China Maple Leaf Educational Systems Limited — Interim / Quarterly Report 2021

May 25, 2021

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

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INTERIM REPORT 2021

• For identification purposes only

CONTENTS

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED 2021 INTERIM REPORT

CORPORATE INFORMATION

BOARD OF DIRECTORS

Executive Directors

Mr. Shu Liang Sherman Jen (Chairman and Chief Executive Officer (“ CEO ”)) Ms. Jingxia Zhang (Chief Financial Officer (“ CFO ”)) Mr. James William Beeke

Independent Non-executive Directors

Mr. Peter Humphrey Owen Mr. Alan Shaver Mr. Lap Tat Arthur Wong

AUDIT COMMITTEE

Mr. Lap Tat Arthur Wong (Chairman) Mr. Peter Humphrey Owen Mr. Alan Shaver

COMPANY SECRETARY

Ms. Wan Mun Yee, Sabine* Ms. Jen Shu Ling[#]

AUTHORIZED REPRESENTATIVES

Ms. Jingxia Zhang Ms. Wan Mun Yee, Sabine* Ms. Jen Shu Ling[#]

AUDITORS

Deloitte Touche Tohmatsu Registered Public Interest Entity Auditors

LEGAL ADVISORS

As to Hong Kong law Herbert Smith Freehills

REMUNERATION COMMITTEE

As to PRC law

Mr. Peter Humphrey Owen (Chairman) Mr. Alan Shaver Mr. James William Beeke

Tian Yuan Law Firm

As to Cayman Islands law

Maples and Calder (Hong Kong) LLP

NOMINATION AND CORPORATE GOVERNANCE COMMITTEE

• Resigned on 28 April 2021

• # Appointed on 28 April 2021

Mr. Shu Liang Sherman Jen (Chairman) Mr. Peter Humphrey Owen Mr. Alan Shaver

CORPORATE INFORMATION

REGISTERED OFFICE

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

HEADQUARTERS AND PRINCIPAL PLACE OF BUSINESS IN CHINA

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

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

Room 1302, 13/F., Tai Tung Building 8 Fleming Road, Wan Chai Hong Kong

HONG KONG BRANCH SHARE REGISTRAR

Tricor Investor Services Limited Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong

STOCK CODE

1317

COMPANY WEBSITE

www.mapleleaf.cn

INVESTOR RELATIONS

Email: ir@mapleleaf.net.cn Address: Room 1302, 13/F., Tai Tung Building 8 Fleming Road, Wanchai, Hong Kong

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE

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

CORPORATE PROFILE

China Maple Leaf Educational Systems Limited (the “ Company ”, together with its subsidiaries and consolidated affiliated entities, collectively the “ Group ”) is one of the leading international school operators in terms of student enrollment, from preschool to grade 12 (“ K-12 ”) education, mainly in the People’s Republic of China (“ China ” or the “ PRC ”) and Asia-Pacific Area.

Founded in 1995, the Group’s headquarter is located in Dalian, Liaoning Province, China. With over twenty six years of experience in operating international schools in China, the Group provides high quality K-12 education by combining the merits of both Western and Eastern educational philosophies in 29 cities across countries, such as China, Canada, Malaysia, Singapore and Australia, namely Dalian, Wuhan, Tianjin, Chongqing, Zhenjiang, Luoyang, Ordos, Shanghai, Pingdingshan, Jingzhou, Yiwu, Huai’an, Pinghu, Xi’an, Haikou, Weifang, Huzhou, Yancheng, Shenzhen, Xiangyang, Luzhou, Ji’nan, Hohhot, Kamloops, Richmond, Thunder Bay, Kuala Lumpur, Singapore and Adelaide.

At the end of the 2019/2020 school year, a total of over 18,600 high school students have successfully completed our high school program and have been admitted by more than 700 universities and colleges across 30 countries and regions in the world. We have approximately 2,000 high school students graduating in each school year.

FINANCIAL AND OPERATIONAL HIGHLIGHTS

RESULTS

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Six months ended
28 February 29 February
2021 2020 Change Percentage
RMB’000 RMB’000 RMB’000 Change
(unaudited) (unaudited)
Revenue 1,096,018 791,813 +304,205 +38.4%
Tuition and boarding fee 1,013,608 711,601 +302,007 +42.4%
Others 82,410 80,212 +2,198 +2.7%
Gross profit 475,692 351,279 +124,413 +35.4%
Profit for the period 222,241 263,953 -41,712 -15.8%
Adjusted net profit (Note) 314,523 280,493 +34,030 +12.1%
Gross profit margin 43.4% 44.4% -1.0% -2.3%
Net profit margin 20.3% 33.3% -13.0% -39.0%
Adjusted net profit margin 28.7% 35.4% -6.7% -18.9%
Earnings per share
Basic (RMB cents) 7.44 8.81 -1.37 -15.6%
Diluted (RMB cents) 7.32 8.81 -1.49 -16.9%
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Note:

Adjusted net profit was derived from adjusting the profit for the period for those non-recurring items which are not indicative of the Group’s operating performances. For details, please refer to the section headed “Financial Review” under “Management Discussion and Analysis” in this report.

OPERATIONAL DATA

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As at the end of
28 February 29 February Percentage
2021 2020 Change Change
Total student enrolment 44,076 41,076 +3,000 +7.3%
Total number of schools 116 100 +16 +16.0%
Estimated total capacity of students 73,900 64,620 +9,280 +14.4%
Overall utilisation rate 59.6% 63.6% -4.0% -6.3%
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MANAGEMENT DISCUSSION AND ANALYSIS

PERFORMANCE REVIEW

The 2020/2021 school year is the first year of the Group’s sixth five-year plan (from 2020/2021 to 2021/2025 school years) (“ Sixth Five-Year Plan ”). At the six months ended 28 February 2021, our total student enrollment was 44,076, representing an increase of 3,000 students or 7.3% as compared to the corresponding period of last year. During this school year, our global school network has increased from 109 schools as at 31 August 2020 to 116 schools as at 28 February 2021, of which 103 are located in 23 cities in mainland China, and 13 are located in Canada, Malaysia, Singapore and Australia.

Compared with other international schools in the region, Maple Leaf overseas schools have been less impacted by the COVID-19 epidemic for the six months ended 28 February 2021 and are expected to grow significantly after the COVID-19 epidemic. For the six months ended 28 February 2021, our overseas schools contributed 30.2% of the total revenue of the Group, and enrolled 9.3% of students. The Group will continue to invest in overseas schools, especially along the Belt and Road countries, and we expect that overseas schools will account for 40% or more of the Group’s total revenue at the end of Sixth Five-Year Plan.

As of 28 February 2021, 1,778 Maple Leaf high school students of the class of 2021 have received over 4,124 offer letters from universities in 12 countries. Among them, 99 students received offer letters from QS top 10 universities in the world, including Imperial College London and University College London. In addition, 1,175 students, approximately 64.9% of whom, received at least one offer letter from the Maple Leaf Education Global Top 100 universities.

In order to provide Maple Leaf graduates with a wider range of further education opportunities, the Group has entered into cooperation agreements with 16 well-known domestic universities, such as the Beijing Foreign Studies University, Beijing Institute of Technology, etc. These universities offer programs in various disciplines in cooperation with overseas universities. We will continue to increase cooperation with Chinese domestic universities, and offer a variety of options to our high school graduates.

In the beginning of the 2020/2021 school year, the Maple Leaf World School Program (“ World School Program ”) was officially launched in China and we have completed the first year of high school enrollment. It is the first international program with oriental cultural characteristics in the world. World School Program cooperates with two of the world’s largest educational institutions, benchmarking by UK ENIC (formerly UK NARIC), and accreditation by Cognia (formerly AdvancED). As of 28 February 2021, we have received official support letters from 105 universities in 12 countries. We are confident that World School Program will become a top international education program equivalent to the A-Level and International Baccalaureate (the “ IB ”) programs in the future.

On 27 January 2021, the Company issued Convertible Bonds (the “ Bonds ”) with the principal amount of US$125 million to raise funds for repayment of existing borrowings, acquisitions-related expenses and general corporate purposes. Based on the initial Conversion Price (subject to adjustments) of HK$2.525 per Share and assuming full conversion of the Bonds, the Bonds will be convertible into approximately 383,881,188 New Shares (subject to adjustments). Permission for the listing of, and dealing in, the Bonds became effective on 28 January 2021. Please refer to the announcements and circular of the Company dated 13 January 2021, 27 January 2021 and 28 January 2021 for further details.

MANAGEMENT DISCUSSION AND ANALYSIS

THE GROUP’S MARKET POSITION

With over 26 years of experience in operating international schools in China, the Group is one of the leading international school operators in China in terms of student enrolment, offering high quality, bilingual K-12 education, combining the merits of both Western and Eastern educational philosophies. Our preschools provide an advanced Chinese and English program in a happy learning environment that ensures “whole child” development, and cultivates each child’s bilingual proficiency. Our middle and elementary schools provide Chinese compulsory education with English enhancement classes and school-based curriculum, aiming to cultivate students’ English ability and comprehensive literacy. Our high schools provide World School Program at the commencement of the 2020/2021 school year. Our unique programs and systems are designed to cultivate elite talents with a global perspective and proficiency in Chinese culture and wisdom.

Kingsley International School (“ KIS ”) offers A-Level to K-12 students in Malaysia. Canadian International School (“ CIS ”) offers the IB curriculum to K-12 students across two campuses, the Tanjong Katong campus and the Lakeside campus, in Singapore. CIS is well known for its highly acclaimed bilingual English/Chinese program where students are fully immersed culturally and taught by qualified native English speakers who are also IB-certified.

The Group targets mainly Chinese students from increasingly affluent middle-income families in China who aim to pursue higher education abroad and for whom our tuition fees are affordable and competitive. The Group mainly operates its schools in China under the “Maple Leaf” brand, most of which are located in second and third-tier cities in China (with the exception of Shanghai and Shenzhen being first-tier cities).

KIS targets mainly local students and also international students primarily from Asian countries, while CIS is one of the largest for-profit premium international schools in Singapore in terms of revenue and student enrolment, and targets expatriate families employed in Singapore, especially those from China, South Korea, the US and India and international students from Asian countries.

BUSINESS REVIEW

Student Enrolment

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At 28 At 29
February % of February % of
2021 Total 2020 Total
High school 7,400 16.8 7,360 17.9
Middle school 10,020 22.7 9,131 22.2
Elementary school 21,514 48.8 19,565 47.6
Preschool 4,875 11.1 4,620 11.3
Foreign national school 267 0.6 400 1.0
Total number of students enrolled 44,076 100 41,076 100
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The total number of students enrolled increased by 3,000 or 7.3% from 41,076 for the six months ended 29 February 2020 to 44,076 for the six months ended 28 February 2021, which was primarily due to the acquisition of KIS in Malaysia and CIS in Singapore, and improvement of school utilization rate in Haikou, Ji’nan and Hohhot.

MANAGEMENT DISCUSSION AND ANALYSIS

We have nearly completed the construction of a pyramid-shaped student structure, which meets the needs of internal student enrollment for high schools, and will continue to develop in a balanced manner according to this structure.

Average Tuition Fee per Student

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For the six months ended
28 February 2021 29 February 2020
Tuition fees (RMB’000) 1,013,608 711,601
Average student enrolment 44,840 41,158
Annualized Average tuition fee per student [#] (RMB’000) 45.2 34.6
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* Average student enrolment is calculated as the average of the total number of students enrolled at the end of six months ended and the total number of students enrolled at the end of the previous school year.

# Average tuition fee per student is calculated by dividing tuition fees for the six months period by average student enrolment.

