1,300) 152 - (1,861) |
133 - (133) - (2,013) - - - - 482 - - 482 36,491 (2,236) 4,218 10,805 479 49,757 |
For the six months ended 31 December 2019
Share-based | Non- | ||||||
Issued | Treasury | payment | Retained | controlling | Total | ||
capital | shares | reserve | profits | interest | equity | ||
AUD$' 000 | AUD$' 000 | AUD$' 000 | AUD$' 000 | AUD$' 000 | AUD$' 000 | ||
As at 1 July 2019 (audited) | 43,221 | (1,140) | 2,617 | 8,491 | - | 53,189 | |
Profit and total comprehensive | |||||||
income for the period | - | - | - | 2,716 | 22 | 2,738 | |
Acquisition of subsidiary | - | - | - | - | 481 | 481 | |
Dividends declared | - | - | - | (1,902) | - | (1,902) | |
Repurchase of shares | - | (1,074) | - | - | - | (1,074) | |
Cancellation of shares | 16 | (2,190) | - | - | (22) | - | (2,212) |
Equity-settled performance | |||||||
rights arrangements | 17 | - | - | 578 | - | - | 578 |
At 31 December 2019 (unaudited) | 41,031 | (2,214) | 3,195 | 9,283 | 503 | 51,798 |
Notes
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 31 December 2020
Notes | 2020 | 2019 | |
(unaudited) | (unaudited) | ||
AUD$' 000 | AUD$' 000 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Profit before tax | 1,204 | 2,801 | |
Adjustments for: | |||
Interest income | 4 | (39) | (169) |
Finance costs | 5 | 424 | 257 |
Foreign exchange gain | (20) | (225) | |
Loss on disposal of items of property, plant and equipment | 156 | - | |
Share-based payments | 17 | 482 | 578 |
Depreciation of property, plant and equipment | 506 | 275 | |
Depreciation of right-of-use assets | 1,012 | 886 | |
Amortisation of intangible assets | 858 | 606 | |
4,583 | 5,009 | ||
Decrease in inventory | 2 | - | |
Decrease in trade receivables | 92 | - | |
Increase in prepayments, other receivables and other assets | (373) | (87) | |
Increase in lease assets | (8,723) | (8,890) | |
Increase in trade payables | 481 | 398 | |
Increase/(decrease) in other payables and accruals | (23) | 2,157 | |
Increase in lease liabilities | 7,954 | 8,890 | |
Increase in contract liabilities | 500 | 1,167 | |
Cash generated from operations | 4,493 | 8,644 | |
Interest received | 39 | 169 | |
Income tax paid | (549) | (1,379) | |
Net cash flows from operating activities | 3,983 | 7,434 |
Six months ended 31 December
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)
For the six months ended 31 December 2020
Six months ended 31 December
Notes | 2020 | 2019 | |
(unaudited) | (unaudited) | ||
AUD$' 000 | AUD$' 000 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Foreign exchange gain | 20 | 225 | |
Acquisition of a subsidiary | - | (1,770) | |
Purchases of items of property, plant and equipment | (3,948) | (447) | |
Additions to intangible assets | (1,218) | (4,248) | |
Net cash flows used in investing activities | (5,146) | (6,240) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Cancellation of shares | (1,728) | (2,212) | |
Repurchase of shares | 16 | - | (1,074) |
Principal and interest portion of lease payments | (395) | (569) | |
Dividend paid | (1,300) | (1,902) | |
Net cash flows used in financing activities | (3,423) | (5,757) | |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (4,586) | (4,563) | |
Cash and cash equivalents at beginning of period | 34,416 | 42,352 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 29,830 | 37,789 | |
ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS | |||
Cash and bank balances | 29,830 | 37,789 |
31 December 2020
1. CORPORATE AND GROUP INFORMATION
Top Education Group Ltd (the "Company") is a limited liability company, incorporated on 2 October 2001 and domiciled in Australia. The registered office of the Company is located at Suite 1, Biomedical Building, 1 Central Avenue, Australian Technology Park, Eveleigh, New South Wales 2015, Sydney, Australia. The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange") since 11 May 2018.
During the six months ended 31 December 2020, the Company and its subsidiaries (collectively, the "Group") were principally engaged in providing private higher education services and English language courses in Australia.
2.1 BASIS OF PREPARATION
The interim condensed consolidated financial statements for the six months ended 31 December 2020 have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange and International Accounting Standard ("IAS") 34 Interim Financial Reporting .
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements for the year ended 30 June 2020, which have been prepared in accordance with International Financial Reporting Standards ("IFRSs").
The interim condensed consolidated financial statements are presented in Australian dollars ("AUD$") and all values are rounded to the nearest thousand except when otherwise indicated.
2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended 30 June 2020, except for the adoption of the new and revised IFRSs effective as of 1 July 2020.
