China Maple Leaf Educational Systems Limited - Interim / Quarterly Report 2015

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(Incorporated in the Cayman Islands with limited liability) Stock Code: 1317

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2015 INTERIM REPORT

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China Maple Leaf Educational Systems Limited 2015 Interim Report

002 Corporate Information

004 Financial and Operational Highlights
005 Management Discussion and Analysis
011 Other Information
021 Report on Review of Condensed Consolidated Financial Statements
023 Consolidated Statement of Profit or Loss and Other Comprehensive Income
024 Condensed Consolidated Statement of Financial Position
026 Condensed Consolidated Statement of Changes In Equity
027 Condensed Consolidated Statement of Cash Flows
028 Notes to the Condensed Consolidated Financial Statements
043 Definitions 048 Glossary

Corporate Information

BOARD OF DIRECTORS

COMPANY SECRETARY

Executive Directors

Mr. Shu Liang Sherman Jen (Chairman of the Board) Mr. Zhenwan Liu Ms. Jingxia Zhang Mr. James William Beeke

Ms. Wai Ling Chan

AUTHORIZED REPRESENTATIVES

Non-Executive Director

Ms. Jingxia Zhang Ms. Wai Ling Chan

Mr. Howard Robert Balloch

AUDITORS

Independent Non-Executive Directors

Mr. Peter Humphrey Owen Mr. Chak Kei Jack Wong Mr. Lap Tat Arthur Wong

AUDIT COMMITTEE

Deloitte Touche Tohmatsu Certified Public Accountants

COMPLIANCE ADVISER

Guotai Junan Capital Limited

Mr. Lap Tat Arthur Wong (Chairman) Mr. Peter Humphrey Owen Mr. Chak Kei Jack Wong

LEGAL ADVISERS

REMUNERATION COMMITTEE

As to Hong Kong Law and United States Law Skadden, Arps, Slate, Meagher & Flom

Mr. Peter Humphrey Owen (Chairman) Mr. Chak Kei Jack Wong Mr. Howard Robert Balloch

As to PRC Law Tian Yuan Law Firm

NOMINATION AND CORPORATE GOVERNANCE COMMITTEE

As to Cayman Islands Law Maples and Calder

REGISTERED OFFICE

Mr. Shu Liang Sherman Jen (Chairman) Mr. Peter Humphrey Owen Mr. Chak Kei Jack Wong

Maples Corporate Services Limited P.O. Box 309, Ugland House Grand Cayman, KY1-1104 Cayman Islands

China Maple Leaf Educational Systems Limited

Corporate Information

HEADQUARTERS AND PRINCIPAL PLACE OF BUSINESS IN CHINA

Maple Leaf Educational Park 6 Central Street Jinshitan National Tourist Area Dalian, Liaoning Province 116650 China

HONG KONG SHARE REGISTRAR

Tricor Investor Services Limited Level 22 Hopewell Centre 183 Queen’s Road East Hong Kong

STOCK CODE

PRINCIPAL PLACE OF BUSINESS IN HONG KONG REGISTERED UNDER PART 16 OF THE COMPANIES ORDINANCE

1317

COMPANY WEBSITE

www.mapleleaf.cn

Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

Maples Fund Services (Cayman) Limited PO Box 1093, Boundary Hall Cricket Square, Grand Cayman KY1-1102, Cayman Islands

2015 Interim Report 3

Financial and Operational Highlights

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Six months ended 28 February
2015 2014 Changes
RMB’000 RMB’000
(Unaudited) (Unaudited)
Revenue 300,022 242,924 23.5%
Gross profit 123,544 98,852 25.0%
Profit for the period 56,382 61,769 -8.7%
Adjusted net profit 63,211 49,878 26.7%
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Adjusted net profit was derived from the profit for the period excluding (i) change in fair value on redeemable convertible preferred shares; (ii) change in fair value of warrants; (iii) gain on cancellation of warrants; and (iv) expenses relating to the listing of the Company on the Stock Exchange, which are one-time loss/gain items we do not consider indicative of the performance of our business.

For the six months ended 28 February 2015, a total of approximately 15,140 students were enrolled in our nine school districts, namely Dalian, Wuhan, Tianjin, Chongqing, Zhenjiang, Ordos, Shanghai and Henan Luoyang and Pingdingshan, representing an increase of 2,234 students or approximately 17.3% compared to the enrollment for the corresponding period of 2014. Tuition fees and other revenues amounted to approximately RMB300.0 million, representing an increase of approximately RMB57.1 million or 23.5% as compared to the corresponding period of 2014. Our adjusted net profit amounted to RMB63.2 million, representing an increase of approximately RMB13.3 million or 26.7% as compared with RMB49.9 million for the corresponding period of 2014.

China Maple Leaf Educational Systems Limited

Management Discussion and Analysis

Business Review

We are the largest international high school operator and the largest international school operator in China, as measured by student enrollment at the end of the 2010/2011, 2011/2012, 2012/2013 and 2013/2014 school years. We operate all of our schools under our “Maple Leaf” brand and offer a bilingual preschool to grade 12 dual-diploma education with competitive tuition fees.

The core component of our business is a dual-curriculum and dual-diploma high school education that is unique among the top 10 international school operators in China as measured by student enrollment at the end of the 2013/2014 school year. It enables graduates of our high schools certified in both the PRC and BC to receive both a fully accredited BC high school diploma and a PRC high school diploma. We aspire to develop our students into well-rounded and academically excellent individuals that can function effectively in both Chinese and foreign environments.

We operate all of our schools under our “Maple Leaf” brand. An important element of our educational services is a bilingual learning environment. We design our classes according to the specific linguistic needs of the students at each grade level and build their English language skills as they progress from elementary school to middle school, with the aim of achieving English fluency by high school. In addition, as private schools, we have more flexibility in offering courses which are unavailable in public schools in response to popular student or parent demand. These courses, such as calligraphy, dance, debate and music, emphasize creativity, critical thinking and a deeper

appreciation of traditional Chinese and Western cultures. We also offer students the opportunity to participate in a variety of after-school programs and club events, including sports and life skills building projects that supplement classroom teaching.

During the six months ended 28 February 2015, the Group signed a Memorandum of Understanding (“MOU”) to acquire Jingzhou Yinghua Foreign Languages School, which currently offers grades 1–12. The school is well-established and has been operating for 17 years. It is located in a rural area of Jingzhou City in Hubei Province. The campus contains 30,000 square meters of buildings on 100 hectares of land. The Group’s overall student numbers will increase by approximately 1,000 students because of this acquisition. The existing school has the capacity for 1,500–1,800 students. The Group’s strategy is to phase-out the Jingzhou school’s current high school and continue with grades 1–9 only. Once the students graduate from grade 9, they will transit to our Wuhan Maple Leaf International School (High School) for the dual diploma program.

2015 Interim Report

Management Discussion and Analysis

In September 2014, the Group entered into a cooperation agreement with the Yiwu government to jointly develop bilingual schools on two campuses (one campus for a high school and a foreign school, the other for a middle school, an elementary school and a preschool) in Yiwu, Zhejiang. Under the agreement, with respect to the high school and foreign school, the Yiwu government will grant us the right to use the campus site and the school premises and obtain the requisite approvals, licenses and permits for us. Under the cooperation agreement, we are the sole sponsor of all of our Yiwu schools and will be in complete charge of the school operation. During the six months ended 28 February 2015, the Group attained the licenses and construction is underway with the opening of all four schools expected on 1 September 2015.

The Group views the remainder of the financial year ending on 31 August 2015 with great confidence. Operations proceeded smoothly for our new schools opened during the six months ended 28 February 2015, namely Pingdingshan Maple Leaf International School (Preschool, Elementary school and Middle school), Shanghai Maple Leaf International School (Middle school), Tianjin Huayuan Maple Leaf International School (Elementary school and Middle school), and Chongqing Maple Leaf International School (Elementary School). We anticipate healthy growth in student enrolments and revenues for the Group in the year ending 31 August 2015.

There has been no material change in respect of any other matters since the publication of the Company’s 2014 Annual Report.

Financial Review

1. Overview

For the six months ended 28 February 2015, we recorded a revenue of RMB300.0 million and a gross profit of RMB123.5 million. Our gross profit margin remained stable at 41.2% for the six months ended 28 February 2015 as compared with 40.7% for the corresponding period in 2014. Our adjusted net profit is increased by RMB13.3 million or approximately 26.7% to RMB63.2 million from RMB49.9 million in the corresponding period of 2014. Our adjusted net profit margin remained stable at 21.1% for the six months ended 28 February 2015 as compared with 20.5% for the corresponding period in 2014.

2. Revenue

For the six months ended 28 February 2015, revenue of the Group amounted to RMB300.0 million, representing an increase of RMB57.1 million or 23.5% as compared with RMB242.9 million for the corresponding period of 2014. The increase was primarily the result of revenue from tuition fees increasing by 18.5% from RMB225.1 million for the six months ended 28 February 2014 to RMB266.8 million for the corresponding period of 2015, primarily due to an increase in student enrollment and opening of new schools. Our student enrollment increased by 17.3% from approximately 12,906 as of 28 February 2014 to approximately 15,140 as of 28 February 2015.

China Maple Leaf Educational Systems Limited

Management Discussion and Analysis

Revenue from other items (including fees from overseas studies consulting services and summer and winter vacation activities provided to students, fees from renting educational books and sales of educational materials to students) amounted to RMB33.3 million for the six months ended 28 February 2015 representing an increase of RMB15.5 million or 87.1% as compared with RMB17.8 million for the corresponding period of 2014. The increases were primarily driven by an increase in revenue generated from our winter vacation activities.

3. Cost of Revenue and Gross Profit Margin

for the corresponding period of 2014. This was primarily due to gain on disposal of available-for-sale investments.

6. Marketing Expenses

For the six months ended 28 February 2015, marketing expenses of the Group amounted to RMB9.3 million, representing an increase of RMB0.4 million or 4.5% from RMB8.9 million over the corresponding period of 2014. There were no material changes to selling and marketing activities during the period.