The annualized average tuition fee per student increased by approximately 30.6% was primarily due to the tuition fee rate charged in CIS being much higher as compared to the average tuition fee rate charged by the Group’s remaining schools.

The Group’s Schools

Eight new schools were added to the Group’s school network for the six months ended 28 February 2021, including an elementary school and a middle school in Horinger New Area, Hohhot, Inner Mongolia autonomous region; a high school in Ji’nan, Shandong Province; an elementary school and a preschool in Dalian, Liaoning Province; a preschool in Xiangyang, Hubei Province; an elementary school in Tianjin and a preschool in Yiwu, Zhejiang Province.

As at 28 February 2021, the Group had 116 schools located in 29 cities across countries such as China, Canada, Malaysia, Singapore and Australia, namely Dalian, Wuhan, Tianjin, Chongqing, Zhenjiang, Luoyang, Ordos, Shanghai, Pingdingshan, Jingzhou, Yiwu, Huai’an, Pinghu, Xi’an, Haikou, Weifang, Huzhou, Yancheng, Shenzhen, Xiangyang, Luzhou, Ji’nan, Hohhot, Kamloops, Richmond, Thunder Bay, Kuala Lumpur, Singapore and Adelaide. The following table shows a summary of the Group’s schools by category as at the end of the two periods:

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At 28 February At 29 February
2021 2020
High schools 18 16
Middle schools 29 26
Elementary schools 33 27
Preschools 33 28
Foreign national schools 3 3
Total 116 100
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MANAGEMENT DISCUSSION AND ANALYSIS

Capacity and Utilization of the Group’s Schools

Utilization rate is calculated as the number of students divided by the estimated capacity of a given school. Except for our preschools and foreign national schools, our schools are generally boarding schools in China. For our boarding schools, the capacity for students is based on the number of beds in their dormitories. For our preschools, the capacity for students is based on the number of beds used for naps in the schools. For our foreign national schools, the capacity for students is based on the number of desks in their classrooms.

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At 28 February At 29 February
2021 2020
Total number of students enrolled 44,076 41,076
Total estimated capacity 73,900 64,620
Overall utilization 59.6% 63.6%
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Total estimated capacity for students increased from 64,620 for the six months ended 29 February 2020 to 73,900 for the six months ended 28 February 2021 due to the addition of eight new schools during the six months ended 28 February 2021. The 4.0% decrease in the overall utilization rate was because the utilization rates in existing schools in Ji’nan, Weifang, Huzhou and Pinghu and newly acquired schools in Malaysia were lower than the overall utilization rate of the Group.

The Group’s Teachers

Teachers are the key to maintaining high-quality educational programs and services as well as maintaining our brand and reputation. Our certified teachers form a core group within our teaching staff, allowing us to maintain the quality of our educational services while undergoing expansion. Our Group has established a global recruitment office (the “ Global Recruitment Office ”) to recruit high school foreign teachers and ESL foreign teachers worldwide. The establishment of the Global Recruitment Office ensures both the quality and quantity of Maple Leaf foreign teachers and satisfies the development needs of the Group’s Sixth FiveYear Plan.

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At 28 February At 29 February
2021 2020
Total number of certified teachers 3,902 3,521
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The total number of certified teachers increased from 3,521 for the six months ended 29 February 2020 to 3,902 for the six months ended 28 February 2021 primarily because of the acquisition of CIS, which has 297 IB-certified teachers. Our student-teacher ratio slightly decreased from 11.7:1 for the end of the six months ended 29 February 2020 to 11.3:1 for the six months ended 28 February 2021.

MANAGEMENT DISCUSSION AND ANALYSIS

RECENT BUSINESS UPDATE

Growth in Student Enrolment as at 31 March 2021

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Percentage
As at 31 March Change Change
2021 2020
Total number of students enrolled 46,034 43,572 +2,462 +5.6%
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The total number of students enrolled as at 31 March 2021 was approximately 46,034, representing an increase of 5.6% as compared to the corresponding period of last year; and there are approximately 4,197 students, representing 9.1% of total enrolment, studying at Maple Leaf schools overseas. The increase of student enrollment compared to the corresponding period last year was primarily due to the acquisition of CIS in Singapore, and improvement of school utilization rate in Haikou, Ji’nan, and Hohhot.

The financial year of the Group ends on 31 August each year, while its school year normally runs from the beginning of September each year to the middle of July in the next year and each school year is divided into two terms in China. The number of students enrolled may vary from time to time in each school year. The above student enrolment numbers as at 31 March represent unaudited internal statistics of the total number of students enrolled and shall be used for comparison purposes only.

Development in New Schools Opening

The Group opened a preschool in Tianjin Teda campus in March 2021. An elementary school and a middle school will be opened in Tianjin Eco-city and a high school will be opened in Horinger New Area, Hohhot, in Inner Mongolia autonomous region at the beginning of the 2021/2022 school year. We expect to open schools at Hillside campus in Singapore, Brockville campus in Canada, and in Nanjing and Shenzhen in China at the beginning of the 2022/2023 school year.

University Placements

The quality of Maple Leaf education is reflected in the achievements of our students. Although affected by the COVID-19 epidemic globally, as of 20 April 2021, 1,778 Maple Leaf high school students of the class of 2021 have received over 5,637 offer letters from universities in 14 countries. In addition, 121 of our students have received offer letters from QS Top 10 universities including prestigious University College London and Imperial College London in the United Kingdom. In addition, 1,368 students, approximately 76.9% of whom, received at least one offer letter from the Maple Leaf Education Global Top 100 universities.

Maple Leaf maintains long-term relationships with a significant number of universities and colleges around the world. Various universities and colleges have a memorandum of understanding with us to facilitate the admissions process for our high school graduates. Our Group holds annual university and college recruitment fairs on our campuses and provides consulting services to assist our students in making informed decisions about the universities and colleges they choose to attend. In addition, we assist our students with respect to admissions, visas and scholarships, preparing them to study abroad. We believe that our services ensure a smooth transition for our students from our high schools to higher education.

MANAGEMENT DISCUSSION AND ANALYSIS

FUTURE DEVELOPMENT

Our goal is to become one of the largest international school operators in the world. The Group has implemented the Sixth Five-Year Plan at the commencement of the 2020/2021 school year to map its future development.

Educational School District Development Strategy

Under the School District Development Strategy, across the Sixth Five-Year Plan period, the Group intends to establish (i) up to 10 school districts in the PRC with a target enrollment of 100,000 students; and (ii) two offshore school districts with a target enrollment of at least 10,000 students. The Group aims to build Maple Leaf World Schools in approximately 50 cities worldwide, with around 150 campuses within and outside of the PRC, and a total target enrollment of around 110,000 students. Implementation of this strategy is expected to enable the Group to become one of the largest international school operators in the world.

Standard Implementation Strategy

Under the Standard Implementation Strategy, the Group launched the World School Program, China’s first internationally accredited curriculum with self-developed intellectual property, at the commencement of the 2020/2021 school year. The Group’s first batch of graduates from the World School Program will receive the Maple Leaf High School Graduation Diplomas in June 2023, endorsed by Cognia. The World School Program was developed by Maple Leaf curriculum experts and meets high academic and curriculum standards, which will prepare students well for entering into the world’s top ranked universities. The World School Program has obtained a benchmarking agreement with UK ENIC (formerly UK NARIC) and accreditation of Cognia – two of the world’s most recognised certification institutions – providing further assurance that Maple Leaf graduates will be able to transition to universities across the globe seamlessly.

Overseas Expansion

Overseas expansion is an important part of the Group’s long-term growth strategy. The Group believes that a global presence of Maple Leaf branded schools will help the Group’s student recruitment in China as Chinese parents recognize that Maple Leaf is able to offer a broader array of educational opportunities for their children. In fact, the demand for bilingual English and Chinese education is growing not only in China but also in other regions of the world, such as Southeast Asia and North America. Accordingly, the Group believes that with its unique advantages in having both English and Chinese curricula, and both ESL and CSL programs, it is precisely positioned to meet the demand for quality international K-12 education along the Belt and Road countries, where there is a demand for blending the best of Western and Eastern cultures. The Group will further expand its school network under the brand of CIS and IB in the Southeast Asian countries.

Conclusion

Pursuant to the Sixth Five-Year Plan, the Group will continue to adopt multiple expansion strategies including, but not limited to, increasing our enrollment, increasing tuition fee rate, building more asset-light schools, acquiring schools with synergies to the Group, and expanding our established schools to achieve the growth targets in both the PRC and overseas, and strive to become one of the largest international school operators in the world.

MANAGEMENT DISCUSSION AND ANALYSIS

OTHER INFORMATION

Issuance of US$125 million 2.25% Convertible Bonds due 2026

On 12 January 2021, the Company entered into the Subscription Agreement (the “ Subscription Agreement ”) with UBS AG Hong Kong Branch (the “ Manager ”), under which the Manager has agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for, the Convertible Bonds (the “ Bonds ”) in an aggregate principal amount of US$125 million. The estimated net proceeds from the subscription of the Bonds, after deduction of underwriting commission and expenses, amount to approximately US$123.1 million. The Company intends to use the net proceeds from the issuance of the Bonds for repayment of existing borrowings, acquisitions-related expenses and general corporate purposes. Based on the initial Conversion Price (subject to adjustments) of HK$2.525 per Share and assuming full conversion of the Bonds, the Bonds will be convertible into approximately 383,881,188 New Shares (subject to adjustments). The New Shares are to be issued under the General Mandate. The issue of the Bonds is not subject to the specific approval of the Shareholders.

The Bonds bear interest on their outstanding principal amount from and including 27 January 2021 at the rate of 2.25% per annum, payable semi-annually in arrears on 27 January and 27 July in each year until the Maturity Date. Subject to the conditions as stipulated in the Subscription Agreement, each Bond shall entitle the Bondholder to convert such Bond into New Shares credited as fully paid at any time during the Conversion Period. Permission for the listing of, and dealing in, the Bonds became effective on 28 January 2021.

As at 28 February 2021, all the proceeds had been applied for the repayment of existing borrowings, acquisitions-related expenses and general corporate purposes. Please refer to the announcements and circular of the Company dated 13 January 2021, 27 January 2021 and 28 January 2021 for further details.

As at 28 February 2021, no conversion related to the Bonds was exercised by the Bondholders.

FINANCIAL REVIEW

For the six months ended 28 February 2021, total revenue increased by 38.4%, from RMB791.8 million to RMB1,096.0 million; net profit decreased by 15.8%, from RMB264.0 million to RMB222.2 million and adjusted net profit increased by 12.1%, from RMB280.5 million to RMB314.5 million respectively, as compared with that of 29 February 2020.

Revenue

For the six months ended 28 February 2021, the Group derives revenue from (i) tuition fees from the Group’s high schools, middle schools, elementary schools, preschools and foreign national schools, (ii) the sale and lease of textbooks and other educational materials to the Group’s students, and (iii) other educational services.

The total revenue of the Group increased by RMB304.2 million, or 38.4%, from RMB791.8 million for the six months ended 29 February 2020 to RMB1,096.0 million for the six months ended 28 February 2021, primarily due to the increase in revenue from tuition fees by RMB302.0 million and the increase in revenue from other sources by RMB2.2 million. Amongst the total revenue of the Group for the six months ended 28 February 2021, RMB765.5 million (approximately 69.8%) is contributed by the operations in PRC with the remaining RMB330.6 million (approximately 30.2%) contributed by the operation overseas.