Amendments to IFRS 3 | Definition of a Business |
Amendments to IFRS 9, IAS 39 and IFRS 7 | Interest Rate Benchmark Reform |
Amendments to IAS 1 and IAS 8 | Definition of Material |
2.2 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Continued)
The nature and impact of the revised IFRSs are described below:
(a) Amendments to IFRS 3 clarify and provide additional guidance on the definition of a business. The amendments clarify that for an integrated set of activities and assets to be considered a business, it must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. A business can exist without including all of the inputs and processes needed to create outputs. The amendments remove the assessment of whether market participants are capable of acquiring the business and continue to produce outputs. Instead, the focus is on whether acquired inputs and acquired substantive processes together significantly contribute to the ability to create outputs. The amendments have also narrowed the definition of outputs to focus on goods or services provided to customers, investment income or other income from ordinary activities. Furthermore, the amendments provide guidance to assess whether an acquired process is substantive and introduce an optional fair value concentration test to permit a simplified assessment of whether an acquired set of activities and assets is not a business. The Group has applied the amendments prospectively to transactions or other events that occurred on or after 1 January 2020. The amendments did not have any impact on the financial position and performance of the Group.
(b) Amendments to IFRS 9, IAS 39 and IFRS 7 address the effects of interbank offered rate reform on financial reporting. The amendments provide temporary reliefs which enable hedge accounting to continue during the period of uncertainty before the replacement of an existing interest rate benchmark. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties. The amendments did not have any impact on the financial position and performance of the Group as the Group does not have any interest rate hedge relationships.
(c) Amendments to IAS 1 and IAS 8 provide a new definition of material. The new definition states that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments clarify that materiality will depend on the nature or magnitude of information. The amendments did not have any impact on the Group's unaudited interim condensed consolidated financial information.
2.3 ISSUED BUT NOT YET EFFECTIVE INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.
3. OPERATING SEGMENT INFORMATION
The Group has identified the Chief Executive Officer ("CEO") and the Board of Directors as the chief operating decision makers. The Group is principally engaged in the provision of education services in Australia.
IFRS 8 Operating Segments requires operating segments to be identified on the basis of internal reporting about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to segments and to assess their performance. The information reported to the CEO and directors, for the purpose of resource allocation and assessment of performance, does not contain discrete operating segment financial information and the CEO and directors reviewed the financial results of the Group as a whole. Therefore, no further information about operating segments is presented.
During the Reporting Period, the Group operated within one geographical segment because all of its revenue was generated in Australia. All of the non-current assets of the Group are located in Australia. The non-current asset information is based on the assets' location and excludes financial instruments and deferred tax assets.
The CEO and the Board of Directors as the chief operating decision makers examine the Group's performance primarily based on the number of students and course fees earned.
No services provided to a single customer contributed 10% or more of the total revenue of the Group during the six months ended 31 December 2020 (six months ended 31 December 2019: nil).
32 TOP EDUCATION GROUP LTD • 2021 INTERIM REPORT
4. REVENUE AND OTHER INCOME AND GAINS
An analysis of revenue is as follows:
Six months ended 31 December
2020 | 2019 | |
(unaudited) | (unaudited) | |
AUD$' 000 | AUD$' 000 | |
Revenue from contracts with customers | ||
Course fee income | 12,699 | 13,545 |
Others service fee income | 707 | 989 |
13,406 | 14,534 | |
Revenue from contracts with customers | ||
(i) Disaggregated revenue information | ||
Geographical markets | ||
Australia | 13,406 | 14,534 |
Timing of revenue recognition | ||
Course fee income recognised over time | 12,699 | 13,545 |
Others service fee income recognised over time | 707 | 989 |
13,406 | 14,534 |
(ii) Performance obligations
Provision of private higher education services and English course services in Australia
The performance obligation is satisfied over time as services are rendered. The Group's contracts with students for higher education programs are normally with duration of 0.5 year renewed up to total duration of 1 to 4 years depending on the education programs. The Group's contracts with students for English courses are normally between 8 weeks and 20 weeks depending on the education programs. Tuition fees are determined and paid by the students before the start of each school term.
4. REVENUE AND OTHER INCOME AND GAINS (Continued)
Other income and gains Interest income
Realised foreign exchange gains, net Unrealised foreign exchange gains, net Remeasurement of contingence liabilities Government grants
Others
5. FINANCE COST
Interests on lease liabilities
34 TOP EDUCATION GROUP LTD • 2021 INTERIM REPORT
Six months ended 31 December
39 169
2019 (unaudited) AUD$' 000
20 169
- 56
- - 38 432
Six months ended 31 December
424 257
2019 (unaudited) AUD$' 000
424 257
6. | ||
2020 | 2019 | |
(unaudited) | (unaudited) | |
AUD$' 000 | AUD$' 000 | |
Amortisation of intangible assets | 858 | 606 |
Depreciation of property, plant and equipment | 506 | 275 |
Depreciation of right-of-use assets | 1,012 | 886 |
Auditors' remuneration | 51 | 36 |
Employee benefit expense (excluding directors' and | ||
chief executive's remuneration): | ||
Wages, salaries and other employee benefits | 4,178 | 3,994 |
Share-based payments | 482 | 307 |
Pension scheme contributions | ||
(defined contribution schemes) | 361 | 337 |
Less: Amount capitalised | (372) | (534) |
7,076 | 5,907 | |
7. | INCOME TAX |
PROFIT BEFORE TAX
The Group's profit before tax is arrived at after charging:
Six months ended 31 December
The Group is subject to income tax on profits arising in or derived from the jurisdiction in which the Group is domiciled and operates. Profits tax has been provided at the Group's statutory tax rate of 26% for the six months ended 31 December 2020 and 27.5% for the six months ended 31 December 2019 on the estimated assessable profits.