For the six months ended 28 February 2015, cost of revenue of the Group amounted to RMB176.5 million, representing an increase of RMB32.4 million or 22.5% as compared with RMB144.1 million for the corresponding period of 2014, primarily due to an increase in staff costs of 23.0% from RMB89.5 million for the six months ended 28 February 2014 to RMB110.1 million for the corresponding period of 2015. Our gross profit margins remained stable and were 41.2% and 40.7% for the six months ended 28 February 2015 and 2014 respectively.

7. Administrative Expenses

For the six months ended 28 February 2015, administrative expenses of the Group amounted to RMB49.6 million, representing an increase of RMB18.4 million or 59.0% as compared with RMB31.2 million for the corresponding period of 2014. The increase was primarily due to increasing staff costs.

8. Finance Costs

4. Investment and Other Income

For the six months ended 28 February 2015, investment and other income of the Group amounted to RMB6.9 million, representing an increase of RMB3.7 million or 115.6% as compared with RMB3.2 million for the corresponding period of 2014. This was primarily due to interest income generated from time deposit of IPO proceeds.

5. Other Income, Gains and Losses

For the six months ended 28 February 2015, other income, gains and losses of the Group amounted to RMB1.2 million as compared with RMB0.002 million

Finance costs decreased by 51.2% from RMB8.4 million for the six months ended 28 February 2014 to RMB4.1 million for the corresponding period of 2015 because our bank interest expenses decreased significantly due to the payback of bank loans with IPO proceeds.

9. Other Expenses

Other expenses increased by 82.5% from RMB4.0 million for the six months ended 28 February 2014 to RMB7.3 million for the corresponding period of 2015, mainly attributable to expenses related to the offering and listing of the Shares of the Company on the Stock Exchange.

2015 Interim Report

Management Discussion and Analysis

10. Changes in Fair Value on Redeemable Convertible Preferred Shares

Loss recognized in our consolidated statements of comprehensive income from change in fair value on redeemable convertible Preferred Shares decreased by 98.8% from RMB23.7 million for the six months ended 28 February 2014 to RMB0.28 million for the corresponding period in 2015, as a result of the conversion of all the Preferred Shares to ordinary Shares on 28 November 2014.

11. Changes in Fair Value on Warrants/Gain on Cancellation of Warrants

We recognized a loss of RMB3.7 million in our consolidated statements of comprehensive income from change in fair value on warrants for the six months ended 28 February 2014, compared to nil for the corresponding period in 2015 as the Series A warrants were cancelled on 15 January 2014. We recognized a one-time gain on the cancelation of warrants in the amount of RMB42.5 million for the six months ended 28 February 2014.

12. Profit before Income Tax

As a result of the foregoing, we recognized a profit of RMB61.1 million before income tax for the six months ended 28 February 2015, compared to a profit of RMB64.7 million before income tax for the corresponding period in 2014. Our profit before income tax as a percentage of revenue was 20.4%.

13. Taxation

For the six months ended 28 February 2015, income tax expense of the Group amounted to RMB4.7 million as compared with RMB2.9 million for the corresponding period of 2014. The increase was

mainly due to the increase of profit before tax of the PRC entities and schools (for the six months ended 28 February 2014: RMB50.9 million and for the six months ended 28 February 2015: RMB74.4 million).

14. Profit for the Period

As a result of the above factors, we recorded a profit of RMB56.4 million for the six months ended 28 February 2015, representing a decrease of RMB5.4 million from the corresponding period of 2014. Our profit margin for the six months ended 28 February 2015 was 18.8%, compared to 25.4% for the corresponding period of 2014. The decreases are mainly because the profit and profit margin for the six months ended 28 February 2014 was significantly boosted by a one-time gain of RMB42.5 million we recognized for the cancellation of warrants on 15 January 2014.

15. Adjusted Net Profit

To supplement our condensed consolidated financial statements which are presented in accordance with the International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”), we also use adjusted net profit as an additional financial measure to evaluate our financial performance by eliminating the impact of one-time loss/gain items that we do not consider indicative of the performance of our business.

For the six months ended 28 February 2015, our adjusted net profit amounted to RMB63.2 million, representing an increase of approximately RMB13.3 million or 26.7% as compared with RMB49.9 million for the corresponding period of 2014. The increase was primarily due to the significant increase in revenue and relatively stable level of cost of revenue. Our

China Maple Leaf Educational Systems Limited

Management Discussion and Analysis

adjusted net profit for the six months ended 28 February 2015 and 2014 were derived from our profit for the period in the following way:

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Six months ended 28 February
2015 2014
RMB’000 RMB’000
(Unaudited) (Unaudited)
Profit for the period 56,382 61,769
Adjustment for change in fair value on redeemable
convertible preferred shares 277 23,692
—
Adjustment for change in fair value on warrants 3,695
—
Adjustment for gain on cancellation of warrants (42,510)
Adjustment for listing-related expenses 6,552 3,232
Adjusted net profit 63,211 49,878
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16. Other Comprehensive (Expense) Income for the Period

We recognized other comprehensive expense of RMB1.2 million for the six months ended 28 February 2015, compared to other comprehensive income of RMB0.13 million for the corresponding period in 2014. This is primarily due to reclassification adjustment for the accumulative gain included in profit or loss upon disposal of available-for-sale investments and exchange difference arising on the translation of foreign operation.

17. Liquidity and Source of Funding and

of which RMB283.3 million was deferred revenue and RMB158.8 million was other payables and accrued expenses. As of 28 February 2015, the current ratio (the current assets to current liabilities ratio) of the Group was 1.59 as compared with 0.59 as of 31 August 2014.

The Group does not have any bank borrowings and other debt financing obligations as of 28 February 2015 or the date of this interim results announcement and does not have any breaches of finance covenants. The Group intends to finance the expansion, investments and business operations with internal resources.

Borrowing

18. Gearing Ratio

As of 28 February 2015, the Group’s total bank balances and cash increased by 112.9% from RMB380.3 million as of 31 August 2014 to RMB809.5 million. The significant increase of total bank balances and cash for the period primarily resulted from disposal of available-for-sale investments and the net proceeds raised by the initial public offering.

As of 28 February 2015, the current assets of the Group amounted to RMB900.1 million, including RMB809.5 million in bank balances and cash and other current assets of RMB90.6 million. Current liabilities of the Group amounted to RMB565.0 million,

As of 28 February 2015, the gearing ratio of the Group, which was calculated as total borrowings divided by total equity, was approximately 0%, representing a decrease of 47.8 percentage point as compared with 47.8% as of 31 August 2014. The decrease was primarily due to payback of bank loans with the IPO proceeds.

19. Material Investments

The Group did not make any material investments during the six months ended 28 February 2015.

2015 Interim Report

Management Discussion and Analysis

20. Material Acquisitions and Disposals

23. Foreign Exchange Exposure

During the six months ended 28 February 2015, the Group signed a MOU to acquire Jingzhou Yinghua Foreign Languages School located in a rural area of Jingzhou City in Hubei Province. The campus contains 30,000 square meters of buildings on 100 hectares of land. The private school currently offers grades 1–12 with a student population of 1,090. The existing school has the capacity for 1,500–1,800 students. Please see the section headed “Business Review” for more information. This transaction does not constitute a notifiable transaction under the Listing Rules.

During the six months ended 28 February 2015, the Group mainly operated in China and majority of the transactions were settled in RMB, the Company’s primary subsidiaries’ functional currency. As of 28 February 2015, except for the bank deposits denominated in foreign currencies, the Group did not have significant foreign currency exposure from its operations.

24. Employee’s Remuneration and Policy

21. Pledge of Assets

As at 28 February 2015, the Group had pledged its buildings with an aggregate carrying value of RMB120.3 million (2014: RMB123.9 million), to secure for general banking facilities granted to the subsidiaries of the Company. The banking facilities have been settled as of 28 February 2015 and the Group is in the process of releasing the relevant pledge.

The Group’s buildings are situated on land in the PRC held by the Group under medium-term lease.

As at 28 February 2015, the Group had pledged its land use rights with an aggregate carrying value of RMB24.0 million (2014: RMB24.3 million) to banks to secure the credit facilities granted to the Group. The credit facilities have been settled as of 28 February 2015 and the Group is in the process of releasing the relevant pledge.

22. Contingent Liabilities

As at 28 February 2015, the Group had approximately 2,736 full-time equivalent employees. The total remuneration expenses, excluding share-based compensation expense, for the six months ended 28 February 2015 was RMB141.7 million, representing an increase of 31.9% as compared with that of the corresponding period in the previous year.

We provide external and internal training programs to our employees. We participate in various employee benefit plans, including housing pension, medical, basic pension and unemployment benefit plans, occupational injury and maternity leave insurance. The Company also has a provident fund, the Pre-IPO Share Option Scheme, the Post-IPO Share Option Scheme and a Restricted Share Units Scheme set up for its employees. The details of the relevant schemes are set out in the prospectus of the Company dated 18 November 2014 and the annual report for the year ended 31 August 2014.

The Group had no material contingent liabilities as of 28 February 2015.

Accordingly, the Group’s share-based compensation expense for the six months ended 28 February 2015 amounted to RMB5.7 million, as compared with nil for the corresponding period of 2014.

China Maple Leaf Educational Systems Limited

Other Information

Interim Dividend

On 28 April 2015, the Board declared an interim dividend of HK$0.025 per share for the six months ended 28 February 2015, payable to Shareholders whose names appear on the register of members of the Company at the close of business on 18 May 2015. The interim dividend will be distributed to shareholders on 29 May 2015.