MANAGEMENT DISCUSSION AND ANALYSIS

Revenue from tuition fees increased by 42.4% from RMB711.6 million for the six months ended 29 February 2020 to RMB1,013.6 million for the six months ended 28 February 2021, mainly due to (i) revenue generated from newly acquired overseas schools, KIS and CIS and (ii) an increase in tuition fee rate. Revenue from others increased by 2.7% from RMB80.2 million for the six months ended 29 February 2020 to RMB82.4 million for the six months ended 28 February 2021, mainly due to the addition of other educational services provided by CIS and KIS to students.

Cost of Revenue

The Group’s cost of revenue primarily consists of (i) staff costs, (ii) depreciation and amortisation, and (iii) other costs. Staff costs consist of salaries and benefits paid to the Group’s teachers and other teaching staff. Depreciation and amortisation relate to property and equipment, right-of-use assets, intangible assets and investment properties. Other costs include daily operating expenses of the Group’s schools and facilities, including the utility costs, the cost of furniture and the cost of maintaining facilities at the Group’s schools.

Cost of revenue increased by RMB179.8 million, or 40.8%, from RMB440.5 million for the six months ended 29 February 2020 to RMB620.3 million for the six months ended 28 February 2021. The increase was largely due to the addition of cost of revenue from the newly acquired overseas schools, KIS and CIS.

Teaching staff costs increased by 37.4% from RMB282.6 million for the six months ended 29 February 2020 to RMB388.3 million for the six months ended 28 February 2021, primarily due to an increase in the number of teachers from 3,521 as at 29 February 2020 to 3,902 as at 28 February 2021. Depreciation and amortization increased from RMB62.2 million for the six months ended 29 February 2020 to RMB128.1 million for the six months ended 28 February 2021, primarily due to the additional depreciation charge for our schools in KIS and CIS during the period.

Gross Profit

As a result of the foregoing, gross profit increased by 35.4% from RMB351.3 million for the six months ended 29 February 2020 to RMB475.7 million for the six months ended 28 February 2021. Our gross margin slightly decreased from 44.4% for the six months ended 29 February 2020 to 43.4% for the six months ended 28 February 2021, primarily due to the gross profit margin in overseas schools being slightly lower than that in schools situated in mainland China.

Investment and Other Income

Investment and other income consist mainly of (i) interest income from our bank deposits, (ii) rental income from investment properties and (iii) government grants. Investment and other income increased by 61.7% from RMB28.8 million for the six months ended 29 February 2020 to RMB46.6 million for the six months ended 28 February 2021. Bank interest income increased by 119.1% from RMB11.6 million for the six months ended 29 February 2020 to RMB25.3 million for the six months ended 28 February 2021 primarily due to the interest income from pledged bank deposits under the NBWD arrangement.

For the six months ended 28 February 2021, government grants increased by RMB6.2 million primarily due to more COVID-19 related subsidies received from government during this period.

MANAGEMENT DISCUSSION AND ANALYSIS

Other Gains and Losses

Other gains and losses consist primarily of (i) changes in fair value of Convertible Bonds, (ii) changes in fair value of financial assets measured at FVTPL, (iii) net foreign exchange gain or loss, and (iv) impairment of property, plant and equipment. Other gains and losses decreased from a gain of RMB19.1 million for the six months ended 29 February 2020 to a loss of RMB32.3 million for the six months ended 28 February 2021. The decrease was mainly attributable to (i) loss arising from changes in fair value of Convertible Bonds of RMB40.6 million and (ii) a decrease on gain arising from changes in fair value of financial assets measured at FVTPL by RMB18.8 million.

Marketing Expenses

Marketing expenses mainly consist of (i) commercials and expenses for producing, printing and distributing advertising and promotional materials and (ii) salaries and benefits for personnel engaged in selling and marketing activities. Marketing expenses increased by 2.1% from RMB15.5 million for the six months ended 29 February 2020 to RMB15.9 million for the six months ended 28 February 2021. Marketing expenses as a percentage of revenue decreased from 2.0% for the six months ended 29 February 2020 to 1.4% for the six months ended 28 February 2021, primarily due to a decrease in advertising and promotional expenses and student placement related expenses.

Administrative Expenses

Administrative expenses consist primarily of (i) salaries and other benefits for general and administrative staff, (ii) depreciation of office buildings and equipment, (iii) travel expenses, (iv) employee share-based payments and (v) certain professional expenses. Administrative expenses increased by 57.2% from RMB102.9 million for the six months ended 29 February 2020 to RMB161.7 million for the six months ended 28 February 2021, mainly attributed from the addition of administrative expenses by newly acquired overseas schools, KIS and CIS. Administrative expenses as a percentage of total revenue increased from 13.0% for the six months ended 29 February 2020 to 14.8% for the six months ended 28 February 2021 as a result of the acquisition of KIS and CIS.

Finance Costs

For the six months ended 28 February 2021, finance costs were mainly represented by interest expenses and related bank arrangement fees for secured bank borrowings. Finance costs increased from RMB8.1 million for the six months ended 29 February 2020 to RMB67.2 million for the six months ended 28 February 2021 primarily due to the utilizations of bank borrowings to finance the KIS and CIS acquisitions.

Profit before Taxation

As a result of the foregoing, the Group recorded a profit before taxation of RMB245.3 million for the six months ended 28 February 2021, compared to RMB272.7 million for the six months ended 29 February 2020. Profit before taxation as a percentage of revenue of the Group was 22.4% for the six months ended 28 February 2021, compared with 34.4% for the six months ended 29 February 2020.

Taxation

Income tax expense of the Group increased from RMB8.7 million for the six months ended 29 February 2020 to RMB23.0 million for the six months ended 28 February 2021, mainly due to the addition of enterprise income tax (the “ EIT ”) expenses recognized by CIS. The effective tax rates of the Group for the six months ended 28 February 2021 and 29 February 2020 were 9.4% and 3.2% respectively. The increase in the Group’s effective tax rate was primarily due to the EIT expenses recognized by CIS.

MANAGEMENT DISCUSSION AND ANALYSIS

Profit for the Period

As a result of the above factors, profit for the period of the Group decreased by 15.8% from RMB264.0 million for the six months ended 29 February 2020 to RMB222.2 million for the six months ended 28 February 2021. The decrease in profit for the six months ended 28 February 2021 is mainly due to (i) loss arising from the changes in fair value of Convertible Bonds; (ii) increase in amortization of other intangible assets and depreciation of properties arising from acquisition and (iii) increase in finance costs.

Adjusted Net Profit

Adjusted net profit was derived from adjusting the profit for the period for those non-recurring items which are not indicative of the Group’s operating performances. The following table reconciles profit for the period to adjusted net profit for both periods:

==> picture [476 x 163] intentionally omitted <==

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

Six months ended
28 February 2021 29 February 2020
RMB’000 RMB’000
Profit for the period 222,241 263,953
Add:
Amortization of other intangible assets and depreciation of
properties arising from acquisition 45,007 5,500
–
Changes in fair value of Convertible Bonds 40,607
Share-based payments 6,668 11,040
Adjusted net profit 314,523 280,493
----- End of picture text -----

Adjusted net profit for the six months ended 28 February 2021 increased by RMB34.0 million or 12.1%. Adjusted net profit margin was 28.7% for the six months ended 28 February 2021, compared with 35.4% for the six months ended 29 February 2020.

Capital Expenditures

For the six months ended 28 February 2021, the Group paid RMB141.7 million for property and equipment primarily related to the new campus in Tianjin (Eco-city), campus expansion in Wuhan and additional dormitory building in Shanghai. For the six months ended 29 February 2020, the Group paid RMB140.8 million for campus expansion in Wuhan and campus acquisition in Brockville, Canada.

MANAGEMENT DISCUSSION AND ANALYSIS

Liquidity, Financial Resources and Capital Structure

The following table sets forth a summary of the Group’s cash flows for the two interim periods:

==> picture [475 x 204] intentionally omitted <==

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

Six months ended
28 February 2021 29 February 2020
RMB’000 RMB’000
(unaudited) (unaudited)
Net cash used in operating activities (238,429) (424,571)
Net cash used in investing activities (93,463) (72,913)
Net cash used in financing activities (64,611) (167,325)
Net decrease in cash and cash equivalents (396,503) (664,809)
Cash and cash equivalents as at 1 September 1,310,907 2,762,328
Effect of changes in foreign exchange rate 2,443 (2,636)
Cash and cash equivalents as at the end of the period represented
by bank balances and cash 916,847 2,094,883
----- End of picture text -----

As at 28 February 2021, the Group’s bank balances and cash amounted to RMB916.8 million, which were mainly denominated in RMB and SGD. Bank balances and cash decreased mainly because the cash were used for the acquisition of KIS and CIS. Net cash used in operating activities decreased by RMB186.1 million, which were primarily due to additional tuition fee being collected during the interim period, as tuition fee from overseas schools were collected by school terms instead of school year.

As at 28 February 2021, the Group’s bank borrowings were RMB2,715.0 million which were mainly denominated in SGD, with variable interest rates with reference to Singapore Interbank Offered Rate. Of the Group’s bank borrowings as at 28 February 2021, 62.2% will mature within one year and the remaining 37.8% will mature after one year. These bank borrowings were secured by the Group’s bank deposits and investment properties. Out of total bank borrowings, the borrowings amounting to RMB1,379.2 million was secured by onshore cash.

The Group expects that its future capital expenditures will primarily be financed by its internal resources.

Gearing Ratio

The gearing ratio of the Group was calculated as total borrowings divided by total equity as at the end of the relevant financial period. Gearing ratio decreased from 78.5% for the year ended 31 August 2020 to 73.8% for the six months ended 28 February 2021 primarily due to the repayment of banking borrowings during the period.

Foreign Exchange Exposure

The majority of the Group’s revenue and expenditures are denominated in RMB, the functional currency of the Company, except that certain expenditures and liabilities are denominated in foreign currencies such as HKD, USD, CAD, MYR and SGD. As at 28 February 2021, certain bank balances and cash and liabilities were denominated in HKD, USD, CAD and SGD. The Group did not enter into any financial arrangement for hedging purposes as it is expected that its foreign exchange exposure will not be material.

MANAGEMENT DISCUSSION AND ANALYSIS

Contingent Liabilities

On 15 November 2016, the Company received a writ of summons from Hong Kong Zhixin Financial News Agency Ltd. (“ Zhixin ”) seeking among other things, specific performance of the consultancy agreement (the “ Agreement ”) between the Company and Zhixin by the allotment and issue of 7,000,000 shares of the Company to Zhixin, and damages in lieu or in addition thereof (“ Zhixin Case ”). On 28 November 2016, the Company filed with the High Court of the Hong Kong Special Administrative Region its acknowledgement of service of the writ and indicated its intention to defend the claim.

In December 2016, Zhixin took out an application for summary judgment against the Company. The hearing of the summary judgment application took place on 25 October 2017 in which Zhixin’s application was dismissed. The case has now proceeded to the main trial stage.

On 29 January 2018, Zhixin filed its amended statement of claim to allege that it is entitled to 17,500,000 shares of the Company by virtue of an option provided in the Agreement. The Zhixin Case is still in the process of filing pleadings by both parties.

Based on information currently available to the Company, it is not possible to estimate the financial effect of the Zhixin Case. As at 28 February 2021, the Company has not made any provision in respect of the Zhixin Case. The Company will provide an update as and when there is any material development in this matter.

The number of shares disclosed in the Zhixin Case has not considered the effect of share subdivision that became effective on 9 July 2018.

Pledge of Assets

As at 28 February 2021, the Group pledged a total bank deposits of RMB1,562.4 million and certain investment properties with an aggregate carrying amount of RMB335.2 million to certain licenced banks for certain banking facilities.