No provision for Hong Kong profits tax has been made as the Group had no assessable profits derived from or earned in Hong Kong during the Reporting Period.
Six months ended 31 December
2020 | 2019 | |
(unaudited) | (unaudited) | |
AUD$' 000 | AUD$' 000 | |
Current | ||
Charge for the period | 144 | 676 |
(overprovision) for current tax of prior periods | (100) | - |
Deferred tax | 213 | 159 |
Total tax charge for the period | 257 | 835 |
8. INTERIM DIVIDENDS
The Board has resolved not to declare any interim dividend for the six months ended 31 December 2020 (six months ended 31 December 2019: nil).
9. EARNINGS PER SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY
The calculation of the basic earnings per share amount is based on the profit for the Reporting Period attributable to owners of the Company of AUD$912,000 (six months ended 31 December 2019: AUD$1,944,000) and the weighted average number of ordinary shares of 2,446,003,000 (six months ended 31 December 2019: 2,524,956,000) in issue during the Reporting Period.
The calculation of the diluted earnings per share amount is based on the profit for the Reporting Period attributable to owners of the Company. The weighted average number of shares used in the calculation is the number of shares in issue during the Reporting Period, as used in the basic earnings per share calculation, and the weighted average number of shares assumed to have been issued at no consideration on the deemed exercise or conversion of all dilutive potential shares into shares during the Reporting Period.
The calculations of basic and diluted earnings per share are based on:
Six months ended 31 December
2019 (unaudited) AUD$' 000
Earnings
Profit attributable to owners of the Company
1,944
Number of shares 2020
2019
(unaudited)
Ordinary shares ' 000
Shares
Weighted average number of shares in issue used in the basic earnings per share calculation taking into account the share subdivision
2,524,956
Effect of dilution - weighted average number of shares:
Performance rights
122,980 2,647,936
36 TOP EDUCATION GROUP LTD • 2021 INTERIM REPORT
10. PROPERTY, PLANT AND EQUIPMENT
During the six months ended 31 December 2020, the Group acquired assets with a cost of AUD$3,948,000 (six months ended 31 December 2019: AUD$459,000) as additions to property, plant and equipment.
11. TRADE RECEIVABLES
The Group's students are required to pay tuition fees in advance for upcoming semesters. The outstanding receivables represent amounts related to students who have applied for the delayed payment of tuition fee. There is no fixed term for delayed payments. The Group seeks to maintain strict control over its outstanding receivables to minimise credit risk. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and that the Group's trade receivables relate to a large number of students, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade receivables are non-interest-bearing.
An aging analysis of the trade receivables as at the end of the Reporting Period, based on the transaction date is as follows:
31 December | 30 June | |
2020 | 2020 | |
(unaudited) | (audited) | |
AUD$' 000 | AUD$' 000 | |
Trade receivables (neither past due nor impaired) | 137 | 229 |
within 1 month | - | - |
Within 1 year | 137 | 229 |
12. PREPAYMENTS, OTHER RECEIVABLES AND OTHER ASSETS
31 December | 30 June | |
2020 | 2020 | |
(unaudited) | (audited) | |
AUD$' 000 | AUD$' 000 | |
Non-current assets | ||
Prepayments | 1,205 | 1,227 |
Lease deposits | 203 | 366 |
1,408 | 1,593 | |
Current assets | ||
Prepayments | 1,187 | 1,100 |
Long term deposit | 841 | 535 |
Other assets | 371 | 410 |
Other receivables | 1,255 | 1,050 |
3,654 | 3,095 |
None of the above assets are either past due or impaired. The financial assets included in the above balances relate to amounts for which there was no recent history of default.
13. TRADE PAYABLES
An ageing analysis of the trade payables as at the end of the Reporting Period, based on the payment due date, is as follows:
Over two months
30 June 2020
(audited) AUD$' 000
1,951
14. OTHER PAYABLES AND ACCRUALS
31 December | 30 June | |
2020 | 2020 | |
(unaudited) | (audited) | |
AUD$' 000 | AUD$' 000 | |
Current liabilities | ||
Other payables | 1,483 | 1,751 |
Unpaid leave obligations | 1,584 | 1,394 |
Other payables and accruals | 3,067 | 3,145 |
Non-current liabilities | ||
Other payables | - | 543 |
Unpaid leave obligations | 199 | 185 |
Accruals for reinstatement cost | 147 | 110 |
Other payables and accruals | 346 | 838 |
Other payables and accruals for reinstatement cost are unsecured, interest-free and have no fixed terms of repayment.
15. CONTRACT LIABILITIES
Details of contract liabilities balance are as follows:
31 December | 30 June | |
2020 | 2020 | |
(unaudited) | (audited) | |
AUD$' 000 | AUD$' 000 | |
Short-term advances received from students | ||
Course fees | 2,396 | 1,896 |
Contract liabilities include short-term advances received from students in relation to the proportionate service not yet provided. The Group receives tuition fees from students in advance prior to the beginning of each academic term. Tuition fees are recognised proportionately over the relevant period of the applicable program.