Directors’ and Chief Executives’ Interests and Short Positions in the Shares, Underlying Shares and Debentures

As at 28 February 2015, the interests or short positions of the Directors or chief executives of the Company in the Shares, underlying Shares and debentures of the Company or its associated corporations within the meaning of Part XV of the SFO required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest and/or short positions which they were taken or deemed to have under such provisions of the SFO) or which would be required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which would be required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange were as follows:

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Number of Approximate
Name of Director/ Name of Capacity/ Underlying percentage of
Chief Executive Company Nature of Interest Shares [(1)] shareholding
Shu Liang Sherman Jen Sherman Interest of controlled 717,869,909 (L) [(2)] 53.81%
Investment corporation
Holdings Limited
Shu Liang Sherman Jen Company Beneficial interest 3,212,015 (L) [(3)] 0.24%
1,000,000 (L) [(4)] 0.08%
Zhenwan Liu Company Beneficial interest 1,606,007 (L) [(5)] 0.12%
Jingxia Zhang Company Beneficial interest 1,606,007 (L) [(6)] 0.12%
James William Beeke Company Beneficial interest 1,070,671 (L) [(7)] 0.08%
1,070,671 (L) [(8)] 0.08%
Peter Humphrey Owen Company Beneficial interest 1,070,671 (L) [(9)] 0.08%
Howard Robert Balloch Company Beneficial interest 1,070,671 (L) [(10)] 0.08%
30,000 (L) [(11)] 0.002%
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2015 Interim Report

Other Information

(1) The letter “L” denotes the person’s long position in the Shares.
(2) Sherman Investment Holdings Limited is a company incorporated in the BVI that is wholly-owned by Mr. Shu Liang Sherman Jen. Mr. Jen is taken to be interested in 717,869,909 Shares held by Sherman Investment.
(3) Mr. Shu Liang Sherman Jen is interested in the options granted pursuant to the Pre-IPO Share Option Scheme to subscribe for 3,212,015 Shares.
(4) Mr. Shu Liang Sherman Jen is interested in 1,000,000 Shares of the Company.
(5) Mr. Zhenwan Liu is interested in the options granted pursuant to the Pre-IPO Share Option Scheme to subscribe for 1,606,007 Shares.
(6) Ms. Jingxia Zhang is interested in the options granted pursuant to the Pre-IPO Share Option Scheme to subscribe for 1,606,007 Shares.
(7) Mr. James William Beeke is interested in 1,070,671 Shares of the Company.
(8) Mr. James William Beeke is interested in the options granted pursuant to the Pre-IPO Share Option Scheme to subscribe for 1,070,671 Shares.
(9) Mr. Peter Humphrey Owen is interested in the options granted pursuant to the Pre-IPO Share Option Scheme to subscribe for 1,070,671 Shares.
(10) Mr. Howard Robert Balloch is interested in the options granted pursuant to the Pre-IPO Share Option Scheme to subscribe for 1,070,671 Shares.
(11) Mr. Howard Robert Balloch is interested in 30,000 Shares of the Company.

Save as disclosed above, so far as known to any Director, as at 28 February 2015, none of the Directors or the chief executives of the Company or any of their associates had or was deemed to have any interests or short positions in the Shares, underlying Shares or debentures of the Company and its associated corporations as defined in Part XV of the SFO, which were (i) required to be recorded in the register required to be kept under section 352 of the SFO, or (ii) otherwise required to be notified by the Directors or chief executives to the Company and the Stock Exchange pursuant to the Model Code.

China Maple Leaf Educational Systems Limited

Other Information

Substantial Shareholders’ Interests and Short Positions in the Shares, Underlying Shares and Debentures

As at 28 February 2015, the persons or corporations who had interests or short positions in the Shares and underlying Shares of the Company or its associated corporations which were recorded in the register required to be kept under section 336 of the SFO were as follows:

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Approximate
Capacity/ Number of percentage of
Name of substantial shareholder Nature of Interest Shares Held [(1)] shareholding
Sherman Investment Holdings Limited [(2)] Registered owner 717,869,909 (L) 53.81%
Shu Liang Sherman Jen Interest of controlled 717,869,909 (L) [(3)] 53.81%
corporation
Shu Liang Sherman Jen Beneficial interest 3,212,015 (L) [(3)] 0.24%
1,000,000 (L) [(3)] 0.08%
Sequoia Capital China Growth Fund I, L.P. Registered owner 199,881,280 (L) 14.98%
(“SCC Growth”) [(4)]
Sequoia Capital China Growth Fund Interest of controlled 229,116,542 (L) [(10)] 17.18%
Management I, L.P. (“SCC Management”) [(5)] corporations
SC China Holding Limited (“SC China”) [(6)] Interest of controlled 229,116,542 (L) [(10)] 17.18%
corporations
SNP China Enterprises Limited (“SNP China”) [(7)] Interest of controlled 229,116,542 (L) [(10)] 17.18%
corporations
Sequoia Capital China Advisors Limited Investment manager 229,116,542 (L) [(10)] 17.18%
(“SCC Advisors”) [(8)]
Mr. Shen Nanpeng [(9)] Interest of controlled 229,116,542 (L) [(10)] 17.18%
corporations
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2015 Interim Report

Other Information

Notes:

(1) The letter “L” denotes long position in the Shares.
(2) Sherman Investment Holdings Limited is a company incorporated in the BVI, which is wholly-owned by Mr. Jen, and has a direct beneficial interest of 53.81% in the Company.
(3) Sherman Investment is wholly-owned by Mr. Shu Liang Sherman Jen, therefore Mr. Jen is deemed to be interested in all the Shares in which Sherman Investment is interested in by virtue of Part XV of the SFO. Mr. Jen is interested in 1,000,000 Shares of the Company and options granted pursuant to the Pre-IPO Share Option Scheme to subscribe for 3,212,015 Shares. Taking into account his interests in the Company held by Sherman Investment, he is deemed to be interested in the Company as to 54.13%.
(4) SCC Growth, a limited liability partnership incorporated in the Cayman Islands, is taken to be interested in 199,881,280 Shares which were converted from the 15,703,200 Preferred Shares.
(5) SCC Management is the general partner of SCC Growth, Sequoia Capital China Growth Partners Fund I, L.P. (“SCC Partners”) and Sequoia Capital China GF Principals Fund I, L.P. (“SCC Principals”). SCC Partners and SCC Principals own 4,719,798 Shares and 24,515,464 Shares, respectively. Accordingly SCC Management is deemed to be interested in 229,116,542 Shares, which are the total number of Shares collectively owned by SCC Growth, SCC Partners and SCC Principals by virtue of Part XV of the SFO.
(6) SC China is the general partner of SCC Management and is therefore deemed to be interested in all the Shares which SCC Management is interested in by virtue of Part XV of the SFO.
(7) SC China is wholly-owned by SNP China, therefore SNP China is deemed to be interested in all the Shares which SC China is interested in by virtue of Part XV of the SFO.
(8) SCC Advisors is the investment manager of SCC Management and is therefore deemed to be interested in all the Shares which SCC Management is interested in by virtue of Part XV of the SFO.
(9) Mr. Shen Nanpeng owns 100% of SNP China and is therefore deemed to be interested in all the Shares which SNP China is interested in by virtue of Part XV of the SFO.

Save as disclosed above, as at 28 February 2015, the Directors of the Company are not aware of any other person or corporation having an interest or short position in the Shares or underlying Shares of the Company or its associated corporations which would require to be recorded in the register required to be kept by the Company pursuant to Section 336 of Part XV of the SFO.

Share Incentive Schemes

In order to incentivize our Directors, senior management and other employees for their contribution to the Group and to attract and retain suitable personnel to our Group, we adopted the Pre-IPO Share Option Scheme on 1 April 2008 and conditionally adopted the Post-IPO Share Option Scheme and RSU Scheme on 10 November 2014.

Details on the movement of the relevant scheme for the six months ended 28 February 2015 is set out in note 15 to the financial statements.

1. Employee Pre-IPO Share Option Scheme

The Pre-IPO Share Option Scheme seeks to attract and retain the best available personnel, to provide additional incentives to employees, Directors and consultants of the Company and any Parent Corporate or Subsidiary Corporate (as defined in Section 424(e) and Section 424(f) of the US Inland Revenue Code of 1986, respectively) of the Company and any business, corporation, partnership, limited liability company or other entity in which the Company or a Parent Corporate or a Subsidiary Corporate of the Company holds a substantial ownership interest, directly or indirectly and to promote the success of the Company’s business.

(10) Such 229,116,542 Shares are of the same batch of shares.

China Maple Leaf Educational Systems Limited

Other Information

The table below shows details of the outstanding share options granted to all grantees under the Pre-IPO Share Option Scheme as of 28 February 2015. No options were granted between 28

February 2015 and the date of this interim report. For further details on the movement of the options during the Reporting Period please see note 15 to the financial statements.

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Number of
shares The period
Consideration underlying during which
Outstanding paid for the share options Exercise share options
Grantee share options Position share options granted Price Date of Grant Vesting Period are exercisable
Director
Jingxia Zhang 70,000 Executive Director, Nil 749,470 RMB0.93 September 1, 2008 Four years from 10 years after the
(張景霞) Senior Vice the date of grant date of grant
President and Co-
Chief Financial Officer
80,000 Nil 856,537 RMB0.93 June 2, 2014 None 10 years after the
date of grant
Shu Liang Sherman Jen 300,000 Executive Director, Nil 3,212,015 RMB0.93 June 2, 2014 None 10 years after the
(任書良) Chairman of the date of grant
Board and Co-Chief
Executive Officer
Zhenwan Liu 150,000 Executive Director, Nil 1,606,007 RMB0.93 June 2, 2014 None 10 years after the
(柳掁萬) President, Vice date of grant
Chairman of the
Board and Co-Chief
Executive Officer
James William Beeke 100,000 Executive Director, Nil 1,070,671 RMB0.93 June 2, 2014 None 10 years after the
Vice President date of grant
and BC program
Superintendent
Peter Humphrey Owen 100,000 Independent Nil 1,070,671 RMB0.93 June 2, 2014 None 10 years after the
non-executive date of grant
Director
Howard Robert 100,000 Non-Executive Nil 1,070,671 RMB0.93 June 2, 2014 None 10 years after the
Balloch Director date of grant
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2015 Interim Report

Other Information

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Number of
shares The period
Consideration underlying during which
Outstanding paid for the share options Exercise share options
Grantee share options Position share options granted Price Date of Grant Vesting Period are exercisable
Sutherland 30,000 Director Nil 321,202 RMB0.93 June 2, 2014 None 10 years after the
Colleen Dawn [(1)] date of grant
Senior Management
Linsheng Chen 70,000 Vice President and Nil 749,470 RMB0.93 September 1, 2008 Four years from 10 years after the
(陳林生) the Chinese Program the date of grant date of grant
Superintendent
30,000 Nil 321,202 RMB0.93 June 2, 2014 None 10 years after the
date of grant
Bin Xu 100,000 Vice President and Nil 1,070,671 RMB0.93 June 2, 2014 None 10 years after the
(徐斌) Co-Chief Financial date of grant
Officer
Xiaoduo Zhang 30,000 Director of the Nil 321,202 RMB0.93 June 2, 2014 None 10 years after the
(張小多) Marketing Department date of grant
Total 1,160,000 12,419,789
Other employees
26 employees 940,000 Nil 10,064,312 RMB0.93 September 1, 2008 Four years from 10 years after the
the date of grant date of grant
11 employees 160,000 Nil 1,713,074 RMB0.93 September 1, 2009 Four years from 10 years after the
the date of grant date of grant
8 employees 255,000 Nil 2,730,212 RMB0.93 June 2, 2014 None 10 years after the
date of grant
Total 1,355,000 14,057,598
TOTAL 2,515,000 26,927,387
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Note:

(1) Ms. Dawn ceased acting as a Director of the Company on 10 April 2014.