Material Acquisition and Disposal of Subsidiaries

Save as disclosed above, the Group had no other material acquisition and disposal of subsidiaries during the six months ended 28 February 2021.

Significant Investment Held

As at 28 February 2021, no significant investment was held by the Group.

Employee Benefits

As at 28 February 2021, the Group had 6,623 (as at 29 February 2020: 6,054) full-time employees. The Group provides external and internal training programs to its employees. The Group participates in various employee benefit plans, including provident fund, housing pension, medical, basic pension and unemployment benefit plans, occupational injury and maternity leave insurance. The Company also has a post-IPO share option scheme, a share award scheme, an employee share purchase plan and a pension plan set up for its employees and other eligible persons. Salaries and other benefits of the Groups’ employees are generally reviewed on a regular basis in accordance with individual qualifications and performance, results and performance of the Group and relevant market conditions. Total employee remuneration (including directors’ remuneration) for the six months ended 28 February 2021 amounted to RMB489.3 million (as at 29 February 2020: RMB366.1 million).

MANAGEMENT DISCUSSION AND ANALYSIS

Pension Plan

To ensure the smooth implementation of the Sixth Five-Year Plan, the Group has devised incentive plans aimed at encouraging employees to provide their services to the Group on a long-term basis, and to share the fruits of the Group’s development.

The pension plan is specifically designed for foreign teachers who work in the Group’s schools operated in China. Under this pension plan, every month a sum amounting to 3% of the eligible employee’s monthly salary will be paid by each foreign employee and by the Group respectively, as contribution to the employee’s pension. The Group has entrusted a professional trustee to manage the funds under the pension plan. The leaving employees will receive part or all of the funds paid by the Group according to the number of years of service in the Group.

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 20 to 46, which comprise the condensed consolidated statement of financial position as of 28 February 2021 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 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 ”) issued by the International Accounting Standards Board. 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” issued by the International Auditing and Assurance Standards Board. 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.

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.

Deloitte Touche Tohmatsu

Certified Public Accountants Hong Kong

28 April 2021

2021 INTERIM REPORT 19

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 28 February 2021

==> picture [475 x 552] intentionally omitted <==

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

Six months Six months
ended ended
28 February 29 February
NOTES 2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
Revenue 3 1,096,018 791,813
Cost of revenue (620,326) (440,534)
Gross profit 475,692 351,279
Investment and other income 4 46,632 28,834
Other gains and losses 5 (32,273) 19,091
Marketing expenses (15,867) (15,542)
Administrative expenses (161,739) (102,866)
Finance costs (67,155) (8,125)
Profit before taxation 245,290 272,671
Taxation 6 (23,049) (8,718)
Profit for the period 7 222,241 263,953
Other comprehensive expense for the period:
Items that may be reclassified subsequently to
profit or loss:
Exchange differences arising on the translation
of foreign operations (22,481) (6,618)
Total comprehensive income for the period 199,760 257,335
Profit for the period attributable to:
Owners of the Company 220,921 261,674
Non-controlling interests 1,320 2,279
222,241 263,953
Total comprehensive income attributable to:
Owners of the Company 198,440 255,056
Non-controlling interests 1,320 2,279
199,760 257,335
EARNINGS PER SHARE
Basic (RMB cents) 9 7.44 8.81
Diluted (RMB cents) 9 7.32 8.81
----- End of picture text -----

20 CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 28 February 2021

==> picture [476 x 540] intentionally omitted <==

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

At At
28 February 31 August
NOTES 2021 2020
RMB’000 RMB’000
(Unaudited) (Audited)
Non-current Assets
Property, plant and equipment 10 3,792,863 3,842,542
Right-of-use assets 485,675 503,975
Investment properties 335,186 348,741
Goodwill 11 2,374,148 2,449,342
Other intangible assets 934,121 1,004,663
Deposit paid for acquisition of property
and equipment 7,684 8,996
Books for lease 1,212 1,350
Pledged bank deposits 133,871 132,000
8,064,760 8,291,609
Current Assets
Inventories 12,907 18,487
Deposits, prepayments and other receivables 12 127,222 174,088
Financial assets at fair value through profit or loss 17,750 12,905
Pledged bank deposits 1,428,531 1,412,668
Restricted cash 13 48,640 48,566
Bank balances and cash 916,847 1,310,907
2,551,897 2,977,621
Current Liabilities
Contract liabilities 14 937,005 1,506,002
Lease liabilities 29,656 30,641
Other payables and accrued expenses 15 451,465 628,088
Income tax payable 103,587 116,300
Borrowings 16 1,689,014 2,303,062
3,210,727 4,584,093
Net Current Liabilities (658,830) (1,606,472)
Total Assets Less Current Liabilities 7,405,930 6,685,137
----- End of picture text -----

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED 2021 INTERIM REPORT 21

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 28 February 2021

==> picture [475 x 351] intentionally omitted <==

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

At At
28 February 31 August
NOTES 2021 2020
RMB’000 RMB’000
(Unaudited) (Audited)
Capital And Reserves
Share capital 9,309 9,309
Reserves 4,735,043 4,517,653
Equity attributable to owners of the Company 4,744,352 4,526,962
Non-controlling interests 85,711 96,673
Total Equity 4,830,063 4,623,635
Non-Current Liabilities
Deferred tax liabilities 315,800 333,592
Borrowings 16 1,026,033 1,327,504
Lease liabilities 158,484 170,335
Consideration payable 201,365 203,225
Contingent consideration 26,488 26,846
Convertible bonds 17 847,697 –
2,575,867 2,061,502
7,405,930 6,685,137
----- End of picture text -----

22

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the six months ended 28 February 2021

==> picture [476 x 456] intentionally omitted <==

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

Attributable to owners of the Company
Shares
held for
restricted Share-
share Statutory based Non-
Share Share Other award Translation surplus payment Retained controlling
capital premium reserve scheme reserve reserve reserve profits Subtotal interests Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
(note a) (note b)
At 1 September 2019 (audited) 9,309 1,162,552 (1,540) (23,855) 13,463 251,717 31,106 2,710,151 4,152,903 92,872 4,245,775
– – – – – – –
Profit for the period 261,674 261,674 2,279 263,953
– – – – – – – –
Other comprehensive expense for the period (6,618) (6,618) (6,618)
– – – – – –
Total comprehensive income for the period (6,618) 261,674 255,056 2,279 257,335
– – – – – – – –
Share-based payments 11,040 11,040 11,040
– – – – – – – –
Dividends recognized as distribution (150,656) (150,656) (150,656)
Dividends distributed to the restricted share award
scheme – 1,189 – – – – – – 1,189 – 1,189
Shares vested under restricted share award scheme – – – 425 – – (520) 95 – – –
At 29 February 2020 (unaudited) 9,309 1,013,085 (1,540) (23,430) 6,845 251,717 41,626 2,971,920 4,269,532 95,151 4,364,683
At 1 September 2020 (audited) 9,309 1,013,030 (1,540) (22,280) 15,589 271,740 45,375 3,195,739 4,526,962 96,673 4,623,635
– – – – – – –
Profit for the period 220,921 220,921 1,320 222,241
– – – – – – – –
Other comprehensive expense for the period (22,481) (22,481) (22,481)
– – – – – –
Total comprehensive income for the period (22,481) 220,921 198,440 1,320 199,760
– – – – – – – –
Share-based payments 6,668 6,668 6,668
Acquisition of additional interest in a subsidiary
– – – – – – – –
(note c) 12,282 12,282 (12,282)
At 28 February 2021 (unaudited) 9,309 1,013,030 10,742 (22,280) (6,892) 271,740 52,043 3,416,660 4,744,352 85,711 4,830,063
----- End of picture text -----

2021 INTERIM REPORT 23

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 28 February 2021

Note:

• a Shares held for restricted share award scheme is comprised of shares purchased from open market that are to be used for the share award scheme approved by the directors of the Company on 10 November 2014 (the “ Share Award Scheme ”).

• 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 liability companies and (ii) the development fund of schools.

• (i) For PRC subsidiaries with limited liability, each subsidiary 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, a private school that does not require for reasonable return is required to appropriate to development fund of not less than 25% of the annual increase in 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.

• c During the current period, a non-controlling interest shareholder of a subsidiary of the Group settled its amount due to the subsidiary in exchange of its equity interest in the subsidiary. This transaction is recorded as an equity transaction with the difference of the amount settled and the book value of additional equity interest obtained by the Company recorded as other reserve.

24

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 28 February 2021

==> picture [476 x 536] intentionally omitted <==

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

Six months Six months
ended ended
28 February 29 February
2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
Net cash used in operating activities (238,429) (424,571)
Net cash used in investing activities:
Net cash inflow of consideration adjustment on acquisition of a
–
subsidiary 45,375
Proceeds from disposal of financial assets at fair value through
profit or loss 26,486 1,736,525
Proceeds on disposal of property, plant and equipment 9,657 77
Purchase of property, plant and equipment (141,743) (140,799)
Purchase of financial assets at fair value through profit or loss (30,618) (1,650,800)
Net cash outflow on acquisition of a subsidiary (2,047) (6,750)
Purchase of books for lease (499) (651)
Placement of restricted cash (74) (225)
–
Payments for right-of-use assets (46)
–
Purchase of investment property (10,244)
(93,463) (72,913)
Net cash used in financing activities:
Proceeds on issue of convertible bonds 808,551 –
–
Dividends paid (149,467)
Repayment of borrowings (808,095) (2,428)
Interest paid (39,535) (5,100)
Repayment of leases liabilities (17,394) (10,330)
–
Payment of convertible bonds issuance costs (8,138)
(64,611) (167,325)
Net decrease in cash and cash equivalents (396,503) (664,809)
Cash and cash equivalents at the beginning of the period 1,310,907 2,762,328
Effect of foreign exchange rate changes 2,443 (2,636)
Cash and cash equivalents at end of the period, represented by
bank balances and cash 916,847 2,094,883
----- End of picture text -----

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED 2021 INTERIM REPORT 25

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

1. BASIS OF PREPARATION

The condensed consolidated financial statements of China Maple Leaf Educational Systems Limited (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 and with International Accounting Standard (“ IAS ”) 34 “Interim Financial Reporting” issued by the International Accounting Standards Board.

In preparing the consolidated financial statements, the board of directors (the “ Directors ”) has given careful consideration of the future liquidity of the Group in light of the fact that as at 28 February 2021 the Group had net current liabilities of RMB658,830,000.

The Directors consider that it is appropriate to prepare the condensed consolidated financial statements on the going concern basis taking into accounts the cash flow forecast prepared by the management of the Company and the nature of current liabilities and the Directors expect that operating activities can contribute substantial cash inflow to repay the current liabilities when due.

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.

Other than changes in accounting policies resulting from application of new and amendments to International Financial Reporting Standards (“ IFRSs ”), and application of certain accounting policies which became relevant to the Group, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 28 February 2021 are the same as those followed in the preparation of the Group’s annual financial statements for the year ended 31 August 2020.

Application of amendments to IFRSs

In the current interim period, the Group has applied the Amendments to References to the Conceptual Framework in IFRS Standards and the following amendments to IFRSs issued by the International Accounting Standards Board, for the first time, which are mandatorily effective for the annual period beginning on or after 1 September 2020 for the preparation of the Group’s condensed consolidated financial statements:

Amendments to IAS 1 and IAS 8 Definition of Material Amendments to IFRS 3 Definition of a Business Amendments to IFRS 9, IAS 39 Interest Rate Benchmark Reform and IFRS 7

In addition, the Group has early applied the Amendment to IFRS 16 “Covid-19-Related Rent Concessions”.