16. SHARE CAPITAL
Shares
Issued and fully paid: 2,436,150,000 (30 June 2020: 2,468,478,000) ordinary sharesAt 30 June 2020 (audited)
Shares held for share-based payments
At 31 December 2020
A summary of movements in the Company's share capital is as follows: At 1 July 2020 (audited)
Issue of new shares upon exercise of the pre-IPO rights Cancellation of shares
During the six months ended 31 December 2020, the Trust acquired nil shares.
31 December | 30 June |
2020 | 2020 |
(unaudited) | (audited) |
AUD$' 000 | AUD$' 000 |
36,491 | 38,371 |
Number of | |
shares | Total |
AUD$' 000 | |
38,820,000 | 2,236 |
- | - |
38,820,000 | 2,236 |
Share | |
capital | |
AUD$' 000 | |
38,371 | |
133 | |
(2,013) | |
36,491 |
Treasury shares
At 31 December 2020 (unaudited)
A summary of movements in the Group's share capital is as follows:
Number of shares in issue (in thousands)
2,468,478 3,062 (35,390)
2,436,150
17. SHARE-BASED PAYMENTS
The Group has adopted three share schemes, namely Pre-IPO Performance Rights Plan, Share Option Scheme and Share Award Scheme, for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group's operations. Eligible participants of the Schemes include the Group's employee, director or member of the Council of one or more members of the Company and its subsidiaries selected by the Board of Directors in its absolute discretion to participate in the Scheme.
Pre-IPO Performance Rights Plan
The Pre-IPO Scheme (the "Scheme") was adopted under written resolutions of the Board of Directors passed on 8 June 2017. As at 31 December 2019, 60,160 performance rights had been granted to the CEO of the Company under this plan. The Group has on 20 April 2018 granted an additional 11,481 performance rights under the Pre-IPO Performance Rights Plan to certain members of the Council and certain Directors, including (i) Mr. Jing Li, being our former non-executive Director; and (ii) Professor Brian James Stoddart and Professor Steven Schwartz, being our independent non-executive Directors and members of the Council. The shareholding of each of Professor Brian James Stoddart and Professor Steven Schwartz in the Group will not be more than 1% of the enlarged share capital of the Group upon completion of the Global Offering assuming that their performance rights above are fully vested.
The maximum aggregate number of shares underlying all grants of performance rights pursuant to the Pre-IPO Performance Rights Plan is 143,282,000 shares, assuming the total of 71,641 performance rights granted under the Pre-IPO Performance Rights Plan are fully vested after the completion of the share split, which would incur a dilution of approximately 5.5% of the shareholding of the Shareholders immediately following the Listing. No further performance rights will be granted under the Pre-IPO Performance Rights Plan on or after the date of the Listing.
CEO's performance rights plan
The CEO's performance rights plan became effective in June 2017 and, unless otherwise cancelled or amended, will remain in force for 15 years from that date.
Performance rights granted to the CEO of the Company are subject to approval in advance by the directors. Provided that the CEO remains employed until the later of the fifth anniversary of the grant of the performance rights and a liquidity event (defined as a listing, a business sale or a share sale in the plan rules), the performance rights will vest.
There is no exercise price payable by the CEO. Performance rights do not confer rights on the holders to dividends or to vote at shareholders' meetings.
17. SHARE-BASED PAYMENTS (Continued)
Pre-IPO Performance Rights Plan (Continued)
CEO's performance rights plan (Continued)
The details of the CEO's performance rights granted are shown below:
- | |
Vesting condition | 5-year service and a liquidity event |
Vesting period | 8 June 2017 to 7 June 2022 |
Expiry date |
Exercise price
7 June 2032
Certain Council and Board members' performance rights plan (the "Council and Board members' performance rights plan")
The Council and Board members performance rights plan became effective in April 2018 and, unless otherwise cancelled or amended, will remain in force for 15 years from that date.
Provided that the participants remain a council member or non-executive director of the Company and the Company has not taken steps to remove them from that role on the applicable vesting dates (the first being within 6 months, on 12 November 2018) and the listing of the Company, the performance rights will vest.
There is no exercise price payable by the participants. Performance rights do not confer rights on the holders to dividends or to vote at shareholders' meetings.
The details of the performance rights granted are shown below:
Exercise price | - |
Vesting condition | Remained employment of the same role and the Listing |
Dates of vesting | 12 November 2018, 33% of award |
12 November 2019, 33% of award | |
12 November 2020, 33% of award | |
Expiry date |
19 April 2033
17. SHARE-BASED PAYMENTS (Continued)
Pre-IPO Performance Rights Plan (Continued)
Certain Council and Board members' performance rights plan (the "Council and Board members' performance rights plan") (Continued)
The following shares were outstanding under the Scheme during the Period:
For the six month ended
2020 | 2019 | |||
Weighted | Weighted | |||
average | Number | average | Number | |
exercise price | of rights | exercise price | of rights | |
HK$ per share | HK$ per share | |||
At 1 July | - | 134,100,000 | - | 134,100,000 |
Granted during the period | - | - | - | - |
Lapsed | - | - | - | - |
Exercised | - | (3,062,000) | - | - |
At 31 December | - | 131,038,000 | - | 134,100,000 |
Weighted average exercise period | 15 years | 15 years | ||
Exercisable as at end of the period | 10,718,000 | 7,654,000 |
3,062,000 share options have been exercised, and no share option has been granted, cancelled or lapsed during the current reporting period.
