NEXTED GROUP LIMITED — Annual Report 2022

Aug 28, 2022

29 AUGUST 2022

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ASX / MEDIA RELEASE

iCOLLEGE’S TRANSFORMATIVE FY22 RESULTS LAYING FOUNDATIONS FOR FURTHER STRONG GROWTH IN FY23

iCollege Limited ( ASX: ICT ) ( iCollege or the Company ), a uniquely positioned provider of tertiary education services to international and domestic students, provides its Preliminary Final Report for the year ended 30 June 2022 (H2 FY22).

Highlights for FY22 included:

• Completing the RedHill Education Limited (RedHill) acquisition which has unlocked annualised cost synergies of over $1.5 million and expanded the Company’s course range, campus network, industry & supply chain relationships, addressable markets and government funding accreditations;

• Record revenues of $46.8 million, up 187% against the previous corresponding period (pcp) (FY21: $16.3m);

• EBITDA (excluding M&A costs) of $3.6 million, up $1.0 million against pcp (FY21: $2.6 million);

• Exceptional operating cash flows (excluding M&A costs) of $17.0 million, up $16.3 million against pcp;

• Strong balance sheet position with $30.2 million cash on hand (including term deposits) at the end of June 2022 to fund future growth; and

• Strong growth in international student lead indicators since Australia’s borders re-opened in December 2021.

Commenting on the results, iCollege CEO, Glenn Elith said:

“iCollege has experienced strong growth in FY22 due to the successful integration of the RedHill acquisition and ability to quickly leverage our capabilities and industry reputation to re-ignite international student revenues since Australia’s borders re-opened in late December 2021.

The number of international students studying our English language courses has already grown to well above pre-COVID levels, and lead indicators suggest that a high rate of growth will continue in FY23 as we continue to recruit new students and current students progress with their studies.

We have pleasing positive operating cashflows and a strong balance sheet to support our bold growth objectives for FY23.”

FY22 results presentation

iCollege is pleased to invite shareholders to attend a FY22 Results Presentation videoconference today at 11:00am (AEST) being hosted by the iCollege CEO and CFO, Glenn Elith and Michael Fahey.

Participants will be required to register their attendance using the following Zoom link: - https://us02web.zoom.us/webinar/register/WN_lK HUrH2RnCyHMCm1BZdWA

This announcement has been approved for release by the Board of iCollege.

For further information:

Glenn Elith Lisa Jones Chief Executive Officer Company Secretary glenn.elith@icollege.edu.au lisa.jones@icollege.edu.au

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APPENDIX 4E

FOR THE YEAR ENDED 30 JUNE 2022

1	REPORTING PERIOD
	Report for the period ended:		Year ended 30 June 2022
	Previous corresponding period:		Year ended 30 June 2021
2	RESULTS FOR ANNOUNCEMENT TO THE MARKET	Year ended 30 June 2022 $’000	Year ended 30 June 2021 $’000	Change %
2.1	Revenues from ordinary activities	46,819	16,277	187% increase
	Profit / (loss) from ordinary activities
2.2	after tax attributable to members	(8,652)	308	2,909% decrease
2.3	Profit / (loss) from ordinary activities	(8,695)	308	2,923% decrease
			Amount per	Franked amount
			security	per security
2.4	Dividends		¢	%
	Interim dividend		Nil	n/a
	Final dividend		Nil	n/a
2.5	Record date for determining entitlements to the dividend		n/a
			Year ended	Year ended
			30 June 2022	30 June 2021
			$’000	$’000
3	Earnings / (losses) for the period attributable to owners of the parent entity		(8,695)	308
	Net assets		61,568	1,987
	Less: Intangible assets		(65,559)	(2,230)
	Less: Right of use assets		(17,699)	(3,199)
	Add: Deferred tax liabilities		5,045	622
	Net tangible assets / (liabilities)		(16,645)	(2,820)
			Number	Number
	Fully paid ordinary shares		1,095,383,863	581,564,649
			¢	¢
	Net tangible assets / (liabilities) backing per share		(1.5)	(0.5)