China Maple Leaf Educational Systems Limited

Other Information

2. Post-IPO Share Option Scheme

On 10 November 2014, the Board adopted the Post-IPO Share Option Scheme with the purpose of enabling our Group to grant Options to selected participants as incentives or rewards for their contributions to our Group. Our Directors consider the Post-IPO Share Option Scheme, with its broadened basis of participation, will enable our Group to reward our employees, our Directors and other selected participants for their contributions to our Group. Given that our Directors are entitled to determine the performance targets to be achieved as well as the minimum period that an Option must be held before an Option can be exercised on a case by case basis, and that the exercise price of an Option cannot in any event fall below the price stipulated in the Listing Rules or such higher price as may be fixed by our Directors, it is expected that grantees of an Option will make an effort to contribute to the development of our Group so as to bring about an increased market price of the Shares in order to capitalize on the benefits of the Options granted.

3. RSU Scheme

The Board has modified the RSU Scheme on 28 April 2015 to reflect: (i) share awards, instead of restricted share units, will be awarded to grantees and held by trustee(s) appointed under the Scheme for the benefit of the beneficiaries prior to vesting; (ii) consultants to the Group are eligible persons of the Scheme in addition to directors, executive officers, senior management and employees of the Group; (iii) vesting of the award shares is subject to continued employment of the grantees by the Group. The exceptions to such condition (i.e. death, disability, retirement and early retirement) no longer apply; and (iv) the existing vesting schedule ceases to apply and is replaced by a general power of the Board to determine the vesting schedule.

The grant of the share awards recognizes the contribution of the Directors, executive officers, senior managers, consultants and employees of the Company and of its subsidiaries and consolidated affiliated entities (collectively, “Scheme Companies” and each, a “Scheme Company”) to the historical achievements of the Company. The Company has the intention to continue exploring ways to incentivize, retain and reward Scheme Companies’ directors, executive officers, senior management, consultants and employees and may implement other share-based remuneration schemes in the future.

The Company has not issued any Shares under the RSU Scheme as at 28 February 2015.

Corporate Governance

The Company is committed to maintaining high corporate governance standards to safeguard the interests of Shareholders and to enhance corporate value and accountability.

The Company has applied the principles as set out in the Corporate Governance Code contained in Appendix 14 of the Listing Rules.

In the opinion of the Board, the Company has complied with all the applicable code provisions as set out in the Corporate Governance Code for the six months ended 28 February 2015, save and except for code provision A.2.1.

Code provision A.2.1 stipulates that the roles of chairman and chief executive should not be performed by the same individual.

2015 Interim Report

Other Information

Mr. Shu Liang Sherman Jen performs the dual roles of both chairman and co-chief executive officer (“Co-CEO”), along with the other Co-CEO, Mr. Zhenwan Liu. The Board believes that by vesting the roles of both chairman and CoCEO in Mr. Shu Liang Sherman Jen, along with the other Co-CEO, Mr. Zhenwan Liu, the Company derives the benefit of ensuring consistent leadership within our Group, which in turn enables more effective and efficient overall strategic planning for our Group. The Board considers that the balance of power and authority for the present arrangement will not be impaired and this structure will enable the Company to make and implement decisions promptly and effectively.

Model Code

The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules as its own securities dealing code to regulate all dealings by Directors and relevant employees of securities in the Company and other matters covered by the Model Code.

Specific enquiry has been made of all the Directors and the relevant employees and they have confirmed that they have complied with the Model Code throughout the six months ended 28 February 2015.

Sinopec International Petroleum Exploration and Production Corporation in 2014.

Mr. Lap Tat Arthur WONG

Appointment as an independent non-executive director of Sky Solar Holdings, Ltd., a company listed on the NASDAQ (stock code: SKYS) in 2014 and appointment as an independent non-executive director of Xueda Education Group, a company listed on the NYSE (stock code: XUE) in 2015.

Save for those disclosed above, there is no other information in respect of Directors required to be disclosed pursuant to Rule 13.51B(1) of the Main Board Listing Rules.

Directors’ Interest in a Competing Business

During the period under review, neither our Controlling Shareholders (as defined under the Listing Rules) nor any of our Directors were interested a business which competes, either directly or indirectly, with the Group’s business which needs to be disclosed pursuant to Rule 8.10 of the Listing Rules.

Audit Committee

Changes in Information of Directors

Changes in Director’s information of the Company subsequent to the publication of the 2014 Annual Report are set out below.

Mr. Howard Robert BALLOCH

Appointment as an independent director of Sinopec Canada, a non-public company and a business unit of

The Company has established an Audit Committee with written terms of reference in accordance with the Listing Rules. The primary duties of the Audit Committee are to assist the Board by providing an independent view of the effectiveness of the financial reporting process, internal control procedures and risk management system of the Group, overseeing the audit process and performing other duties and responsibilities as assigned by the Board. The Audit Committee comprises three members, namely, Mr. Lap Tat Arthur WONG, Mr. Peter Humphrey OWEN and

China Maple Leaf Educational Systems Limited

Other Information

Mr. Chak Kei Jack WONG, all Independent Non-Executive Directors of the Company. Mr. Lap Tat Arthur WONG is the chairman of the Audit Committee.

The Audit Committee has reviewed the unaudited consolidated financial statements of the Group for the six months ended 28 February 2015 and has met with the independent auditors, Deloitte Touche Tohmatsu, who have reviewed the interim financial statements in accordance with International Standard on Review Engagements 2410. The Audit Committee has also discussed matters with respect to the accounting policies and practices adopted by the Company and internal control with senior management members of the Company.

Other Board Committees

In addition to the Audit Committee, the Company has also established a Nomination and Corporate Governance Committee and a Remuneration Committee.

Purchase, Sale or Redemption of the Company’s Listed Securities

During the six months ended 28 February 2015, neither the Company nor any of its subsidiaries purchased, sold or redeemed any listed securities of the Company.

Material Litigation

As of 28 February 2015, the Company was not involved in any material litigation or arbitration. Nor were the Directors of the Company aware of any material litigation or claims that were pending or threatened against the Company.

Use of Proceeds from Global Offering

On 28 November 2014, the Shares of the Company were listed on the Main Board of the Stock Exchange. The proceeds the Company received on cash basis from the above global offering, after deducting underwriting fees for the listing were approximately HK$928.3 million. As at 28 February 2015, in addition to paying other expenses related to the listing and global offering and paying our bank loans, the Company has applied approximately RMB64.1 million towards the renovation of our existing schools and developing new schools. The Company has designated sufficient cash equivalent to the remaining of the IPO proceeds in its offshore and onshore deposit accounts to be used in proportion for the purposes set out in the section headed “Future Plans and Use of Proceeds — Use of Proceeds” in the prospectus issued by the Company on 18 November 2014.

Qualification Requirement

The foreign investor in a Sino-foreign joint venture school for PRC students at the preschool or high school level must be a foreign educational institution with relevant qualification and experience at the same level and in the same category of education (the “Qualification Requirement”). Foreign portion of the total investment in a sino-foreign joint venture private school should be below 50% and the establishment of these schools is subject to approval of education authorities at the provincial level. Please refer to the section headed “Contractual Arrangements” in the prospectus of the Company for our efforts and actions undertaken to comply with the Qualification Requirement. There has been no updates since the publication of the prospectus.

2015 Interim Report

Other Information

Our PRC Legal Counsel, Tian Yuan Law Firm has advised us there have not been changes in the relevant regulatory developments and guidance relating to the Qualification Requirement.

Continuing Disclosure Pursuant to Listing Rules 13.18 and 13.21

The Company does not have any other disclosure obligations under Rules 13.18 and 13.21 of the Listing Rules.

Appreciation

On behalf of the Board, I wish to express my gratitude to our management team and staff members for their hard work, dedication and support throughout the period.

On behalf of the Board

Shu Liang Sherman Jen

Chairman

Hong Kong, 28 April 2015

China Maple Leaf Educational Systems Limited

Report on Review of Condensed Consolidated Financial Statements

TO THE BOARD OF DIRECTORS OF CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

(incorporated in the Cayman Islands with limited liability)

Introduction

We have reviewed the condensed consolidated financial statements of China Maple Leaf Educational Systems Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”) set out on pages 23 to 42, which comprise the condensed consolidated statement of financial position as of 28 February 2015 and the related condensed consolidated statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the six-month period then ended, and certain explanatory notes. The Main Board Listing Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and International Accounting Standard 34 “Interim Financial Reporting” (“IAS 34”). The directors of the Company are responsible for the preparation and presentation of these condensed consolidated financial statements in accordance with IAS 34. Our responsibility is to express a conclusion on these condensed consolidated financial statements based on our review, and to report our conclusion solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”. A review of these condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

2015 Interim Report

Report on Review of Condensed Consolidated Financial Statements

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

Without qualifying our review conclusion, we draw attention to the fact that the comparative condensed consolidated statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the six months ended 28 February 2014 and the relevant explanatory notes included in these condensed consolidated financial statements have not been reviewed in accordance with International Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”.