Post-IPO Schemes
Share Option Scheme
The Share Option Scheme was adopted under written resolutions of the Board of Directors passed on 18 April 2018. On 18 July 2018, 25,781,938 ordinary shares had been granted to one director, one alternative director and a total of 40 employees of the Group under this plan, including (i) Ms. Sumeng Cao, being the Executive Director of the Company; and (ii) Ms. Rongning Xu, being the alternate Director to Dr. Minshen Zhu. The grant of the share options to Ms. Sumeng Cao would not result in the shares issued and to be issued upon exercise of all the share options already granted and to be granted to her, collectively in the 12-month period in aggregate over 0.1% of the shares in issue or having an aggregate value, based on the closing price of the shares at the date of grant, in excess of HK$5 million.
17. SHARE-BASED PAYMENTS (Continued)
Post-IPO Schemes (Continued)
Share Option Scheme (Continued)
The details of the performance rights granted are shown below:
Exercise price | HK$0.560 |
Vesting condition | Services of the employees |
Dates of vesting | 17 July 2019, 33% of award |
17 July 2020, 33% of award | |
17 July 2021, 33% of award | |
Expiry date |
17 July 2028
The following shares were outstanding under the Share Option Scheme during the reporting period:
For the six month ended
Weighted average exercise period Exercisable as at end of the period
At 31 December
At 1 July
Granted during the period Lapsed
Exercised
2020 | 2019 |
Weighted | |
Weighted | average |
exercise | Number |
price | of rights |
HK$ per share | |
0.56 | 25,781,938 |
- | - |
0.56 | (2,381,464) |
- | - |
0.56 | 23,400,474 |
10 years | |
7,800,158 |
17. SHARE-BASED PAYMENTS (Continued)
Post-IPO Schemes (Continued)
Share Award Scheme
The Share Award Scheme was adopted under written resolutions of the Board of Directors passed on 23 October 2018. The aggregate number of Shares awarded by the Board of Directors under the Scheme shall not exceed 1.5% of the total number of the issued shares as at the adoption date of the Share Award Scheme (the "Adoption Date"), being 38,828,220 Shares. On 28 February 2019, 12,000,000 awarded shares had been granted to one director and one alternate director of the Company under this plan for nil consideration, including (i) Ms. Sumeng Cao, being the Executive Director of the Company; and (ii) Ms. Rongning Xu, being the Alternate Director to Dr Minshen Zhu, an Executive Director and Vice President (Regulatory & Compliance). The 12,000,000 Awarded Shares represent 0.46% of the total number of issued Shares as at the Adoption Date.
On 24 May 2019, 19,000,000 awarded shares had been granted to four employees of the Group under this plan for nil consideration. The 19,000,000 awarded shares represent approximately 0.73% of the total number of issued Shares as at the Adoption Date. Based on the closing price of HK$0.265 per Share as quoted on the Stock Exchange on 24 May 2019 (being the date of the Grant), the aggregate market value of the awarded shares granted under the grant amounts to approximately HK$5.04 million.
The details of the performance rights granted are shown below:
Grant date Exercise price Vesting condition
28 February 2019 -
24 May 2019 -
Services of employees and remained employed for management positions
Services of employees and remained employed for management positions
Vesting period Expiry date
28 February 2019 to 27 February 2024
24 May 2019 to 23 May 2024
27 February 2029
23 May 2029
17. SHARE-BASED PAYMENTS (Continued)
Post-IPO Schemes (Continued)
Share Award Scheme (Continued)
The following shares were outstanding under the Share Award Scheme during the reporting period:
exercise price | Number | exercise price | Number | |
AUD$ & | of rights | AUD$ & | of rights | |
HK$ per share | HK$ per share | |||
At 1 July | - | 31,000,000 | - | - |
Granted during the year | - | - | - | 31,000,000 |
Forfeited | - | - | - | - |
Exercised | - | - | - | - |
At 30 June | - | 31,000,000 | - | 31,000,000 |
Weighted average exercise period | 10 years | 10 years | ||
Exercisable as at end of the year | - | - |
2020 | 2019 |
Weighted | Weighted |
average | average |
The fair value of the share-based payments in relation to the Scheme is calculated as the total value of the ordinary shares in the Group less the present value of the projected dividends over the expected term of the awards. The fair value of the CEO's performance rights as at the measurement date is AUD$2,298,000 and the fair value of the Certain Council and Board members' performance rights as at the measurement date is AUD$800,000. The following table lists the inputs to the model used for the Scheme:
2018
Adjusted total value of the ordinary shares of the Company (AUD$' 000)
Present value of the projected dividends (AUD$' 000)
89,914 - 120,920 12,849 - 120,920
17. SHARE-BASED PAYMENTS (Continued)
Post-IPO Schemes (Continued)
Share Award Scheme (Continued)
The fair value of the share-based payments in relation to the Share Option Scheme was estimated as at the date of grant using Black-Scholes model. The fair value of the Share Option Scheme as at the measurement date is AUD$843,000. The following table lists the inputs to the model used for the Share Option Scheme:
2019
Dividend yield (%) | 1.41% |
Expected volatility (%) | 50 - 60 |
Risk-free interest rate (%) | 2.08 |
Expected life of options (year) | 3.8 |
Weighted average share price (HK$ per share) | 0.54 |
The fair value of the share-based payments in relation to the Share Award Scheme is calculated as the value of the ordinary shares in the Group less the present value of the projected dividends over the expected term of the awards. The fair value of the Share Award Scheme as at the measurement date is AUD$1,633,000. The following table lists the inputs to the model used for the Share Award Scheme:
2019
Adjusted value of the ordinary shares of the Company per share (AUD$)
Present value of the projected dividends per share (AUD$)
0.049 - 0.065 0.002
The expected life of the performance rights is based on the historical data over the past years and is not necessarily indicative of the exercise patterns that may occur. No other feature of the performance rights granted was incorporated into the measurement of fair value.