Except as described below, the application of Amendments to References to the Conceptual Framework in IFRS Standards and the amendments to IFRSs in the current period has had no material impact on the Group’s financial positions and performance for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.

26

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED 2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the six months ended 28 February 2021

2. PRINCIPAL ACCOUNTING POLICIES (Continued)

• 2.1 Impacts and accounting policies on application of Amendments to IFRS 3 “Definition of a Business”

2.1.1 Accounting policies

Business combinations or asset acquisitions

Optional concentration test

Effective from 1 September 2020, the Group can elect to apply an optional concentration test, on a transaction-by-transaction basis, that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. The gross assets under assessment exclude cash and cash equivalents, deferred tax assets, and goodwill resulting from the effects of deferred tax liabilities. If the concentration test is met, the set of activities and assets is determined not to be a business and no further assessment is needed.

2.1.2 Transition and summary of effects

The amendments had no impact on the condensed consolidated financial statements of the Group.

2.2 Accounting policies newly applied by the Group

In addition, the Group has applied the following accounting policies which became relevant to the Group in the current interim period.

Convertible bonds

Convertible bonds issued by the Company can be converted into the share capital of the Company at the option of the investor.

The Group designates convertible bonds denominated in a currency other than the functional currency of the Company as financial liabilities designated as at fair value through profit or loss (“ FVTPL ”). The convertible bonds are initially recognised at fair value. In the subsequent measurement, the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability is recognised in other comprehensive income, and the remaining amount of change in the fair value of convertible bonds is recognised in profit or loss. Changes in fair value attributable to the convertible bonds’ credit risk that are recognised in other comprehensive income are not subsequently reclassified to profit or loss; instead, they are transferred to retained profits upon derecognition of the convertible bonds.

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED 2021 INTERIM REPORT 27

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

2. PRINCIPAL ACCOUNTING POLICIES (Continued)

2.3 New and amendments to IFRSs in issue but not yet effective

Amendments to IAS 1 Classification of Liabilities as Current or Non-current

The amendments to IAS 1 classification of liabilities as current or non-current which is effective for annual periods beginning on or after 1 January 2023, provide clarification and additional guidance on the assessment of right to defer settlement for at least twelve months from reporting date for classification of liabilities as current or non-current, which:

• Specify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period. Specifically, the amendments clarify that:

• (i) the classification should not be affected by management intentions or expectations to settle the liability within 12 months; and

• (ii) if the right is conditional on the compliance with covenants, the right exists if the conditions are met at the end of the reporting period, even if the lender does not test compliance until a later date; and

• Clarify that if a liability has terms that could, at the option of the counterparty, result in its settlement by the transfer of the entity’s own equity instruments, these terms do not affect its classification as current or non-current only if the entity recognises the option separately as an equity instrument applying IAS 32 Financial Instruments: Presentation.

As at 28 February 2021, the Group’s convertible bonds include counterparty conversion options that do not meet equity instruments classification by applying IAS 32. The Group classified as current or non-current based on the earliest date in which the Group has the obligation to redeem these instruments through cash settlement. The convertible bonds were designated as at FVTPL with carrying amount of RMB847,697,000 as at 28 February 2021 and is classified as non-current as set out in Note 17. Upon the application of the amendments, in addition to the obligation to redeem through cash settlement, the transfer of equity instruments upon the exercise of the conversion options that do not meet equity instruments classification also constitute settlement of the convertible bonds. Given that the convertible options are exercisable on or after 9 March 2021, the convertible bonds designated as at FVTPL would be reclassified to current liabilities as the holders have the option to convert within twelve months.

28

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED 2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the six months ended 28 February 2021

3. REVENUE AND SEGMENT INFORMATION

• 3A. Disaggregation of revenue from contracts with customers:

==> picture [419 x 353] intentionally omitted <==

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

Six months Six months
ended ended
28 February 29 February
2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
Types of goods or services
Tuition and boarding fees 1,013,608 711,601
Sales of textbooks 26,789 30,341
–
Summer and winter camps 3,373
Others 55,621 46,498
1,096,018 791,813
Geographical markets
PRC 765,453 784,032
Overseas 330,565 7,781
1,096,018 791,813
Timing of revenue recognition
Over time 1,024,087 725,764
A point in time 71,931 66,049
1,096,018 791,813
----- End of picture text -----

3B. Operating Segments

Information reported to the Group’s Chief Executive Officer, being the chief operating decision maker (“ CODM ”), for the purposes of resource allocation and assessment of segment performance focuses on types of services provided.

Following the acquisition of Star Readers Pte. Ltd. in Singapore on 26 August 2020, the Group’s international school education business in overseas starts to contribute significant portion of revenue and profits. Starting from this interim period, discrete segment information is developed and reported to the CODM. Specifically, the Group’s reportable segments under IFRS 8 are as follows:

1. PRC Segment

2. Overseas Segment

2021 INTERIM REPORT 29

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the six months ended 28 February 2021

3. REVENUE AND SEGMENT INFORMATION (Continued)

3B. Operating Segments (Continued)

Segment revenues and results

The following is an analysis of the Group’s revenue and results by reportable segments:

PRC Segment Overseas Segment Total	PRC Segment Overseas Segment Total
RMB’000 RMB’000 RMB’000
For the six months ended 28 February 2021 (unaudited) Segment revenue 765,453 330,565 1,096,018 Segment profit 200,076 54,988 255,064 Unallocated items: Directors’ and chief executives’ emoluments (7,340) Corporate administrative expense (2,434) Group’s profit before income tax 245,290
	765453 330565 1096018
	, , ,,
	200076 54988 255064
	, , ,
	(7340)
	, (2434)
	,
	245290
	,
	PRC Segment Overseas Segment Total
	RMB’000 RMB’000 RMB’000
For the six months ended 29 February 2020 (unaudited) Segment revenue 784,032 7,781 791,813 Segment profit 291,923 (5,964) 285,959 Unallocated items: Directors’ and chief executives’ emoluments (8,150) Corporate administrative expense (5,138) Group’s profit before income tax 272,671
	291,923 (5,964) 285,959
	(8,150) (5,138) 272,671

The accounting policies of the operating segments are the same as the Group’s accounting policies. Segment profit represents the profit earned by each segment without allocation of corporate administrative expense and directors’ and chief executives’ emoluments. This is the measure reported to the CODM for the purposes of resource allocation and performance assessment.

30

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

3. REVENUE AND SEGMENT INFORMATION (Continued)

3B. Operating Segments (Continued)

Segment assets and liabilities

The following is an analysis of the Group’s assets and liabilities by reportable segments:

==> picture [419 x 313] intentionally omitted <==

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

At At
28 February 31 August
2021 2020
RMB’000 RMB’000
(Unaudited) (Audited)
Segment assets
PRC segment 6,019,555 6,441,595
Overseas segment 4,597,102 4,827,635
Consolidated assets 10,616,657 11,269,230
At At
28 February 31 August
2021 2020
RMB’000 RMB’000
(Unaudited) (Audited)
Segment liabilities
PRC segment 3,682,826 4,401,066
Overseas segment 2,103,768 2,244,529
Consolidated liabilities 5,786,594 6,645,595
----- End of picture text -----

For the purposes of monitoring segment performance and allocating resources between segments, all assets and liabilities are allocated to operating segments. Assets and liabilities used jointly by operating segments are allocated to the PRC segment as the amount is insignificant.

31

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

4. INVESTMENT AND OTHER INCOME

==> picture [447 x 175] intentionally omitted <==

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

Six months Six months
ended ended
28 February 29 February
2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
Bank interest income 25,328 11,558
Government grant 14,439 7,965
Rental income from investment properties 6,165 9,238
Others 700 73
46,632 28,834
----- End of picture text -----

During the current interim period, the Group recognised government grants of RMB6,223,000 in respect of Covid-19-related subsidies.

5. OTHER GAINS AND LOSSES

==> picture [447 x 247] intentionally omitted <==

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

Six months Six months
ended ended
28 February 29 February
2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
Reversal of other payables 7,113 6,128
Net foreign exchange gain 2,663 533
Gain arising from changes in fair value of financial assets
measured at FVTPL 1,321 20,148
–
Loss arising from fair value changes of convertible bond (40,607)
Loss on disposal of property, plant and equipment (1,495) (82)
Loss arising from fair value changes of contingent
consideration (578) –
–
Impairment loss in respect of property, plant and equipment (7,276)
Others (690) (360)
(32,273) 19,091
----- End of picture text -----

32 CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

6. TAXATION

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

Six months Six months
ended ended
28 February 29 February
2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
The charge comprises
Current tax:
PRC enterprise income tax 11,907 10,552
–
Singapore enterprise income tax 19,648
Deferred tax:
Current period (8,506) (1,834)
23,049 8,718
----- End of picture text -----

33

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

7. PROFIT FOR THE PERIOD

==> picture [447 x 418] intentionally omitted <==

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

Six months Six months
ended ended
28 February 29 February
2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
Profit for the period has been arrived at after charging
(crediting):
Staff costs, including directors’ remuneration
– salaries and other allowances 464,852 339,470
– retirement benefit scheme contributions 17,828 15,546
– share-based payments 6,668 11,040
Total staff costs 489,348 366,056
Gross rental income from investment properties (6,165) (9,238)
Less:
Direct operating expenses incurred for investment
properties (included in administrative expenses) 816 817
(5,349) (8,421)
Depreciation of property, plant and equipment 76,350 43,235
–
Loss arising from fair value changes of convertible bonds 40,607
Amortisation of intangible assets 38,019 5,971
Depreciation of right-of-use assets 19,846 16,242
Depreciation of investment properties 2,025 2,068
Amortization of books for lease 637 831
Loss arising from fair value changes of contingent
consideration 578 –
Covid-19-related rent concessions (410) –
----- End of picture text -----

8. DIVIDENDS

No dividends were paid, declared or proposed during the interim period. The directors of the Company have determined that no dividend will be paid in respect of the interim period.

34

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the six months ended 28 February 2021

9. EARNINGS PER SHARE

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

==> picture [447 x 438] intentionally omitted <==

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

Six months Six months
ended ended
28 February 29 February
2021 2020
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) 220,921 261,674
Effect of dilutive potential ordinary shares:
–
Interest on convertible bonds (net of income tax) 1,586
Earnings for the purpose of diluted earnings per share 222,507 261,674
Six months Six months
ended ended
28 February 29 February
2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
Number of shares:
Weighted average number of ordinary shares for the purpose
of basic earnings per share 2,971,002 2,970,384
Effect of dilutive potential ordinary shares 68,246 5
Weighted average number of ordinary shares for the purpose
of diluted earnings per share 3,039,248 2,970,389
----- End of picture text -----

The number of shares adopted in the calculation of the basic earnings per share for the six months ended 28 February 2021 and 29 February 2020 has been arrived after eliminating the ungranted or unvested shares of the Company held under the Share Award Scheme.

35

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

9. EARNINGS PER SHARE (Continued)

The number of shares adopted in the calculation of the diluted earnings per share for the six months ended 28 February 2021 has been arrived after assuming the conversion of the convertible bonds.

The number of shares adopted in the calculation of the diluted earnings per share for the six months ended 28 February 2021 does not assume the exercise of the Company’s share options because the exercise price of those options was higher than the average market price of shares for the six months ended 28 February 2021.

The number of shares adopted in the calculation of the diluted earnings per share for the six months ended 29 February 2020 has been arrived after assuming the exercise of the Company’s outstanding share options.

10. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT

During the current interim period, the Group disposed of certain property and equipment with an aggregate carrying amount of approximately RMB11,152,000 (for the six months ended 29 February 2020: RMB159,000) for cash proceeds of approximately RMB9,657,000 (for the six months ended 29 February 2020: RMB77,000), resulting in a loss on disposal of approximately RMB1,495,000 (for the six months ended 29 February 2020: RMB82,000).

The Group paid a net cash consideration of RMB141,743,000 to purchase property, plant and equipment (for the six months ended 29 February 2020: RMB140,799,000).

36

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

11. GOODWILL

==> picture [476 x 437] intentionally omitted <==

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

Six months Six months
ended ended
28 February 29 February
2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
Cost and carrying values:
At 1 September 2,449,342 252,848
–
Exchange adjustment (75,194)
At 28 February or 29 February 2,374,148 252,848
12. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
At At
28 February 31 August
2021 2020
RMB’000 RMB’000
(Unaudited) (Audited)
Receivable from third parties 47,132 39,765
Short-term loan to a third party 30,000 30,000
Prepaid rent and other prepaid expenses 12,424 11,042
Deposits 5,986 8,542
Management fees receivables 4,525 12,592
Trade receivables net of allowance for credit losses 2,720 5,841
Interest receivables 1,789 2,019
Staff advances 698 464
–
Consideration adjustment receivable 46,731
Others 21,948 17,092
127,222 174,088
----- End of picture text -----

37

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

12. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES (Continued)

The following is an analysis of trade receivables by age, presented based on the dates the students were informed for payment.

==> picture [447 x 162] intentionally omitted <==

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

At At
28 February 31 August
2021 2020
RMB’000 RMB’000
Not past due 2,312 3,541
0 – 30 days 268 1,019
31 – 60 days – 199
61 – 90 days – 215
>90 days 140 867
2,720 5,841
----- End of picture text -----

13. RESTRICTED CASH

During the years ended 31 August 2019, the Group placed RMB48,561,000 in a bank account managed by both the Group and the seller of the acquisition target in Jiade, therefore the amount deposited is recorded as restricted cash.

14. CONTRACT LIABILITIES

==> picture [447 x 138] intentionally omitted <==

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

At At
28 February 31 August
2021 2020
RMB’000 RMB’000
(Unaudited) (Audited)
Tuition and boarding fees 896,450 1,444,104
Others 40,555 61,898
Contract liabilities 937,005 1,506,002
----- End of picture text -----

Contract liabilities of the Group were expected to be recognized as revenue within one year.

38

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

15. OTHER PAYABLES AND ACCRUED EXPENSES

==> picture [476 x 558] intentionally omitted <==

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

At At
28 February 31 August
2021 2020
RMB’000 RMB’000
(Unaudited) (Audited)
Miscellaneous expenses received from students (Note) 129,077 222,404
Payables for purchase of property, plant and equipment 86,955 153,701
Other payables 65,070 62,558
Accrued payroll 62,070 44,579
Acquisition consideration payable 61,968 64,015
Deposits received from students 27,515 38,588
Accrued operating expenses 8,387 4,784
Payables for purchase of goods 4,550 6,982
Government grant 2,824 5,994
Accrued professional fees for the acquisition 2,186 13,903
Prepayment from lessee 863 4,470
–
Other tax payables 6,110
451,465 628,088
Note: The amount represents miscellaneous expenses received from students and the Group will pay out on their behalf.
16. BORROWINGS
At At
28 February 31 August
2021 2020
RMB’000 RMB’000
(Unaudited) (Audited)
Secured bank borrowings 2,715,047 3,630,566
The carrying amounts of the above borrowings are repayable:
Within one year 1,689,014 2,303,062
Within a period of more than one year but not exceeding
two years 457,846 357,992
Within a period of more than two years but not exceeding
five years 537,724 917,885
Within a period of more than five years 30,463 51,627
2,715,047 3,630,566
Less: Am ounts due within one year shown under current
liabilities (1,689,014) (2,303,062)
Amounts shown under non-current liabilities 1,026,033 1,327,504
----- End of picture text -----

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED 2021 INTERIM REPORT 39

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

16. BORROWINGS (Continued)

The borrowings amounting to SGD23,103,000 and SGD259,713,000 (in aggregate equivalent to RMB1,379,200,000) are secured by pledged bank deposits of RMB132,000,000 of Dalian Educational Group and RMB1,410,025,000 of Beipeng Software.

The borrowings amounting to SGD40,600,000 (equivalent to RMB197,905,000) are mortgaged over an investment property owned by Maple Leaf Education Hillside Pte. Ltd. (“ Maple Hillside ”) of RMB316,397,000, and existing and future legal assignment of rental proceeds, rental deposits and other rights of Maple Hillside.

The borrowings amounting to SGD213,705,000 (equivalent to RMB1,042,015,000) is secured over (1) all the shares of Offshore Group (including Canadian International School Pte. Ltd. (“ CIS ”) and Maple Leaf CIS Holdings Pte. Ltd.); (2) all the assets of the Offshore Group; (3) debt service reserve account held by CIS; (4) dividend accounts (if any); and (5) pledge over all the shares of Beipeng Software.

The borrowings amounting to MYR59,562,000 (equivalent to RMB95,927,000) is secured by pledge of debt service reserve account held by Kingsley International Sendirian Berhad (subsidiaries owned by Kingsley Edugroup Berhad (“ Kingsley ”)) and debenture incorporating fixed and floating charge over all assets and undertakings of Kingsley.

These borrowings carry interest at fixed or variable interest rates range from 0.70% to 4.40% (31 August 2020: 0.70% to 5.58%) per annum.

17. CONVERTIBLE BONDS

Financial liabilities designated at FVTPL:

==> picture [447 x 139] intentionally omitted <==

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

At At
28 February 31 August
2021 2020
RMB’000 RMB’000
(Unaudited) (Audited)
–
Convertible bonds (Note) 847,697
Analysed for reporting purposes as:
Non-current liabilities 847,697 –
----- End of picture text -----

Note:

On 12 January 2021, the Company entered into the subscription agreement with UBS AG Hong Kong Branch (the “ Manager ”) under which the Manager has agreed to subscribe and pay for, or to procure subscribers to subscribe and pay for, the convertible bonds due in 2026 in an aggregate principal amount of USD125,000,000 (the “ Convertible Bonds ”).

40

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

17. CONVERTIBLE BONDS (Continued)

On 27 January 2021 (the “ Issue Date ”), the Company completed the issuance of the Convertible Bonds. The cash proceeds related to the issuance of USD125,000,000 (equivalent to RMB808,551,000) were received by the Company on the Issue Date. The issuance cost related to the Convertible Bonds of approximately USD1,250,000 (equivalent to RMB8,138,000) was charged to the finance cost. The Convertible Bonds were recognized and measured as financial liabilities designated at fair value through profit or loss. The fair value as of the Issue Date and 28 February 2021 were of RMB808,551,000 and RMB847,697,000, respectively (Note 20). The changes in fair value related to the financial liabilities of RMB40,607,000 were charged to other gain and losses.

The Convertible Bonds bear interest on their outstanding principal amount from and including the Issue Date at the rate of 2.25 per cent per annum, payable semi-annually in arrears on 27 January and 27 July in each year, commencing on 27 July 2021.

Pursuant to the subscription agreement, each of the Convertible Bonds will, at the option of the holder, be convertible (unless previously redeemed, converted or purchased and cancelled) on or after 9 March 2021 up to the close of business (at the place where the certificate evidencing the Bonds are deposited for conversion) on the seventh day prior to 27 January 2026 (the “ Maturity Date ”) (both days inclusive) (the “ Conversion Period ”) into fully paid ordinary shares with a par value of USD0.0005 each of the Company at an initial conversion price of HKD2.525 per share. The conversion price is subject to adjustment in the circumstances described under certain terms and conditions of the subscription agreement. The conversion price of the Convertible Bonds as at 28 February 2021 is HKD2.525 per share.

As at 28 February 2021, no conversion related to the Convertible Bonds was exercised by the holders.

On giving notice in accordance with the respective terms and conditions of the subscription agreement, at any time after 11 February 2024 and prior to the Maturity Date, the Convertible Bonds may be redeemed at the option of the Company. The Convertible Bonds may be redeemed at the option of the Company in whole but not in part for taxation reasons as described in the subscription agreement. The Convertible Bonds may be redeemed at the option of the holder following the occurrence of a relevant event described in the subscription agreement or on 27 January 2024 as the optional put date for the holder to request the Company to redeem all or some of the Convertible Bonds upon giving notice in accordance with the subscription agreement.

2021 INTERIM REPORT 41

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

18. SHARE-BASED PAYMENTS

Employee Share Purchase Plan

The Company’s Employee Share Purchase Plan (the “ ESPP ”) was approved and adopted by the Company on 12 October 2020 to take effect for the purpose of providing the selected participants with the opportunity to acquire proprietary interests in the Company and to encourage the selected participants by permitting the selected participants to purchase shares of the Company and by awarding matching restricted shares, which upon vesting are settled in shares.

During the current period, no matching shares under the ESPP were granted.

Post-IPO Share Option Scheme

The Company’s post-IPO share option scheme (the “ Post-IPO Share Option Scheme ”) was approved and adopted by the Company on 10 November 2014 to take effect from 28 November 2014 for the purpose of enabling the Company to grant options to the selected participants as incentives or rewards for their contributions to the Group.

The number of option shares disclosed below has been retrospectively adjusted to reflect the Share Subdivision that became effective on 9 July 2018.

Movements of the Company’s share options granted under the Post-IPO Share Option Scheme during the six months ended 28 February 2021 are as follows:

42

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the six months ended 28 February 2021

18. SHARE-BASED PAYMENTS (Continued)

Post-IPO Share Option Scheme (Continued)

For the six months ended 28 February 2021

==> picture [447 x 301] intentionally omitted <==

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

Outstanding Outstanding
at Forfeited Lapsed at
1 September during the during 28 February
Date of grant Option type 2020 period the period 2021
Executive director
Zhang Jingxia 14 June 2018 Post-IPO-4th 1,200,000 – (400,000) 800,000
James William Beeke 14 June 2018 Post-IPO-4th 600,000 – (200,000) 400,000
Independent non-
executive director
Peter Humphrey Owen 14 June 2018 Post-IPO-4th 415,200 – (138,400) 276,800
Wong Lap Tat Arthur 14 June 2018 Post-IPO-4th 415,200 – (138,400) 276,800
Peter Humphrey Owen 28 June 2019 Post-IPO-6th 246,000 – (62,000) 184,000
Wong Lap Tat Arthur 28 June 2019 Post-IPO-6th 246,000 – (62,000) 184,000
Employees in aggregate 14 June 2018 Post-IPO-5th 19,320,000 (1,820,000) (6,060,000) 11,440,000
28 June 2019 Post-IPO-7th 4,410,000 (290,000) (2,130,000) 1,990,000
Total 26,852,400 (2,110,000) (9,190,800) 15,551,600
Exercisable at the end of
–
the year
----- End of picture text -----

During the current period, no share options under the Post-IPO Share Option Scheme were granted or exercised.

2021 INTERIM REPORT 43

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

19. CONTINGENT LIABILITIES

On 15 November 2016, the Company received a writ of summons from Hong Kong Zhixin Financial News Agency Ltd. (“ Zhixin ”) seeking among other things, specific performance of the consultancy agreement between the Company and Zhixin by the allotment and issue of 7,000,000 shares of the Company to Zhixin, and damages in lieu or in addition thereof (“ Zhixin Case ”). On 28 November 2016, the Company filed with the High Court of the Hong Kong Special Administrative Region its acknowledgement of service of the writ and indicated its intention to defend the claim.