Deloitte Touche Tohmatsu

Certified Public Accountants Hong Kong

28 April 2015

China Maple Leaf Educational Systems Limited

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the six months ended 28 February 2015

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Six months ended 28 February
2015 2014
RMB’000 RMB’000
NOTES (unaudited) (unaudited)
Revenue 3 300,022 242,924
Cost of revenue (176,478) (144,072)
Gross profit 123,544 98,852
Investment and other income 6,946 3,162
Other income, gains and losses 1,151 2
Marketing expenses (9,314) (8,869)
Administrative expenses (49,605) (31,157)
Finance costs (4,089) (8,414)
Other expenses (7,295) (4,000)
Change in fair value on redeemable convertible preferred shares 14 (277) (23,692)
Change in fair value on warrants 14 — (3,695)
Gain on cancellation of warrants 14 — 42,510
Profit before taxation 61,061 64,699
Taxation 4 (4,679) (2,930)
Profit for the period 5 56,382 61,769
Other comprehensive (expense) income:
Items that may be subsequently reclassified to profit or loss:
Change in fair value of available-for-sale investments (150) (176)
Reclassification adjustment for the accumulative gain included
—
in profit or loss upon disposal of available-for-sale investments (478)
Exchange difference arising on the translation of foreign operation (530) 307
Other comprehensive (expense) income for the period (1,158) 131
Total comprehensive income for the period 55,224 61,900
EARNINGS PER SHARE
Basic (RMB) 7 0.05 0.08
Diluted (RMB) 7 0.05 0.03
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2015 Interim Report

Condensed Consolidated Statement of Financial Position

At 28 February 2015

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At 28 February At 31 August
2015 2014
RMB’000 RMB’000
NOTES (unaudited) (audited)
Non-current Assets
Property, plant and equipment 8 1,228,812 1,218,897
Prepaid lease payments 8 164,594 191,715
Investment properties 17,422 17,850
Goodwill 1,982 1,982
Books for lease 4,039 3,407
Deposits for construction of property and land use right 1,037 1,037
Prepayment for purchase of property plant and equipment — 2,118
1,417,886 1,437,006
Current Assets
Available-for-sale investments — 161,741
Deposit, prepayments and other receivables 9 19,426 24,626
—
Restricted bank deposits 4,000
Bank balances and cash 809,529 380,332
828,955 570,699
Assets classified as held for sale 12 71,152 —
900,107 570,699
Current Liabilities
Deferred revenue 10 283,325 500,231
Other payables and accrued expenses 11 158,777 218,148
Income tax payable 18,998 16,959
—
Amounts due to related parties 3,544
Bank borrowings — 223,500
461,100 962,382
Liabilities associated with assets classified as held for sale 12 103,900 —
565,000 962,382
Net Current Assets (Liabilities) 335,107 (391,683)
Total Assets Less Current Liabilities 1,752,993 1,045,323
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China Maple Leaf Educational Systems Limited

Condensed Consolidated Statement of Financial Position

At 28 February 2015

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At 28 February At 31 August
2015 2014
RMB’000 RMB’000
NOTES (unaudited) (audited)
Capital And Reserves
Share capital 13 8,253 511
Reserves 1,723,216 466,723
1,731,469 467,234
Non-Current Liabilities
Deferred tax liabilities 21,524 19,171
Redeemable convertible preferred shares 14 — 476,518
Deposit received in respect of disposal of properties 12 — 80,000
Other non-current liabilities — 2,400
21,524 578,089
1,752,993 1,045,323
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2015 Interim Report 25

Condensed Consolidated Statement of Changes in Equity For the six months ended 28 February 2015

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Attributable
Investment Statutory Share to owners
Share Share valuation Translation surplus option Accumulated of the
capital premium reserve reserve reserve reserve profits Company
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(Note a) (Note b)
At 1 September 2013 511 24,940 379 (61) 163,483 4,025 224,365 417,642
Other comprehensive (expense) income
for the period — — (176) 307 — — — 131
Profit for the period — — — — — — 61,769 61,769
Total comprehensive (expense) income
for the period — — (176) 307 — — 61,769 61,900
At 28 February, 2014 (unaudited) 511 24,940 203 246 163,483 4,025 286,134 479,542
At 1 September 2014 511 24,940 628 686 173,015 12,585 254,869 467,234
— — — — —
Other comprehensive expense for the period (628) (530) (1,158)
Profit for the period — — — — — — 56,382 56,382
Total comprehensive income for the period — — (628) (530) — — 56,382 55,224
Share-based payments — — — — — 5,706 — 5,706
Conversion of redeemable convertible
preferred shares 131 476,664 — — — — — 476,795
The effect of capitalization issue (Note 13 (c)) 5,562 (5,562) — — — — — —
Issuance of ordinary shares 2,049 759,080 — — — — — 761,129
Expenses incurred in connection with the
— — — — — —
issuance of ordinary shares (34,619) (34,619)
At 28 February 2015 (unaudited) 8,253 1,220,503 — 156 173,015 18,291 311,251 1,731,469
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Note a: Share premium represents the excess of capital contribution by the shareholder over the share capital.

Note b: Pursuant to the relevant laws in the People’s Republic of China (the “PRC”), the Company’s subsidiaries in the PRC shall make appropriations from after-tax profit to non-distributable reserve funds as determined by the board of the directors of the relevant PRC subsidiaries. These reserves include (i) general reserve of the limited liabilities companies and (ii) the development fund of schools.

(i) For PRC subsidiaries with limited liability, it is required to make annual appropriations to general reserve of 10% of after-tax profits as determined under the PRC laws and regulations at each year-end until the balance reaches 50% of the relevant PRC entity’s registered capital.
(ii) According to the relevant PRC laws and regulations, for private school that does not require for reasonable return, it is required to appropriate to development fund of not less than 25% of the annual increase of net assets of the relevant school as determined in accordance with generally accepted accounting principles in the PRC. The development fund is for the construction or maintenance of the school or procurement or upgrading of educational equipment.

China Maple Leaf Educational Systems Limited

Condensed Consolidated Statement of Cash Flows

For the six months ended 28 February 2015

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Six months ended 28 February
2015 2014
RMB’000 RMB’000
(unaudited) (unaudited)
Net cash used in operating activities (160,449) (101,046)
Net cash generated from (used in) investing activities
—
Proceeds from disposal of available-for-sale investments 162,222
Deposit received in respect of disposal of properties 20,000 10,000
—
Withdrawal of restricted bank deposits 4,000
Dividends received from available-for-sale investments 50 64
Proceeds on disposal of property, plant and equipment 21 54
Payments for property, plant and equipment (95,006) (73,343)
Purchase of books for lease (2,043) (2,967)
Refund of deposits for construction of property and land use right — 190
89,244 (66,002)
Net cash generated from (used in) financing activities
—
Proceeds from issue of ordinary shares 761,129
Repayments of bank borrowings (223,500) (126,000)
—
Expense on issue of ordinary shares (29,402)
Interest paid (4,089) (8,369)
—
Repayment of amounts due to related parties (3,544)
Proceeds from bank borrowings — 85,000
500,594 (49,369)
Net increase (decrease) in cash and cash equivalents 429,389 (216,417)
Cash and cash equivalents at beginning of the period 380,332 409,303
Effect of foreign exchange rate changes (192) (8)
Cash and cash equivalents at end of the period,
represented by bank balances and cash 809,529 192,878
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2015 Interim Report

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

1. BASIS OF PREPARATION

The condensed consolidated financial statements of the Company and its subsidiaries (collectively referred to as the “Group”) have been prepared in accordance with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting”.

2. PRINCIPAL ACCOUNTING POLICIES

The condensed consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values, as appropriate.

Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 28 February 2015 are the same as those followed in the preparation of the Group’s annual financial statements for the year ended 31 August, 2014.

In the current interim period, the Group has applied, for the first time, the following amendments and interpretation (“new and revised IFRSs”) that are relevant for the preparation of the Group’s condensed consolidated financial statements:

Amendments to IFRS 10, IFRS 12 and IAS 27	Investment Entities
Amendments to IAS 32	Offsetting Financial Assets and Financial Liabilities
Amendments to IAS 36	Recoverable Amount Disclosures for Non-Financial Assets
Amendments to IAS 39	Novation of Derivatives and Continuation of Hedge Accounting
Amendments to IAS 19	Defned Beneft Plans: Employee Contributions
Amendments to IFRSs	Annual Improvements to IFRSs 2010–2012 Cycle
Amendments to IFRSs	Annual Improvements to IFRSs 2011–2013 Cycle
IFRIC 21	Levies

The application of the above new and revised IFRSs in the current interim period has had no material effect on the amounts reported in these condensed consolidated financial statements and/or disclosures set out in these condensed consolidated financial statements.

In addition, the Group has applied, for the first time in the current interim period, the following accounting policy.

China Maple Leaf Educational Systems Limited

For the six months ended 28 February 2015

Notes to the Condensed Consolidated Financial Statements

2. PRINCIPAL ACCOUNTING POLICIES (continued)

Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset (or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs of disposal.

3. REVENUE AND SEGMENT INFORMATION

Revenue represents (i) service income from tuition fees and boarding fees, (ii) fees from overseas studies consulting services and summer and winter vacation activities provided to students, (iii) fees from renting educational books to students, and (iv) sales of educational materials to students, less returns, discounts and sales related tax.

The Group is mainly engaged in international school education in the PRC. The Group’s chief operating decision maker has been identified as the Chief Executive Officer who reviews revenue analysis by services lines when making decisions about allocating resources and assessing performance of the Group.

As there is no other discrete financial information is available for assessment of performance of different services, no segment information is presented.