The Group recognised share-based payments of AUD$482,000 (for the six months ended 31 December 2019:
AUD$578,000) during the six months ended 31 December 2020.
As at 31 December 2020, the Group had 182,539,300 shares outstanding under the various schemes mentioned above. The exercise in full of the outstanding performance rights would, under the present capital structure of the Group, result in the issue of 151,539,300 additional ordinary shares of the Group.
31 December 2020
18. COMMITMENTS
Except of the contingent considerations relates to the acquisition of SCOTS (refer to note 20), at the end of the Reporting Period, the Group did not have any other significant commitments.
The Group noticed that the recent decision of the Full Court of the Federal Court in WorkPac Pty Ltd v Rossato (2020)FCAFC 84 has changed the previous understanding of when an employee is genuinely casual and expanded on the set-off of casual loading with entitlements under the Fair Work Regulations. The Full Federal Court held that an employee engaged with an advance commitment to stable and predictable days and hours of work was entitled to annual leave, personal (sick and carer's leave), compassionate leave and public holidays as prescribed in the National Employment Standards (NES) of the Fair Work Act 2009 (Cth) (FW Act) even if they have been paid a casual loading. This decision may have impact on all employers who engage casual employees in Australia. As it is likely the decision will be appealed to the High Court, the Group will continue to monitor the situation closely. A preliminary assessment has been conducted by the Group and the result shows that the decision of the case is unlikely to have significant impacts on the Group's financial performance.
19. RELATED PARTY TRANSACTIONS
(a) In addition to the transactions, arrangements and balances detailed elsewhere in the interim condensed consolidated financial statements, the Group had the following transaction with a related party during the Period:
During the six months ended 31 December 2020, the Group used AUD$108,994 (six months ended 31 December 2019: AUD$239,047) of the service allowance from PwC Australia.
(b) Compensation of key management personnel of the Group:
Six months ended 31 December
2020 | 2019 | |
(unaudited) | (unaudited) | |
AUD$' 000 | AUD$' 000 | |
Fees | 436 | 432 |
Other emoluments: | ||
Salaries | 232 | 247 |
Share-based payment | 269 | 272 |
Pension scheme contributions | 69 | 49 |
570 | 568 | |
1,006 | 1,000 |
19. RELATED PARTY TRANSACTIONS (Continued)
(a)Outstanding balances with a related party:
Amount due from a related party
SCOTS | ||
Amount due to a related party | ||
2020 | 2019 | |
(unaudited) | (unaudited) | |
AUD$' 000 | AUD$' 000 | |
SCOTS | 31 | - |
-
20. FINANCIAL INSTRUMENTS BY CATEGORY
Six months ended 31 December
2019 (unaudited) AUD$' 000
Six months ended 31 December
The carrying amounts of each of the categories of financial instruments as at the end of the Reporting Period are as follows:
31 December | 30 June | |
2020 | 2020 | |
(unaudited) | (audited) | |
AUD$' 000 | AUD$' 000 | |
Financial assets at amortised cost | ||
Trade receivables | 137 | 229 |
Financial assets included in deposits and other receivables | 2,230 | 1,392 |
Cash and cash equivalents | 29,830 | 34,416 |
32,197 | 36,037 | |
Financial liabilities at amortised cost | ||
Trade payables | 2,431 | 1,951 |
Financial liabilities included in other payables and accruals | 1,460 | 1,004 |
3,891 | 2,955 | |
Financial liabilities at fair value | ||
Contingent considerations on acquisition | 534 | 1,087 |
4,425 | 4,042 |
31 December 2020
21. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS
At the end of the Reporting Period, the carrying amounts of the Group's financial assets and financial liabilities reasonably approximated to their fair values.
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
The fair values of cash and cash equivalents, trade payables, financial assets included in prepayments, deposits and other receivables, and financial liabilities included in other payables and accruals approximate to their carrying amounts largely because the maturities are short term or there are no fixed terms of repayment of these instruments or the effect of discounting is not material.
22. EVENTS AFTER THE REPORTING PERIOD
In January 2021, the Group received approval of increasing 190 student capacity of regional campus in Hobart, Tasmania, which brings the total capacity in Hobart campus from 150 to 340.