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1. Details of entities over which control has been gained or lost during the period

2. 4.1 Name of entities

RedHill Education Limited and its consolidated entities (RedHill)

• 4.2 Date of gain of control 1 October 2021

• 4.3 Contribution to consolidated profit / (loss) from ordinary activities after tax by the controlled entities to the date in the current period when control was gained

($3,827,000)

This amount included $3,125,000 of depreciation and amortisation expense related to intangible assets acquired ($1,488,000) and right of use assets revalued ($1,637,000) as upon finalisation of the acquisition accounting of RedHill.

		Date payable	Amount per security	Franked amount per security
5.	Dividends		¢	%
	Interim dividend	N/A	Nil	N/A
	Final dividend	N/A	Nil	N/A

1. Dividends and returns to shareholders including distributions and buy backs

Nil

1. The financial information provided in this Appendix 4E is based on the Preliminary Financial Report for the year ended 30 June 2022 (attached), which has been prepared in accordance with Australian Accounting Standards.

2. The financial statements for the year ended 30 June 2022 are in the process of being audited, and no material adjustments or qualifications are expected.

3. Commentary on results.

Highlights for FY22 included:

• Completing the RedHill acquisition which unlocked annualised cost synergies of over $1.5 million and expanded iCollege’s course range, campus network, industry & supply chain relationships, addressable markets and government funding accreditations;

• Record revenue of $46.8 million, up 187% against the previous corresponding period (pcp) (FY21: $16.3m);

• EBITDA (excluding M&A costs) of $3.6 million, up $1.0 million against pcp (FY21: $2.6 million);

• Exceptional operating cash flows (excluding M&A costs) of $17.0 million, up $16.3 million against pcp;

• Strong balance sheet position with $30.2 million cash on hand at the end of June 2022 (including term deposits of $3.1 million) to fund future growth; and

• Strong recovery in international student revenue lead indicators since Australia’s borders reopened in December 2021.

2

Greenwich Segment

Greenwich operating segment revenues in FY22 were $17.8 million for the period post acquisition of RedHill. Greenwich English language course revenues were $6.4 million, and Greenwich vocational management course revenues were $11.4 million. Vocational student numbers and revenues grew in FY22 against pcp due to students choosing to remain in Australia and continue studying while international borders were closed.

English language student numbers started materially increasing in 2H22 when Australia’s borders reopened to international students, and English language revenues are expected to be a larger proportion of the revenue mix in FY23.

Technology & Design Segment

Technology & Design operating segment revenues in FY22 were $10.3 million for the period post acquisition of RedHill. Revenues in the period were impacted by international border closures and other COVID-19 pandemic impacts affecting student study patterns.

Go Study Australia Segment

Go Study Australia operating segment revenues in FY22 were $3.4 million for the period post acquisition. Offshore offices contributed approximately 25% of revenues in the period, down from pre-COVID levels of approximately 40% of total revenues. Offshore revenues are expected to grow strongly in FY23.

Sero / Celtic / CTI (SCC) Segment

SCC operating segment revenues in FY22 were $15.9 million, a reduction of $0.4 million against pcp. Domestic student revenues increased by 12% against pcp due to strong growth in Celtic healthcare courses (which grew 58%).

Sero international student revenues declined 18% against pcp due to Australian international borders being closed until the end of December 2021.

CTI revenues declined 25% in FY22 against pcp, with student enrolments and progression constrained by construction industry workforce shortages (students prioritising practical, on-site work over study).

Segment results declined against pcp due to increased marketing spend and labour costs in anticipation of revenue growth. Spending was reduced during 2H22 to reflect trading conditions.

3

Non-IFRS information

iCollege reports EBITDA in addition to the Profit after Tax. EBITDA is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and represents the statutory profit under AAS adjusted for specific non-cash and significant items. The Company’s directors consider EBITDA to reflect the core earnings of the consolidated entity. A reconciliation between EBITDA and profit after income tax for the year ended 30 June 2022 is noted below.