In December 2016, Zhixin took out an application for summary judgment against the Company. The hearing of the summary judgment application took place on 25 October 2017 in which Zhixin’s application was dismissed. The case now has been proceeded to the main trial stage.

On 29 January 2018, Zhixin filed its amended statement of claim to allege that it is entitled to 17,500,000 shares of the Company by virtue of an option provided in the agreement. Zhixin Case is still in the process of filing pleadings by both parties.

Based on information currently available to the Company, it is not possible to estimate the financial effect of the Zhixin Case. As at 28 February 2021, the Company had not made any provision in respect of the Zhixin Case.

The number of shares disclosed above has not considered the effect of Share Subdivision that became effective on 9 July 2018.

44

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the six months ended 28 February 2021

20. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS

Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis.

Some of the Group’s financial assets and financial liabilities are measured at fair value at the end of each reporting period. The following table gives information about how the fair value of these financial assets and financial liabilities are determined (in particular, the valuation technique and inputs used).

==> picture [445 x 379] intentionally omitted <==

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

Fair value as at
28 February 31 August Fair value Valuation techniques Significant unobservable
Financial assets and financial liabilities 2021 2020 hierarchy and key inputs input(s)
Financial assets at FVTPL – Listed equity RMB9,421,000 RMB8,702,000 Level 1 Quoted bid prices in an active market NA
securities
Financial assets at FVTPL – wealth RMB8,329,000 RMB4,203,000 Level 2 Discounted cash flow, future cash flows are NA
management products estimated based on contractual terms of
the wealth management products and
discounted at a rate that reflects that
credit risk of the counterparties
Contingent liabilities in a business – – Level 3 Discounted cash flow method was used Probability of students
combination to capture the present value of the enrollment numbers;
expected future economic benefits Discount Rate
that will flow out of the Group arising
from the contingent consideration
arrangement in relation to the first
tranche, based on an appropriate
discount rate.
Contingent liabilities in a business RMB26,488,000 RMB26,846,000 Level 3 Discounted cash flow method was used Probability profits target and
combination (as included in contingent to capture the present value of the dividends (if any)
consideration) expected future economic benefits
that will flow out of the Group arising
from the contingent consideration
arrangement in relation to the second
tranche transaction of STAR acquisition,
based on an appropriate discount rate.
Convertible bonds issued
by the Group and designated at FVTPL RMB847,697,000 – Level 3 Binomial option pricing model and Expected volatility of 40.0%,
(Note 17) discounted cash flow method Risk free rate of 3.004%,
Dividend yield of 0.00%,
Discount rate: 8.00%
----- End of picture text -----

• Note 1: A slight increase in the discount rate used in isolation would result in a significant decrease in the fair value measurement of the Convertible Bonds, and vice versa. A 1% increase in the discount rate holding all other variables constant would decrease the carrying amount of the Convertible Bonds by RMB12,942,000.

• Note 2: A slight increase in the expected volatility/dividend yield used in isolation would result in a significant increase/decrease in the fair value measurement of the Convertible Bonds, and vice versa. A 1% increase in the volatility holding all other variables constant would increase the carrying amount of the Convertible Bonds by RMB6,471,000. A 1% increase in the dividend yield holding all other variables constant would decrease the carrying amount of the Convertible Bonds by RMB12,942,000.

CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED 2021 INTERIM REPORT 45

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 28 February 2021

20. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Continued)

Reconciliation of Level 3 fair value measurements of financial liabilities

	Contingent consideration in business combinations Convertible bonds
	RMB’000 RMB’000
At 1 September 2020 (audited) Issued Total losses: in profit or loss Exchange adjustments At 28 February 2021 (unaudited)	26,846 – – 808,551 578 40,607 (936) (1,461)
	26,488 847,697

The directors of the Company consider that the carrying amounts of financial assets and financial liabilities recorded at amortized cost in the condensed consolidated financial statements approximate their fair values.

There were no transfers between Level 1 and Level 2 during the current period.

21. RELATED PARTY DISCLOSURES

Compensation of key management personnel

The remuneration of directors and other members of key management of the Group are as follows:

==> picture [447 x 175] intentionally omitted <==

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

Six months Six months
ended ended
28 February 29 February
2021 2020
RMB’000 RMB’000
(Unaudited) (Unaudited)
Short-term benefits 5,834 5,309
Post-employment benefits 9 9
Share-based payments 1,497 2,832
Others 2,304 2,424
9,644 10,574
----- End of picture text -----

46 CHINA MAPLE LEAF EDUCATIONAL SYSTEMS LIMITED

2021 INTERIM REPORT

OTHER INFORMATION

SPECIFIC PERFORMANCE OBLIGATION ON CONTROLLING SHAREHOLDER

On 16 August 2020, the Company (as a guarantor), Maple Leaf CIS Holdings Pte. Limited (as a borrower) and a subsidiary of the Company (as a guarantor) have entered into a facility agreement (the “ Term Loan Facility Agreement ”) with certain lenders pursuant to which the lenders agreed to make available a term loan facility in an aggregate amount up to SGD225,000,000 with a final maturity date being the date which is three years after the utilisation date of the term loan (the “ Term Loan Facility ”). On the same day, the Company (as a borrower), Maple Leaf CIS Holdings Pte. Limited (as a guarantor) and certain subsidiaries of the Company (each as a guarantor) have also entered into a facility agreement (the “ Bridge Loan Facility Agreement ”, together with the Term Loan Facility Agreement, the “ Facility Agreements ”) with certain lenders pursuant to which the lenders agreed to make available a bridge loan facility in an aggregate amount up to SGD158,000,000 with a final maturity date being the date which is 350 days after the utilization date of the bridge loan facility (“ Bridge Loan Utilisation Date ”) assuming the extension option is being exercised pursuant to the Bridge Loan Facility Agreement (or six months after the Bridge Loan Utilisation Date if the extension option is not exercised) (the “ Bridge Loan Facility ”, together with the Term Loan Facility, the “ Facilities ”).

Pursuant to the Facility Agreements, the Facilities must be prepaid (among other matters) if:

• i. Mr. Shu Liang Sherman Jen (“ Mr. Jen ”), chairman and executive director of the Company, does not or ceases to own beneficially at least 45% of each class of the issued share capital of the Company excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital (or at least 40% after a permitted issue of shares pursuant to the Facility Agreements);

• ii. Mr. Jen does not or ceases to have the power to: (a) cast or control of the casting of at least 45% of the maximum number of vote that might be cast at a general meeting of the Company (or at least 40% after a permitted issue of shares pursuant to the respective Facility Agreement); (b) appoint or remove all or majority of the directors or other equivalent officers of the Company; or (c) give directions with respect to the operating and financial policies of the Company;

• iii. Mr. Jen is not or ceases to be the single largest owner of each class of the issued share capital of the Company; and

• iv. Mr. Jen is not or ceases to be the chairman of the Board of the Company,

and in such event the Facilities will be terminated and all outstanding loans under the Facilities may immediately become payable on demand.

Reference are made to the announcements of the Company dated 13 January 2021 and 27 January 2021 concerning the issuance of US$125,000,000 convertible bonds due 2026 under general mandate by the Company. In light of the potential dilution impact of the issuance of the above convertible bonds, the lenders of the Facilities have granted a waiver to reduce Mr. Jen’s ownership requirement under the Facilities Agreements from 45% to 40% such that no change of control will occur if Mr. Jen does not or cease directly or indirectly to have the power to cast or control the casting of at least 40% of the maximum number of votes that might be cast at a general meeting of the Company.

OTHER INFORMATION

INTERIM DIVIDEND

The board of the Company has resolved not to declare an interim dividend for the six months ended 28 February 2021.

CORPORATE GOVERNANCE

The Board is committed to achieving high corporate governance standards. The Board believes that high corporate governance standards are essential in providing a framework for the Company to safeguard the interests of Shareholders and to enhance corporate value and accountability.

Compliance with the Corporate Governance Code

During the six months ended 28 February 2021 and up to the date of this report, the Company has applied the principles as set out in the Corporate Governance Code and Corporate Governance Report (the “ CG Code ”) contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and has complied with all the applicable code provisions, save and except for code provision A.2.1.

Code provision A.2.1 of the CG Code stipulates that the roles of chairman and chief executive officer (“ CEO ”) should not be performed by the same individual. Mr. Jen performs the dual roles of both chairman and CEO. The Board believes that by vesting the roles of both chairman and CEO in the same person, the Company derives the benefit of ensuring consistent leadership within the Group, which in turn enables more effective and efficient overall strategic planning for the 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.

The Board will continue to review and monitor the practices of the Company for the purpose of complying with the CG Code and maintaining a high standard of corporate governance practices within the Company.

Compliance with the Model Code for Securities Transactions by Directors

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (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 during the six months ended 28 February 2021.

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

During the six months ended 28 February 2021, neither the Company nor any of its subsidiaries purchased, sold or redeemed any listed securities of the Company.

OTHER INFORMATION

DIRECTORS’ AND CHIEF EXECUTIVE’S INTEREST AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS

As at 28 February 2021, the interests and short positions of the Directors and the chief executive 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 Securities and Futures Ordinance (“ SFO ”), Chapter 571 of the Laws of Hong Kong) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they have taken, or are deemed to have taken, under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be recorded in the register required to be kept by the Company; or (c) were required, pursuant to the Model Code as set out in Appendix 10 to the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

Long/short positions in Shares and underlying Shares of the Company

==> picture [475 x 40] intentionally omitted <==

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Total interest Approximate
Interest in in Shares and percentage of Long Position/
Name of Director/ chief executive Capacity Interest in Shares underlying Shares underlying Shares shareholding Short Position
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Mr. Jen	Founder of a discretionary trust	1,483,639,818	–	1,483,639,818	49.53%	Long position
	who can influence how the	(Note 1)
	trustee exercises his discretion			95,000,000	3.17%	Short position
				(Note 5)
	Beneficial interest	77,086,850	–	77,086,850	2.57%	Long position
	Interest of spouse	1,342	–	1,342	0.00%	Long position
		(Note 2)
Jingxia Zhang	Beneficial interest	3,511,146	800,000	4,311,146	0.14%	Long position
			(Note 3)
James William Beeke	Interest of controlled corporation	884,000	–	884,000	0.03%	Long position
		(Note 4)
	Beneficial interest	51,342	400,000	451,342	0.02%	Long position
			(Note 3)
Peter Humphrey Owen	Beneficial interest	121,342	460,800	582,142	0.02%	Long position
			(Note 3)
Lap Tat Arthur Wong	Beneficial interest	520,000	460,800	980,800	0.03%	Long position
			(Note 3)

Notes:

1. Sherman Investment Holdings Limited (“ Sherman Investment ”) is a company incorporated in the British Virgin Islands, which is indirectly wholly owned by a discretionary trust. Mr. Jen is the founder of the discretionary trust who can influence how the trustee exercises his discretion, and is deemed to be interested in 1,483,639,818 Shares.

2. Mr. Jen is the spouse of Ms. Meichen Amy Yan (“ Ms. Yan ”) who is interested in 1,342 Shares. Mr. Jen is deemed to be interested in all the Shares in which Ms. Yan is interested by virtue of the SFO.

3. These interests in underlying Shares represent the interests in outstanding options granted pursuant to the Post-IPO share option scheme approved and adopted by the Company on 10 November 2014 (“ Post-IPO Share Option Scheme ”) to subscribe for the relevant number of Shares.

4. These Shares were held by Signum International Educational Services Inc. (“ Signum Services ”), a company which is owned as to 51% by Mr. James William Beeke and 49% by his spouse. Mr. James William Beeke is deemed to be interested in all the Shares held by Signum Services.