23. APPROVAL OF THE INTERIM FINANCIAL STATEMENTS
The unaudited condensed consolidated interim financial statements were approved and authorised for issue by the Board of Directors on 25 February 2021.
50 TOP EDUCATION GROUP LTD • 2021 INTERIM REPORT
"Academic Board" | the academic board of our Institute |
"ACCA" | Association of Chartered and Certified Accountants |
"Alliance Agreement" | the alliance agreement dated 27 May 2016 entered into between the |
Company and PwC Australia | |
"AQF" | the Australian Qualifications Framework, which specifies the standards |
for educational qualifications in Australia | |
"ATP" | the Australian Technology Park |
"AUD$" | Australian dollars, the lawful currency of Australia |
"Audit Committee" | the audit committee of the Board |
"Australia" | the Commonwealth of Australia |
"award" | a qualification under levels 1 to 10 of the AQF |
"Awarded Share(s)" | such number of rights awarded by the Board to acquire Shares subject to |
the Share Award Scheme rules, where each Awarded Share represents | |
the right to acquire one Share | |
"Billion Glory" | Billion Glory Group Holdings Limited ΊඤණྠછٰϞࠢʮ̡, a company |
incorporated under the laws of Hong Kong with limited liability on 8 June | |
2016, which is wholly-owned by Mr. Yang | |
"Board" | the board of Directors |
"Business School" | Sydney City School of Business, as the name adopted for the Company's |
academic division covering higher education courses in the field of | |
Management and Commerce | |
"CAANZ" | Chartered Accountants Australia and New Zealand |
"CG Code" | the Corporate Governance Code contained in Appendix 14 to the Listing |
Rules | |
"China" or "PRC" | the People's Republic of China, which, for the purpose of this |
announcement and for geographical reference only, except where the | |
context requires, does not include Hong Kong, Macau and Taiwan |
"Companies Ordinance"
the Companies Ordinance (Chapter 622 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time
"Company", "Institute", "TOP", "we",
"us" or "our"
Top Education Group Ltd (ACN 098 139 176) ዦݲϓࢤ৷ණྠϞࠢʮ̡, a public company registered in New South Wales, Australia with limited liability on 2 October 2001 and trading as Top Education Institute
"Connected person(s)"
has the meaning ascribed to it under the Listing Rules
"Connected transaction(s)"
has the meaning ascribed to it under the Listing Rules
"controlling shareholder(s)"
has the meaning given to it in the Listing Rules and, unless the context otherwise requires, refers to the controlling shareholder(s) of our Company, being the Controlling Shareholders Group
"Controlling Shareholders Group"
collectively, Dr. Zhu, Mr. Yang, Tristar United, Mr. Lee, Mr. Wang and Billion Glory, being a group of six individuals and entities
"Corporations Act"
the Corporations Act 2001(Cth) of Australia, as amended, supplemented or otherwise modified from time to time, which is the principal legislation regulating companies in Australia
"Council"
Top Education Institute Council
"course"
a program of study that will confer an award upon completion
"CPA Australia"
CPA Australia Ltd
"CRICOS"
the Commonwealth Register of Institutions and Courses for Overseas Students
"Director(s)"
the director(s) of the Company
"Dr. Zhu"
Dr. Minshen Zhu ज़ઽ͡, an executive Director, the chairman of the Board, the chief executive officer and the appointed representative of the Controlling Shareholders Group
"EFTSL"
equivalent full-time student load, which is a measurement of student enrolment at an institution calculated by dividing the total number of units taken by students in a given year by the average number of units a single full-time student should take in a year
"ELICOS"
English Language Intensive Courses for Overseas Students
"Employee"
(a) any employee (including without limitation any executive Director) of the Company;
(b) any non-executive Director (including independent non-executive Directors);
(c) any member of the Council; and
(d) any consultant of the Company, excluding any employee who is resident in a place where the award of Awarded Shares and/or the vesting of Awarded Shares pursuant to the terms of the Scheme is not permitted under the laws or regulations of such place or where in the view of the Board or the Committee or the Trustee (as the case may be), compliance with applicable laws or regulations in such place makes it necessary or expedient to exclude such employee
"Group"
the Company, its subsidiaries and its consolidated affiliated entities from time to time
"higher education"
studies in pursuit of a qualification under levels 5 to 10 of the AQF, including a diploma, advanced diploma, associate degree, bachelor degree, graduate certificate, graduate diploma, master degree and doctoral degree
"Hong Kong"
the Hong Kong Special Administrative Region of the PRC
"Hong Kong dollars" or "HK$" or "HKD"
Hong Kong dollars, the lawful currency of Hong Kong
"IFRS"
International Financial Reporting Standards, as issued from time to time by the International Accounting Standards Board
"Independent Third Party(ies)"
person(s) or company(ies) which, to the best of our Directors' knowledge having made all due and careful enquiries, is/are not connected (within the meaning of the Listing Rules) with the Company
"INED"
the independent non-executive Directors
"JSJ List"
the list of recognised Australian universities and higher education providers issued by the Ministry of Education of China on the Jiaoyu Shewai Jianguan Xinxi Wang (ԃऒ္̮၍ڦࢹၣ)
"Law School"
Sydney City School of Law, as the name adopted for the Company to provide degree courses in law
"Listing"
the listing of our Shares on the Main Board of the Stock Exchange
"Listing Rules"
the Rules Governing the Listing of Securities on the Stock Exchange, as amended, supplemented or otherwise modified from time to time
"Loyal Creation"
Loyal Creation Investment Ltd, a company incorporated under the laws of Hong Kong with limited liability on 30 October 2015, and is a Shareholder
"Main Board"
the stock exchange (excluding the option market) operated by the Stock Exchange which is independent from and operated in parallel with GEM of the Stock Exchange
"Minsheng Development"
Minsheng Education Development Company Limited, a direct wholly-owned subsidiary of Minsheng Education Group Company Limited.