The revenues attributable to the Group’s service lines are as follows:

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Six months ended 28 February
2015 2014
RMB’000 RMB’000
(unaudited) (unaudited)
Tuition fees 266,760 225,113
Others 33,262 17,811
300,022 242,924
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2015 Interim Report

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

4. TAXATION

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Six months ended 28 February
2015 2014
RMB’000 RMB’000
(unaudited) (unaudited)
The charge comprises
Current tax:
PRC Enterprise Income Tax (“PRC EIT”) 2,326 1,217
Deferred tax:
Current year 2,353 1,713
4,679 2,930
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The Company was incorporated in the Cayman Islands and Maple Leaf Educational Systems Limited was incorporated in the British Virgin Islands (“BVI”) that are tax exempted as no business is carried out in the Cayman Islands and BVI under the tax laws of the Cayman Islands and the BVI.

No provision for Hong Kong Profits Tax has been made as the Group’s operation in Hong Kong had no assessable profit for both periods.

All subsidiaries of the Company established in the PRC are subject to the PRC EIT of 25% for both periods.

According to the Implementation Rules for the Law for Promoting Private Education, private schools for which the sponsors do not require reasonable returns are eligible to enjoy the same preferential tax treatment as public schools. Dalian Maple Leaf International School, Dalian Maple Leaf International School (Middle School and Elementary School), Tianjin Taida Maple Leaf International School, Wuhan Maple Leaf International School and Wuhan Maple Leaf School have been granted enterprise income tax exemption for the tuition income from relevant local tax authorities.

China Maple Leaf Educational Systems Limited

For the six months ended 28 February 2015

Notes to the Condensed Consolidated Financial Statements

5. PROFIT FOR THE PERIOD

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Six months ended 28 February
2015 2014
RMB’000 RMB’000
(unaudited) (unaudited)
Profit for the period has been arrived at after charging (crediting):
Staff costs, including directors’ remuneration (note)
— salaries and other allowances 136,091 101,947
— retirement benefit scheme contributions 5,612 5,409
— share-based payments 5,706 —
Total staff costs 147,409 107,356
Gross rental income from investment properties (1,563) (1,888)
Less:
Direct operating expense (including depreciation) incurred for
investment properties that generated rental income
during the period (included in other expenses) 587 754
Direct operating expense (including depreciation) incurred for
investment properties that did not generate rental income
during the year (included in other expenses) 123 4
(853) (1,130)
Depreciation of property, plant and equipment 18,012 17,215
Depreciation of investment properties 428 428
Release of prepaid lease payments 2,317 2,494
Amortisation of books for lease 1,411 1,394
Listing-related expenses (included in other expenses) 6,552 3,232
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Note: The staff costs of approximately RMB110,082,000, RMB1,858,000 and RMB35,469,000 (for the six months ended 28 February 2014:

RMB89,541,000, RMB1,223,000 and RMB16,592,000) are included in the cost of revenue, marketing expenses and administrative expenses, respectively, for the current interim period.

2015 Interim Report 31

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

6. DIVIDENDS

No dividends were paid, declared or proposed during the interim period. Subsequent to the end of the current interim period, the directors of the Company have determined that an interim dividend of HK$0.025 per share (2014: Nil) amounting to RMB0.02 (2014: Nil) will be paid to the Shareholders whose names appear on the register of members of the Company at the close of business on Monday, 18 May 2015.

7. EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share attributable to the owners of the company is based on the following data:

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Six months ended 28 February
2015 2014
RMB’000 RMB’000
(unaudited) (unaudited)
Earnings:
Earnings for the purpose of basic earnings per share
(Profit for the period attributable to owners of the Company) 56,382 61,769
—
Change in fair value on warrant and gain on cancellation of warrants (38,815)
Change in fair value on redeemable convertible preferred shares 277 —
Earnings for the purpose of diluted earnings per share 56,659 22,954
Six months ended 28 February
2015 2014
’000 ’000
(unaudited) (unaudited)
Weighted average number of shares:
Number of ordinary shares for the purpose of basic earnings per share 1,060,220 770,884
Effect of dilutive potential ordinary shares:
Warrants — 13,665
—
Redeemable convertible preferred shares 111,394
Share options 14,030 7,064
Weighted average number of ordinary shares for the purpose of
diluted earnings per share 1,185,644 791,613
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China Maple Leaf Educational Systems Limited

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

7. EARNINGS PER SHARE (continued)

The weighted average number of shares for the purpose of calculating basic earnings per share and diluted earnings per share for both periods has been adjusted for the effect of the capitalization issue as described more fully in Note 13.

For the six months ended 28 February 2015, the computation of diluted earnings per share does not assume the exercise of the Company’s over-allotment options since their assumed exercise would result in an increase in earnings per share.

For the six months ended 28 February 2014, the computation of diluted earnings per share does not assume the conversion of the Company’s outstanding redeemable convertible preferred shares since their assumed conversion would result in an increase in earnings per share.

8. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT AND PREPAID LEASE PAYMENTS

During the current interim period, the Group disposed of certain equipment with an aggregate carrying amount of approximately RMB35,000 (for the six months ended 28 February 2014: RMB76,000) for cash proceeds of approximately RMB21,000 (for the six months ended 28 February 2014: RMB54,000), resulting in a loss on disposal of approximately RMB14,000 (for the six months ended 28 February 2014: RMB22,000).

In addition, the Group spent approximately RMB74,039,000 (for the six months ended 28 February 2014: RMB40,811,000) on addition of property, plant and equipment.

During the current interim period, the Group reclassified certain buildings and land use right with an aggregate carrying amount of RMB45,628,000 and RMB25,524,000 to assets classified as held for sale, respectively. Details are set out in Note 12.

9. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

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At 28 February At 31 August
2015 2014
RMB’000 RMB’000
(unaudited) (audited)
Prepaid rent and other prepaid expenses 7,661 12,086
Other deposits 2,966 2,206
Prepaid lease payments 4,135 4,855
Staff advances 965 1,619
Other receivables 3,699 3,860
19,426 24,626
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2015 Interim Report

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

10. DEFERRED REVENUE

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----- Start of picture text -----

At 28 February At 31 August
2015 2014
RMB’000 RMB’000
(unaudited) (audited)
Tuition and boarding fees 265,260 469,517
Others 18,065 30,714
283,325 500,231
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11. OTHER PAYABLES AND ACCRUED EXPENSES

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At 28 February At 31 August
2015 2014
RMB’000 RMB’000
(unaudited) (audited)
Other tax payables 16,318 16,577
Payables for purchase of property, plant and equipment 33,694 56,779
Miscellaneous expenses received from students (Note) 58,820 86,452
Deposits received from students 17,131 16,846
Accrued payroll 8,152 8,087
Prepayment from lessee 286 637
Accrued operating expenses 1,442 211
Accrued interest expenses — 465
Payable for listing-related expenses 7,856 15,383
Payable for land use right 3,000 3,000
Other payables 12,078 13,711
158,777 218,148
----- End of picture text -----

Note: The amount represents the miscellaneous expenses received from students which will be paid out on behalf of students.

China Maple Leaf Educational Systems Limited

For the six months ended 28 February 2015

Notes to the Condensed Consolidated Financial Statements

12. ASSETS CLASSIFIED AS HELD FOR SALE

On September 22, 2009, the Group signed a transfer agreement with an independent third party to transfer all the buildings and land use right in a campus of Dalian Maple Leaf International School, with a total consideration of RMB110,000,000. The Group has received total deposit of RMB100,000,000 as at 28 February 2015 (31 August 2014: RMB80,000,000).

In December 2014, the Group obtained property ownership certificate of the buildings and land use right, which is a precondition of the transfer. The buildings and land use right and related liabilities, which are available for immediate sale in its present condition subject only to certain terms are usual and customary for sales and are expected to be sold within twelve months from the end of the current interim reporting period, have been classified as a disposal group held for sale and are presented separately in the condensed consolidated statement of financial position.

The sale proceeds are expected to exceed the net carrying amount of the relevant assets and liabilities and no impairment loss has been recognised.

The relevant assets and liabilities at the end of the current interim period are as follows:

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At 28 February
2015
RMB’000
Property, plant and equipment 45,628
Prepaid lease payment 25,524
Total assets classified as held for sale 71,152
Deposit received in respect of disposal of properties (100,000)
Other liabilities (3,900)
Total liabilities associated with assets classified as held for sale (103,900)
----- End of picture text -----

The disposal of the buildings and land use right has been completed in April 2015.

2015 Interim Report

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

13. SHARE CAPITAL

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Shown
in the financial
Number of shares Amount statements as
’000 US$’000 RMB’000
Ordinary shares of US$0.001 each
Authorised
At 1 September 2013, 28 February 2014 and
31 August 2014 179,000 179 1,271
Increase through re-designation from
redeemable convertible preferred shares
(Note a) 21,000 21 129
Increase (Note b) 3,800,000 3,800 23,311
At 28 February 2015 4,000,000 4,000 24,711
Issued and fully paid
At 1 September 2013, 28 February 2014 and
31 August 2014 72,000 72 511
Conversion of redeemable convertible
preferred shares (Note c) 21,399 21 131
Capitalisation Issue (Note d) 906,601 907 5,562
Issuance of ordinary shares
upon listing (Note e) 334,000 334 2,049
At 28 February 2015 1,334,000 1,334 8,253
----- End of picture text -----

Notes:

a. In November 2014, each of the 21,000,000 issued and unissued redeemable convertible preferred shares is re-designated as one ordinary share at par value of US$0.001 each.
b. The authorised share capital of the Company was increased from US$200,000 to US$4,000,000 by a creation of an additional 3,800,000,000 ordinary shares at par value of US$0.001 each.
c. In November 2014, the Company converted each of the Company’s issued and outstanding redeemable convertible preferred shares into approximately 1.19 shares immediately prior to the Capitalisation Issue as defined in Note d below (the “Conversion”).
d. In November 2014, the Company capitalised the sum of US$906,601 (equivalent to RMB5,562,000) standing to the credit of the share premium account of the Company and applied the amount towards paying up in full 906,600,668 shares of US$0.001 each for allotment to the shareholders whose names appear on the register of members of the Company immediately before the listing (the “Capitalisation Issue”).
e. On 28 November 2014, the Company issued 334,000,000 ordinary shares at par value of US$0.001 each pursuant to the global offering at the price of HK$2.88 per share upon listing and the Company’s shares were listed on The Stock Exchange of Hong Kong on the same date.