Financial performance

Financial results

	Year ended 30	Year ended 30
	June 2022	June 2021
	$’000	$’000
Revenue from operations	46,819	16,277
EBITDA	343	2,021
Net profit / (loss) after tax	(8,695)	308
Cash flows from operations incl. M&A	11,200	684
Cash flow from operations excl. M&A	17,000	684

EBITDA / (EBITDA loss) reconciliation

EBITDA / (EBITDA loss) reconciliation
Net profit / (loss) after tax Add back: Depreciation & amortisation Finance costs Less: Income tax benefit EBITDA Add back abnormal expenses: Merger and acquisition costs EBITDA excluding M&A costs	Year ended 30 June 2022 $’000 Year ended 30 June 2021 $’000
	(8,695) 308 7,764 1,437 1,776 392 (502) (116)
	343 2,021
	3,242 605
	3,585 2,626

10. Attachments

The Preliminary Financial Report of iCollege Limited for the year ended 30 June 2022 is attached.

11. Signed

As authorized by the Board of Directors:

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William Deane Non-executive director Chair of the Audit & Risk Management Committee

Date: 29 August 2022

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iCollege Limited and its Controlled Entities ABN 75 105 012 066

Preliminary Financial Report for the Year Ended 30 June 2022

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CORPORATE DIRECTORY

Directors

Catherine (Cass) O’Connor – Independent non-executive chair (appointed 29 July 2022) Simon Tolhurst – Independent non-executive director (Independent chairman until 29 July 2022) William Deane – Independent non-executive director (appointed 8 November 2021) Sandra Hook – Independent non-executive director (appointed 8 November 2021) Ashish Katta – Non-executive director (resigned 29 July 2022) Badri Gosavi – Executive director (resigned 29 July 2022)

Company Secretary Lisa Jones

Registered Office Level 2, 7 Kelly Street Ultimo NSW 2007 Telephone: +61 (02) 8355 3820 Email: investors@icollege.edu.au Website: www.icollege.edu.au

Auditor Hall Chadwick WA Audit Pty Ltd 283 Rokeby Road Subiaco WA 6008 Telephone: +61 (08) 9426 0666

Share Registry Advanced Share Registry Ltd 110 Stirling Highway Nedlands WA 6009 Telephone: +61 (08) 9389 8033 Toll Free: 1300 113 258 Fax: +61 (08) 6370 4203 Email: admin@advancedshare.com.au Website: https://www.advancedshare.com.au

Securities Exchange ASX Code: ICT Australian Securities Exchange Level 40, Central Park 152-158 St Georges Terrace Perth WA 6000 Telephone: 131 ASX (131 279) – within Australia Telephone: +61 (02) 9338 0000 Website: www.asx.com.au

ASIC Registrations ACN: 105 012 066 ABN: 75 105 012 06

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2022

Note	30 June 2022 $’000 30 June 2021 $’000
Revenue from continuing operations 2a Cost of sales Gross profit Other income 2b Interest revenue 2b Salaries and employee benefits expense Depreciation and amortisation expense 4 Impairment of assets 9 Impairment of receivables Property and occupancy costs Professional and consulting fees Marketing expenses Public company related costs Mergers and acquisition costs Other expenses Finance costs 4 Profit / (loss) before tax Income tax benefit 5 Net profit / (loss) for the year Other comprehensive income for the year net of tax Total comprehensive income attributable to members of the parent entity Earnings per share: Basic and diluted profit / (loss) per share (cents per share) 29	46,819 16,277 (18,085) (7,239)
	28,734 9,038 1,482 918 9 1 (16,280) (3,506) (7,764) (1,437) (120) - (617) (265) (2,199) (1,586) (327) (1,437) (2,830) (759) (890) (288) (3,242) (605) (2,118) (749) (1,776) (392)
	(9,197) 192
	502 116
	(8,695) 308 43 -
	(8,652) 308
	(0.94) 0.05