"Minsheng Education Group"
Minsheng Education Group Company Limited (͏͛ԃණྠϞࠢʮ̡, an exempted company incorporated in the Cayman Islands with limited liability on 13 December 2005, listed on the Main Board of the Stock Exchange on 22 March 2017 with Stock Code 1569.
"Model Code"
Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 to the Listing Rules
"Mr. Lee"
Amen Kwai Ping Lee ҽ࣭̻, a non-executive Director and one of the members of the Controlling Shareholders Group
"Mr. Liu"
Chaohui Liu ᄎಃฯ, a Shareholder
"Mr. Wang"
Xin Wang ˮอ, one of the members of the Controlling Shareholders Group
"Mr. Yang"
Qingquan Yang เݰ, one of the members of the Controlling Shareholders Group
"NEAS"
the National English Language Teaching (ELT) Accreditation Scheme, which is the global leader in quality assurance for ELT community
"Nomination Committee"
the nomination committee of the Board
"NSW LPAB"
the Legal Profession Admission Board, New South Wales
"OCSC List"
the list of recognised Australian universities and higher education institutes published by the Office of the Civil Service Commission, Thailand
"pathway program"
a program by which students who complete certain required studies at one institution may become eligible to transfer to another institution to continue their studies and receive credit for work completed
"Pre-IPO Performance Right(s)"
a performance right under the Pre-IPO Performance Rights Plan
"Pre-IPO Performance Rights Plan"
the pre-IPO performance rights plan conditionally adopted by the Board on 8 June 2017, a summary of the principal terms of which is set out in the section headed "Appendix IV − E. Pre-IPO Performance Rights Plan" in the prospectus issued on 27 April 2018
"Prospectus"
the prospectus of the Company dated 27 April 2018
"PwC Australia"
The Australian partnership of PricewaterhouseCoopers (ABN 52 780 433 757), Australia, a member of the global network of PricewaterhouseCoopers firms, each of which is a separate and independent legal entity
"PwC Nominees"
PricewaterhouseCoopers Nominees (A.C.T.) Pty Ltd (ACN 008 474 397), a company registered in Australian Capital Territory, Australia with limited liability on 29 August 1969, which is owned as to 50% by PricewaterhouseCoopers Nominees (N.S.W.) Pty Ltd and 50% by PricewaterhouseCoopers Nominees (Victoria) Pty Ltd, a Shareholder
"Remuneration Committee"
the remuneration committee of the Board
"Reporting Period"
the period from 1 July 2020 to 31 December 2020
"SAA"
Self-Accrediting Authority
"SCDP"
the Student Career Development Program
"Securities and Futures Ordinance" or
"SFO"
Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
"Share(s)"
share(s) in the capital of the Company
"Share Award Scheme"
the post-IPO share award scheme conditionally adopted by the Company on 23 October 2018, the principal terms of which are set out in the announcement dated 23 October 2018
"Share Option Scheme"
the post-IPO share option scheme conditionally adopted by the Company on 18 April 2018, the principal terms of which are set out in the section headed "Appendix IV − F. Share Option Scheme" in the Prospectus
"share split"
a share split on 24 April 2018 pursuant to which each Share was subdivided and designated as 2,000 fully paid Shares in the capital of the Company
"Shareholder(s)"
holder(s) of the Share(s)
"Stock Exchange"
The Stock Exchange of Hong Kong Limited
"substantial shareholder"
has the meaning ascribed to it in the Listing Rules
"TEQSA"
the Tertiary Education Quality and Standards Agency in Australia established under the Tertiary Education Quality and Standards Agency Act 2011
"Tristar United"
Tristar United Investment Limited, a company incorporated under the laws of New Zealand with limited liability on 12 November 2001, and is a Shareholder
"Trust Deed"
a trust deed dated 23 October 2018 entered into between the Company and the Trustee (as restated, supplemented and amended from time to time)
"Trustee"
Pacific Custodians Pty Ltd (ACN 009 682 866) (which is independent of and not connected with the Company) and any additional or replacement trustees, being the trustee or trustees for the time being of the trusts declared in the Trust Deed
"US$" or "USD"
United States dollars, the lawful currency of the United States
"Xinjiang Guoli"
Xinjiang Guoli Minsheng Equity Investment Co., Ltd. (อᖛɢ͏ٰ͛ᛆ ҳ༟Ϟࠢʮ̡), a company established under the laws of the PRC with limited liability on 6 November 2000, and is a substantial Shareholder
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Top Education Group Ltd. published this content on 29 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2021 01:11:03 UTC.