China Maple Leaf Educational Systems Limited

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

14. REDEEMABLE CONVERTIBLE PREFERRED SHARES AND WARRANTS

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Number of shares Nominal amount
’000 US$’000
Redeemable convertible preferred shares of $0.001 each:
Authorised
At 1 September 2013, 28 February 2014 and 31 August 2014 21,000 21
Re-designated to ordinary shares (21,000) (21)
At 28 February 2015 — —
Issued and fully paid
At 1 September 2013, 28 February 2014 and 31 August 2014 18,000 18
Conversion of redeemable convertible preferred shares (18,000) (18)
At 28 February 2015 — —
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On 12 March 2008, the Company issued 18,000,000 series A redeemable convertible preferred shares (“Series A Preferred Shares”) at RMB10 (equivalent to US$1.41) per share for a total gross cash proceeds of RMB180,000,000 (equivalent to US$25,342,000) to Sequoia Capital China Growth Fund I, L.P., which has subsequently transferred 1,926,000 and 370,800 redeemable convertible preferred shares to Sequoia Capital China GF Principals Fund I, L.P. and Sequoia Capital China Growth Partners Fund I, L.P. (together with Sequoia Capital China Growth Fund I, L.P. collectively referred to “Sequoia Capital China”), respectively on 9 May 2008.

On 12 March 2008, in conjunction with the issuance of Series A Preferred Shares, the Company issued 3,000,000 warrants to the holder of Series A Preferred Shares (“Warrants”) to purchase 3,000,000 Series A Preferred Shares. The holder has subsequently transferred 321,000 and 61,800 Warrants to Sequoia Capital China GF Principals Fund I, L.P. and Sequoia Capital China Growth Partners Fund I, L.P.. The exercise price per share for the Warrants is RMB10, and the exercisable period is the period commencing on the grant date of the Warrants and ending on the date of consummation of a qualified initial public offering as agreed.

The Series A Preferred Shares are designated as a financial liability at FVTPL on initial recognition while the Warrants are derivative financial instruments. The Series A Preferred Shares and the Warrants are measured at fair value with changes in fair value recognised in the profit and loss.

2015 Interim Report

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

14. REDEEMABLE CONVERTIBLE PREFERRED SHARES AND WARRANTS (continued)

On 15 January 2014, the Company entered into a termination agreement with Sequoia Capital China. Pursuant to the termination agreement, Sequoia Capital China agreed to terminate the Warrants with immediate effect and irrevocably release and discharge each other from all duties, obligations and liabilities conferred upon each of the parties under the Warrants. Each of the parties acknowledged and confirmed that it has no claim or demand whatsoever against the other parties for any fees, expenses, costs or otherwise arising out of or in connection with the Warrants.

On 28 November 2014, the redeemable convertible preferred shares were converted into the Company’s ordinary shares at par value of US$0.001 each. Immediately before the conversion, the fair value of the redeemable convertible preferred shares was approximately RMB476,795,000, which was measured by the Company with reference to the closing price on the conversion date of HK$2.89 per share as adjusted by an estimated discount rate for the restriction of trading given the converted ordinary shares are prohibited for sale for six months after the listing date.

The movements of the Series A Preferred Shares and Warrants for the six months ended 28 February 2015 and 2014, are set out below:

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Redeemable
convertible
preferred shares Warrants
RMB’000 RMB’000
At 1 September 2013 381,420 38,815
Changes in fair value recognised in profit or loss 23,692 3,695
Gain on cancellation of warrants — (42,510)
At 28 February 2014 405,112 —
Changes in fair value recognised in profit or loss 71,406
At 31 August 2014 476,518 —
Changes in fair value recognised in profit or loss 277 —
Conversion into ordinary shares (476,795) —
At 28 February 2015 — —
----- End of picture text -----

China Maple Leaf Educational Systems Limited

For the six months ended 28 February 2015

Notes to the Condensed Consolidated Financial Statements

15. SHARE-BASED PAYMENTS

The Company’s share option scheme (the “Scheme”), was adopted pursuant to a resolution passed on 1 April 2008 for the primary purpose of providing incentives to directors and eligible employees.

The number of share option outstanding disclosed below has been respectively adjusted to reflect the Capitalisation Issue that became effective on 28 November 2014.

Under the Scheme, the board of directors of the Company may grant options to eligible directors, employees and consultant to subscribe for shares in the Company, up to a total of 32,120,144 shares.

The following table discloses movements of the Company’s share options held by the Group’s employees and the consultants during the six months ended 28 February 2015:

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Granted Forfeited
Outstanding during the during the Outstanding
Date of grant at 31/8/2014 period period at 28/2/2015
’000 ’000 ’000 ’000
Executive director
Sherman Jen 2 Jun 2014 3,212 — — 3,212
Zhang Jingxia 1 Sep 2008 749 — — 749
2 Jun 2014 857 — — 857
Sutherland Colleen Dawn 2 Jun 2014 321 — — 321
James William Beeke 2 Jun 2014 1,071 — — 1,071
Non-executive director
Howard Robert Balloch 2 Jun 2014 1,071 — — 1,071
Employees and consultants
— —
In aggregate 1 Sep 2008 10,814 10,814
— —
1 Sep 2009 1,713 1,713
2 Jun 2014 7,119 — — 7,119
Total 26,927 — — 26,927
Exercisable at the end
of the period 26,927
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2015 Interim Report

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

15. SHARE-BASED PAYMENTS (continued)

The following table discloses movements of the Company’s share options held by the Group’s employees and the consultants during the six months ended 28 February 2014:

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----- Start of picture text -----

Granted Forfeited
Outstanding during the during the Outstanding
Date of grant at 31/8/2013 period period at 28/2/2014
’000 ’000 ’000 ’000
Executive director
Zhang Jingxia 1 Sep 2008 749 — — 749
Employees and consultants
—
In aggregate 1 Sep 2008 12,366 (1,071) 11,295
1 Sep 2009 1,713 — — 1,713
Total 14,828 — (1,071) 13,757
Exercisable at the end
of the period 13,757
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16. CAPITAL COMMITMENTS

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At 28 February At 31 August
2015 2014
RMB’000 RMB’000
(unaudited) (audited)
Capital expenditure contracted for but not provided
in the condensed consolidated financial statements in respect
of the acquisition of property, plant and equipment 80,369 27,325
----- End of picture text -----

There were no capital commitments for which were authorised but not contracted for as at 28 February 2015 and 31 August 2014.

China Maple Leaf Educational Systems Limited

For the six months ended 28 February 2015

Notes to the Condensed Consolidated Financial Statements

17. OPERATING LEASES COMMITMENTS

The Group as lessee

At the end of each reporting period, the Group’s commitments for future minimum lease payments under noncancellable operating leases fall due as follows:

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At 28 February At 31 August
2015 2014
RMB’000 RMB’000
(unaudited) (audited)
Within one year 3,596 3,309
In the second to fifth year inclusive 6,074 5,529
Over five years 33 117
9,703 8,955
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Operating lease payments represent rentals payable by the Group for certain of its office properties. Leases are negotiated and rentals are fixed for lease terms of one to ten years.

The Group as lessor

At the end of reporting period, the Group had contracted with tenants for the following future minimum lease payments:

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At 28 February At 31 August
2015 2014
RMB’000 RMB’000
(unaudited) (audited)
Within one year 2,643 3,137
In the second to fifth year inclusive 442 1,995
3,085 5,132
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2015 Interim Report

Notes to the Condensed Consolidated Financial Statements

For the six months ended 28 February 2015

18. RELATED PARTY DISCLOSURES

The following balances were the amounts due to related parties:

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----- Start of picture text -----

At 28 February At 31 August
2015 2014
RMB’000 RMB’000
Name of related parties (unaudited) (audited)
Sherman Jen — 3,344
Mrs. Ren Shu’e (i) — 200
—
3,544
----- End of picture text -----

(i) Mrs. Ren Shu’e, the sister of Mr. Sherman Jen, who is the Chairman of the board and Co-Chief executive officer of the Company, has equity interest in Dalian Maple Leaf Educational Group Co., Ltd.

The amounts due to related parties were unsecured, interest free and fully repaid during the six months ended 28 February 2015.