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 30 JUNE 2022

Note

30 June 2022 $’000 30 June 2021 $’000

Current assets Cash and cash equivalents 6 Trade receivables 7 Inventories 8 Prepayments and other assets 9 Total current assets Non-current assets Property, plant and equipment 10 Right-of-use asset 11 Intangible assets 14 Prepayments and other assets 9 Total non-current assets Total assets Current liabilities Trade and other payables 15 Contract liabilities 16 Borrowings 17 Lease liabilities Employee benefits 12 18 Provisions 13 Total current liabilities Non-current liabilities Borrowings 17 Deferred tax liabilities Employee benefits Provisions 19 18 13 Lease liabilities 12 Total non-current liabilities Total liabilities Net assets Equity Issued capital 20 Reserves 21 Accumulated losses Total equity

27,161 4,549 7,355 652 174 179 7,309 1,033 41,999 6,413 6,383 515 17,699 3,199 65,559 2,230 3,050 478 92,691 6,422 134,690 12,835 10,665 3,307 30,652 1,614 138 1,126 5,375 2,222 389 361 397 - 49,449 6,797 224 224 5,045 131 2,625 622 - - 15,648 3,205 23,673 4,051 73,122 10,848 61,568 1,987 102,427 34,194 3,122 3,079 (43,981) (35,286) 61,568 1,987

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2022

Note	Contributed equity Accumulated losses Share- based payments reserve Foreign currency translation reserve Total equity
	$’000 $’000 $’000 $’000 $’000
Balance at 1 July 2021 Profit / (loss) for the year Other comprehensive income for the year Total comprehensive income for the year Transactions with owners Shares issued at net cost 20 Balance as at 30 June 2022	34,194 (35,286) 3,079 - 1,987 - (8,695) - - (8,695) - - - 43 43
	- (8,695) - 43 (8,652) 68,233 - - - 68,233
	102,427 (43,981) 3,079 43 61,568

Note	Contributed equity Accumulated losses Share- based payments reserve Foreign currency translation reserve Total equity
	$’000 $’000 $’000 $’000 $’000
Balance at 1 July 2020 Profit for the year Total comprehensive income for the year Transactions with owners Shares issued at net cost 20 Options issued at fair value Balance as at 30 June 2021	29,986 (35,594) 1,957 - (3,651) - 308 - 308
	- 308 - - 308 4,208 - - 4,208 - - 1,122 - 1,122
	34,194 (35,286) 3,079 - 1,987

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2022

Note	30 June 2022 $’000 30 June 2021 $’000
Cash flows from operating activities Receipts from customers Receipts from government (JobKeeper / JobSaver) 2(b) Interest (paid) / received Payment to suppliers and employees Payments related to mergers and acquisitions Net cash from operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for intangibles Cash acquired upon the acquisition of RedHill Net cash provided by / (used in) investing activities Cash flows from financing activities Repayment of borrowings Proceeds from borrowings Repayments of security deposits Proceeds from issue of shares net of issue costs Repayment of finance lease liabilities over IT equipment Repayment of lease liabilities – interest component Repayment of lease liabilities – principal component Net cash provided by / (used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 6	63,781 13,813 1,482 811 (80) (14) (48,170) (13,926) (5,813) -
	11,200 684
	(2,271) (656) 21,343 (380) - -
	18,416 (380)
	(583) 95 (291) (645) - (361) - 5,114 (16) - (1,687) (4,522) (225) (483)
	(7,004) 3,400
	22,612 3,704 4,549 845
	27,161 4,549

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2022

Changes in classification of amounts following the acquisition of RedHill Education Limited

Following the acquisition of RedHill Education Limited (RedHill) on 1 October 2021, the accounting policies of both organisations have been reviewed and aligned. This has resulted in some changes in classification of certain income statement, balance sheet and cash flow statement accounts and these changes have been reflected in the prior comparative period. There has been no change in the net assets or net profit or net movement in cash and cash equivalents of the organisation in the prior period.