5. Pursuant to the Securities Lending Agreement dated 12 January 2021, Sherman Investment has provided securities lending to UBS AG, London Branch (the “ Borrower ”) with an aggregate of up to 330,000,000 Shares upon and subject to the terms and conditions stated in the Securities Lending Agreement. Sherman Investment shall deliver up to 95,000,000 shares of the Company to the Borrower upon request.

OTHER INFORMATION

Interest in associated corporation

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|||||||
|---|---|---|---|---|---|
|Percentage of total|
|issued shares of|
|Name of associated|Number of|the associated|Long Position/|
|Name of Director|corporation|Capacity|issued shares|corporation|Short Position|
|Mr. Jen|Sherman Investment|Founder of a discretionary|50,000|100%|Long position|
|trust who can influence|
|how the trustee exercises|
|his discretion*|

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A discretionary trust has been set up and the entire issued capital of Sherman Investment was transferred from Mr. Jen to Sherman International Investment Limited (“ Sherman Int’l* ”), the shares of which form the assets of a trust, of which Mr. Jen is the Founder.

Save as disclosed above, as at 28 February 2021, none of the Directors or the chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they have taken, or are deemed to have taken, under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be recorded in the register required to be kept by the Company; or (c) were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

SUBSTANTIAL SHAREHOLDERS’ INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY

As at 28 February 2021, the following persons or corporations, other than the Directors or the chief executive of the Company, had interests or short positions in the Shares and underlying Shares as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO:

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Total interest in Shares and Approximate percentage of Long Position/
Name of Shareholder Capacity underlying Shares interest in the Company Short Position
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||||||
|---|---|---|---|---|
|Sherman Investment|Beneficial interest|1,483,639,818|49.53%|Long position|
|(Note 1)|
|95,000,000|3.17%|Short position|
|(Note 5)|
|Sherman Int’l|Interest of controlled|1,483,639,818|49.53%|Long position|
|(Note 2)|corporation|
|95,000,000|3.17%|Short position|
|(Note 5)|
|HSBC International Trustee Limited|Trustee|1,483,639,818|49.53%|Long position|
|(“|HSBC Trustee|”)|
|(Note 3)|
|Ms. Yan|Interest of spouse|1,560,726,668|52.10%|Long position|
|(Note 4)|
|95,000,000|3.17%|Short position|
|(Note 5)|
|Beneficial interest|1,342|0.00%|Long position|
|UBS Group AG|Interest of controlled|159,116,009|5.31%|Long position|
|(Note 6)|corporation|

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OTHER INFORMATION

Notes:

• (1) Sherman Investment is indirectly wholly owned by a discretionary trust, Mr. Jen is the founder of the discretionary trust who can influence how the trustee exercises his discretion. Sherman Investment has a direct beneficial interest in 49.53% of the shareholding of the Company.

• (2) Sherman Int’l owns 100% shareholding in Sherman Investment and is therefore deemed to be interested in all the Shares which Sherman Investment is interested by virtue of the SFO.

• (3) HSBC Trustee is the trustee of a discretionary trust, of which Mr. Jen is the founder, owns 100% shareholding in Sherman Int’l and is therefore deemed to be interested in all the Shares which Sherman Int’l is interested by virtue of the SFO.

• (4) Ms. Yan is the spouse of Mr. Jen and, therefore, Ms. Yan is deemed to be interested in all the Shares and underlying Shares in which Mr. Jen is interested or deemed to be interested by virtue of the SFO. Mr. Jen is interested in: (i) 77,086,850 Shares, and (ii) 1,483,639,818 Shares held by a discretionary trust.

• (5) Pursuant to the Securities Lending Agreement dated 12 January 2021, Sherman Investment has provided securities lending to UBS AG, London Branch (the “ Borrower ”) with an aggregate of up to 330,000,000 Shares upon and subject to the terms and conditions stated in the Securities Lending Agreement. Sherman Investment shall deliver up to 95,000,000 shares of the Company to the Borrower upon request.

• (6) UBS AG, UBS Switzerland AG and UBS Europe SE are the beneficial owners of 139,681,891 Shares, 1,827,999 Shares and 17,606,119 Shares respectively, as at 28 February 2021. Each of UBS AG, UBS Switzerland AG and UBS Europe SE is wholly owned by UBS Group AG. UBS Group AG is deemed to be interested in all the Shares of UBS AG, UBS Switzerland AG and UBS Europe SE in which they are interested by virtue of the SFO.

Save as disclosed above, as at 28 February 2021, no other person or corporation, other than the Directors or the chief executive of the Company, had an interest or short position in the Shares or underlying Shares as recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO.

SHARE INCENTIVE SCHEMES

In order to incentivize our Directors, senior management, other employees and consultants for their contribution to the Group and to attract and retain suitable personnel to our Group, we adopted the PostIPO Share Option Scheme (the “ Post-IPO Share Option Scheme ”) and the restricted share units scheme which was subsequently modified by the Board on 28 April 2015 and renamed as the Share Award Scheme (the “ Share Award Scheme ”)

For details of the terms of the Post-IPO Share Option Scheme and the Share Award Scheme, please refer to the section headed “Share Incentive Schemes” in the report of Directors in our 2020 annual report.

OTHER INFORMATION

Post-IPO Share Option Scheme

The following table discloses movements in the outstanding share options granted to all grantees under the Post-IPO Share Option Scheme during the six months ended 28 February 2021.

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Number of share options
As at 1 Granted Exercised Cancelled Lapsed As at 28
September during the during the during the during the February Exercise Vesting period/
Grantees Date of grant 2020 period period period period 2021 Exercise period/date price date
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Directors Jingxia Zhang 14 June 2018 James William Beeke 14 June 2018 Peter Humphrey Owen 14 June 2018 28 June 2019 Lap Tat Arthur Wong 14 June 2018 28 June 2019 Sub-total Employees in aggregate Sixth tranche 14 June 2018 Seventh tranche 14 June 2018 Eighth tranche 14 June 2018 Eleventh tranche 28 June 2019 Twelfth tranche 28 June 2019 Sub-total Total

400,000 – – – (400,000) – 1 January 2021 – 31 January 2021 HK$7.22 1 January 2021 400,000 – – – – 400,000 1 January 2022 – 31 January 2022 HK$7.22 1 January 2022 400,000 – – – – 400,000 1 January 2023 – 31 January 2023 HK$7.22 1 January 2023 200,000 – – – (200,000) – 1 January 2021 – 31 January 2021 HK$7.22 1 January 2021 200,000 – – – – 200,000 1 January 2022 – 31 January 2022 HK$7.22 1 January 2022 200,000 – – – – 200,000 1 January 2023 – 31 January 2023 HK$7.22 1 January 2023 138,400 – – – (138,400) – 1 January 2021 – 31 January 2021 HK$7.22 1 January 2021 138,400 – – – – 138,400 1 January 2022 – 31 January 2022 HK$7.22 1 January 2022 138,400 – – – – 138,400 1 January 2023 – 31 January 2023 HK$7.22 1 January 2023 62,000 – – – (62,000) – 1 January 2021 – 31 January 2021 HK$3.11 1 January 2021 62,000 – – – – 62,000 1 January 2022 – 31 January 2022 HK$3.11 1 January 2022 62,000 – – – – 62,000 1 January 2023 – 31 January 2023 HK$3.11 1 January 2023 60,000 – – – – 60,000 1 January 2024 – 31 January 2024 HK$3.11 1 January 2024 138,400 – – – (138,400) – 1 January 2021 – 31 January 2021 HK$7.22 1 January 2021 138,400 – – – – 138,400 1 January 2022 – 31 January 2022 HK$7.22 1 January 2022 138,400 – – – – 138,400 1 January 2023 – 31 January 2023 HK$7.22 1 January 2023 62,000 – – – (62,000) – 1 January 2021 – 31 January 2021 HK$3.11 1 January 2021 62,000 – – – – 62,000 1 January 2022 – 31 January 2022 HK$3.11 1 January 2022 62,000 – – – – 62,000 1 January 2023 – 31 January 2023 HK$3.11 1 January 2023 60,000 – – – – 60,000 1 January 2024 – 31 January 2024 HK$3.11 1 January 2024 3,122,400 – – – (1,000,800) 2,121,600 6,440,000 – – (380,000) (6,060,000) – 1 January 2021 - 31 January 2021 HK$7.22 1 January 2021 6,440,000 – – (720,000) – 5,720,000 1 January 2022 - 31 January 2022 HK$7.22 1 January 2022 6,440,000 – – (720,000) – 5,720,000 1 January 2023 - 31 January 2023 HK$7.22 1 January 2023 2,265,000 – – (135,000) (2,130,000) – 1 January 2021 - 31 January 2021 HK$3.11 1 January 2021 2,145,000 – – (155,000) – 1,990,000 1 January 2022 - 31 January 2022 HK$3.11 1 January 2022 23,730,000 – – (2,110,000) (8,190,000) 13,430,000 26,852,400 – – (2,110,000) (9,190,800) 15,551,600

During the current period, no share options under the Post-IPO Share Option Scheme were granted or exercised.

OTHER INFORMATION

Share Award Scheme

During the six months ended 28 February 2021, there was no movement in the outstanding Shares under the Share Award Scheme.

Use of proceeds from the issuance of Convertible Bonds

The net proceeds from the issuance of US$125 million Convertible Bonds due 2026 in January 2021, after deducting underwriting commission and related expenses, amounted to approximately US$123.1 million. The Company intends to use the net proceeds from the Convertible Bonds issuance for repayment of existing borrowings, acquisitions-related expenses and general corporate purposes.

The following table illustrates the intended uses of the net proceeds from the Convertible Bonds issuance and the planned amount for each use:

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US$’million
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Net Proceeds Intended utilization of proceeds Repaying existing borrowings Acquisitions-related expenses and general corporate purpose Total	123.1 119.0 4.1
	123.1

Total

As at 28 February 2021, the Group had utilized all the net proceeds from the Convertible Bonds issuance as set out in the table below, which is consistent with the intentions previously disclosed by the Company.

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Net proceeds Utilization during Unutilized
from the Bonds the period ended balance as at
Use of proceeds issuance 28 February 2021 28 February 2021
US$’million US$’million US$’million
Repaying existing borrowings 119.0 119.0 –
Acquisitions-related expenses and general
corporate purposes 4.1 4.1 –
Total 123.1 123.1 –
----- End of picture text -----

OTHER INFORMATION

AUDIT COMMITTEE

The Audit Committee has reviewed the unaudited consolidated financial statements of the Group for the six months ended 28 February 2021 and has met with the independent auditors, Messrs. Deloitte Touche Tohmatsu who has reviewed the interim financial statements. 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.

PUBLIC FLOAT

The Company has maintained the public float as required by the Listing Rules up to the date of this report.

CHANGES IN DIRECTORS’ INFORMATION

During the reporting period, changes in Directors’ information are set out below:

Mr. Jen ceased to act as an executive Director and the chairman of Kingsley Edugroup Limited, a whollyowned subsidiary of the Company, with effect from 30 December 2020. Kingsley Edugroup Limited was dissolved on 31 March 2021.

Mr. Alan Shaver (“ Mr. Shaver ”) ceased to act as a member and the chairman of the board of directors of Innovate BC, a Canadian British Columbia provincial Crown Agency, with effect from 16 March 2021.

Mr. Shaver was appointed as a member of the Academic Advisory Board of Studiosity, an on-demand study help service provider, on 1 January 2021.

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

By order of the Board China Maple Leaf Educational Systems Limited Shu Liang Sherman Jen Chairman and Chief Executive Officer

Hong Kong, 28 April 2021