Compensation of key management personnel

The remuneration of directors and other members of key management during the period is as follows:

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Six months ended 28 February
2015 2014
RMB’000 RMB’000
(unaudited) (unaudited)
Salaries and other allowances 3,730 2,404
Retirement benefits scheme contributions 7 11
Share-based payments 3,402 —
7,139 2,415
----- End of picture text -----

China Maple Leaf Educational Systems Limited

Definitions

“associate(s)”	has the meaning ascribed thereto under the Listing Rules
“BC”	British Columbia, Canada
“BCMOE”	the Ministry of Education of British Columbia, Canada
“Beipeng Software”	Dalian Beipeng Educational Software Development Inc. (大連北鵬教育軟件開發有限
	公司), a company incorporated under the laws of the PRC on 10 March 2008 and an
	indirectly wholly-owned subsidiary of our Company
“Board” or “Board of Directors”	the Board of directors of our Company
“BVI”	the British Virgin Islands
“China” or “PRC”	the People’s Republic of China and, except where the context requires otherwise and
	only for the purposes of this annual report, references to China or the PRC exclude Hong
	Kong, Macau and Taiwan; the term “Chinese” has a similar meaning
“Companies Ordinance”	the Companies Ordinance (Chapter 622 of the Laws of Hong Kong) effective from 3
	March 2014, as amended, supplemented or otherwise modifed from time to time
“Company”, “our Company”, or	China Maple Leaf Educational Systems Limited (中國楓葉教育集團有限公司*) , an
“the Company”	exempted company incorporated in the Cayman Islands with limited liability on 5 June
	2007 (*for identifcation purpose only)
“consolidated affliated entities” or	the entities that we control through the Contractual Arrangements, namely, Dalian
“consolidated affliated entity”	Education Group, Dalian Foreign School, and Wuhan Foreign School and the
	subsidiaries and affliates controlled by those entities
“Contractual Arrangements”	the series of contractual arrangements entered into by, among others, the Company,
	the Founder, Founder’s Sister, Beipeng Software, Dalian Maple Leaf High School, Dalian
	Educational Group, Dalian Science and Education, Wuhan Foreign School and Dalian
	Foreign School, details of which are described in the section headed “Contractual
	Arrangements” in the prospectus
“Corporate Governance Code”	the Corporate Governance Code and Corporate Governance Report set out in Appendix
	14 of the Listing Rules

2015 Interim Report

Definitions

“Controlling Shareholders”	has the meaning ascribed to it under the Listing Rules and, in the context of this annual
	report, means collectively the Founder and Sherman Investment
“Dalian Educational Group”	Dalian Maple Leaf Education Group Co., Ltd (大連楓葉教育集團有限公司), a company
	incorporated under the laws of the PRC on 23 May 2003 and a consolidated affliated
	entity of our Company
“Dalian Foreign School”	Dalian Maple Leaf Foreign Nationals School (大連楓葉外籍人員子女學校), an entity
	established under the laws of the PRC on 1 May 2004 and a consolidated affliated entity
	of our Company
“Dalian Maple Leaf High School”	Dalian Maple Leaf International School (High School) (大連楓葉國際學校), a Sino-foreign
	joint venture private school between Sherman (Holdings) Limited and, initially, China
	Shijiazhuang Yanshan Textile Corporation Limited established under the laws of the PRC
	on 15 April 1996
“Dalian Science and Education”	Dalian Maple Leaf Science and Education Co., Ltd (大連楓葉科教有限公司), a company
	incorporated under the laws of the PRC on 9 January 2003 and a subsidiary of Dalian
	Educational Group
“Director(s)”	the director(s) of our Company from time to time
“Founder”, “Mr. Sherman Jen” or	Mr. Shu Liang Sherman Jen (任書良), a Canadian citizen and the founder, chairman and
“Mr. Jen”	Co-CEO of our Company
“Founder’s Sister”	Ms. Shu’E Ren (任書娥), a PRC citizen and the sister of the Founder
“Frost & Sullivan”	Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., an independent market, research
	and consulting company which prepared the Frost & Sullivan Report
“Frost & Sullivan Report”	the report, written by Frost & Sullivan as commissioned by the Company containing an
	analysis of the PRC education industry and other relevant economic and statistical data
“Global Offering”	the Hong Kong Public Offering and international placing

China Maple Leaf Educational Systems Limited

Definitions

“Group,” “our Group”,	the Company, its subsidiaries and the consolidated affliated entities from time to time or,
“the Group”, “we”, “us”, or	where the context so requires, in respect of the period prior to our Company becoming
“our”	the holding company of its present subsidiaries, such subsidiaries as if they were
	subsidiaries of our Company at the relevant time
“Hong Kong” or “HK”	the Hong Kong Special Administrative Region of the PRC
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong Offer Shares”	the 33,400,000 Shares initially being offered for subscription in the Hong Kong Public
	Offering
“Hong Kong Public Offering”	the offer of the Hong Kong Offer Shares for subscription by the public in Hong Kong
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“IFRS”	International Financial Reporting Standards, as issued from time to time by the
	International Accounting Standards Board
“Listing Date”	28 November 2014, the date the Shares were listed on the Main Board of the Stock
	Exchange
“Listing Rules”	the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
	Limited, as amended, supplemented or otherwise modifed from time to time
“Main Board”	the stock exchange (excluding the option market) operated by the Stock Exchange
	which is independent from and operates in parallel with the Growth Enterprise Market of
	the Stock Exchange
“Maple Leaf Educational Systems	a company incorporated under the laws of the BVI on 28 April 1992, and a wholly-owned
Limited”	subsidiary of the Company
“Model Code”	the Model Code for Securities Transactions by Directors of Listed Issuers set out in
	Appendix 10 of the Listing Rules
“Post-IPO Share Option Scheme”	the share option scheme approved and adopted by our Company on 10 November 2014

2015 Interim Report

Definitions

“Preferred Shares”	the initial 18,000,000 redeemable convertible preferred shares with par value of
	US$0.001 each in the share capital of our Company issued in connection with the Pre-
	IPO investment
“Preferred Share Purchase	the agreement entered into by the Company and Sequoia Capital China Growth Fund
Agreement”	I, L.P. dated 29 February 2008, as amended on 25 March 2014, pursuant to which
	Sequoia Capital China Growth Fund I, L.P., subject to certain terms and conditions,
	agreed to subscribe for the Preferred Shares
“Pre-IPO Investment”	the pre-IPO investment in the Company undertaken by Sequoia Capital China pursuant
	to the Preferred Share Purchase Agreement
“Pre-IPO Share Option Scheme”	the share option scheme approved and adopted by our Company on 1 April 2008
“prospectus”	the prospectus of the Company published on 18 November 2014 in connection with the
	listing of the Shares on the Stock Exchange
“RMB”	Renminbi, the lawful currency of PRC
“Reporting Period”	the six months ended 28 February 2015
“RSU Scheme”	the scheme adopted by our Company to grant RSUs to our Directors, executive offcers,
	senior managers, consultants and employees and those of our Subsidiaries
“RSUs”	restricted share units
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as
	amended, supplemented or otherwise modifed from time to time
“Share(s)”	ordinary share(s) with a par value of US$0.001 each in the share capital of our Company
“Shareholder(s)”	holder(s) of Share(s) of the Company from time to time
“Sherman Investment”	Sherman Investment Holdings Limited, a company incorporated under the Laws of the
	BVI on 13 April 2007 and wholly-owned by the Founder
“subsidiary(ies)”	has the meaning ascribed thereto in section 15 of the Companies Ordinance

China Maple Leaf Educational Systems Limited

Definitions

“United States”

the United States of America, its territories, its possessions and all areas subject to its jurisdiction

“US$”

United States dollars, the lawful currency of the United States

“Wuhan Foreign School”

Wuhan Maple Leaf Foreign Nationals School (武漢楓葉外籍人員子女學校), an entity established under the laws of the PRC on 9 December 2006 and a consolidated affiliated entity of our Company

“%” percent

2015 Interim Report

Glossary

“elementary school” schools that provide education for students in grade one through six “high schools” schools that provide education for students in grade 10 through grade 12 “international school” a school that promotes education either by adopting a foreign curriculum or by following a national curriculum different from that of the school’s country of residence “middle school” schools that provide education for students in grade seven through grade nine “preschool” educational establishments offering early childhood education to children prior to the commencement of compulsory education “private schools” schools which are not administered by local, provincial or national governments “public schools” schools administered by local, provincial or national governments “school year” except for our preschools, the school year for all of our schools, which generally starts on 1 September of each calendar year and ends on 30 June of the next calendar year

China Maple Leaf Educational Systems Limited

AI assistant

China Maple Leaf Educational Systems Limited — Interim / Quarterly Report 2015

49847_rns_2015-05-19_d29d102b-1625-44c9-9911-02af3ab09deb.pdf

Contents

Corporate Information

BOARD OF DIRECTORS

COMPANY SECRETARY

Executive Directors

AUTHORIZED REPRESENTATIVES

Non-Executive Director

AUDITORS

Independent Non-Executive Directors

AUDIT COMMITTEE

COMPLIANCE ADVISER

LEGAL ADVISERS

REMUNERATION COMMITTEE

NOMINATION AND CORPORATE GOVERNANCE COMMITTEE

REGISTERED OFFICE

HEADQUARTERS AND PRINCIPAL PLACE OF BUSINESS IN CHINA

HONG KONG SHARE REGISTRAR

STOCK CODE

PRINCIPAL PLACE OF BUSINESS IN HONG KONG REGISTERED UNDER PART 16 OF THE COMPANIES ORDINANCE

COMPANY WEBSITE

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

Financial and Operational Highlights

Management Discussion and Analysis

Business Review

Management Discussion and Analysis

Financial Review

1. Overview

2. Revenue

Management Discussion and Analysis

3. Cost of Revenue and Gross Profit Margin

6. Marketing Expenses

7. Administrative Expenses

8. Finance Costs

4. Investment and Other Income

5. Other Income, Gains and Losses

9. Other Expenses

Management Discussion and Analysis

10. Changes in Fair Value on Redeemable Convertible Preferred Shares

11. Changes in Fair Value on Warrants/Gain on Cancellation of Warrants

12. Profit before Income Tax

13. Taxation

14. Profit for the Period

15. Adjusted Net Profit

16. Other Comprehensive (Expense) Income for the Period

17. Liquidity and Source of Funding and

Borrowing

18. Gearing Ratio

19. Material Investments

Management Discussion and Analysis

20. Material Acquisitions and Disposals

23. Foreign Exchange Exposure

24. Employee’s Remuneration and Policy

21. Pledge of Assets

22. Contingent Liabilities

Other Information

Interim Dividend

Directors’ and Chief Executives’ Interests and Short Positions in the Shares, Underlying Shares and Debentures

Other Information

Substantial Shareholders’ Interests and Short Positions in the Shares, Underlying Shares and Debentures

Other Information

Share Incentive Schemes

1. Employee Pre-IPO Share Option Scheme

Other Information

2. Post-IPO Share Option Scheme

3. RSU Scheme

Corporate Governance

Other Information

Model Code

Mr. Lap Tat Arthur WONG

Directors’ Interest in a Competing Business

Audit Committee

Changes in Information of Directors

Mr. Howard Robert BALLOCH

Other Information

Other Board Committees

Purchase, Sale or Redemption of the Company’s Listed Securities

Material Litigation

China Maple Leaf Educational Systems Limited Interim / Quarterly Report 2015