NOTE 1. ACQUISITION OF SUBSIDIARY

Acquisition of RedHill Education Limited

On 1 October 2021, iCollege Limited (iCollege) announced to the ASX that the Off-market Takeover Offer for RedHill became unconditional given the iCollege interest in RedHill exceeded 90% which represented the minimum acceptance condition. iCollege then proceeded with the compulsory acquisition of any RedHill shares that it did not own in accordance with the Corporations Act. Following completion of the compulsory acquisition process, iCollege owns all of the issued share capital of RedHill and RedHill became a wholly owned subsidiary of iCollege.

RedHill delivers vocational and higher education courses in English language, digital technologies, and interior design to over 20,000 domestic and international students each year and operates an international student advisory and recruitment agency. The organization operates a number of specialist businesses in the private tertiary education market in Australia.

Total consideration of the transaction is calculated as follows:

52,344,897 (total RDH shares) x 9.5) * $0.135 = $67,132,339

On 1 October 2021 the total Net Assets for RedHill Education Limited was $1,585,058

The initial accounting for the acquisition of RedHill was provisionally determined at the end of the halfyear with total goodwill arising on the transaction calculated as follows: $67,132,339 - $1,585,058 = $65,547,281.

At the date of finalisation of this year’s financial report, the necessary market valuations and other calculations had been finalised and the fair value of the acquired assets and liabilities noted above have been determined as per AASB 3 and AASB 138 performed by an independent party.

The provisional and final fair value of the identifiable assets and liabilities of RedHill as at the date of acquisition is shown in the table below:

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

	Note	Fair value recognised on acquisition - provisional	Adjustments to provisional fair value	Fair value recognised on acquisition - final
Assets Cash and cash equivalents Trade receivables Prepayments Right-of-use assets Property, plant and equipment Other intangible assets Brand names Training materials Agent relationship Total assets Liabilities Trade and other payables Contract liabilities Lease liabilities Employee benefits Provisions Deferred tax liabilities Total liabilities Net assets Goodwill arising on acquisition Purchase consideration Issue of shares Analysis of cash flows on acquisition Net cash acquired Cash paid Net cash outflow	14 20	$'000s 21,343 6,474 3,870 9,155 3,194 709 - - - 44,745 (7,199) (14,030) (18,714) (1,950) (1,267) - (43,160) 1,585 65,547 67,132 67,132 21,343 - -	$'000s - - - 6,062 1,724 (709) 9,562 7,993 8,432 33,064 - - - - (1,336) (4,928) (6,264) 26,800 (26,800) - - - - -	$'000s 21,343 6,474 3,870 15,217 4,918 - 9,562 7,993 8,432 77,809 (7,199) (14,030) (18,714) (1,950) (2,603) (4,928) (49,424) 28,385 38,747 67,132 67,132 21,343 - -

On 25 October 2021 a total of 467,245,747 ordinary shares were issued as part of a transaction previously announced to the market on 1 October 2021. A further 30,030,841 ordinary shares were issued upon completion of the compulsory acquisition process on 4 November 2021.

The acquisition was a 100% scrip-based transaction with the purchase price being funded via the issuance of iCollege shares in exchange for RedHill shares. The only cash flows associated with the acquisition were transaction related costs including legal fees, fees payable to advisors and related costs which totalled $3.3 million in the year ended 30 June 2022. Payments of merger related costs of $5.8 million have been included in the statement of cash flows. The difference between expenses and cash flows is mainly due to payments to advisors to RedHill accrued as at 1 October 2021 and paid subsequently.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

Goodwill is attributed to the expected synergies and other benefits from combining the activities of RedHill to the Group. An allocation of intangibles has been undertaken with $9,562,000 allocated to Brand Names, $7,993,000 allocated to Training Materials, $8,432,000 allocated to Agent Relationships and the remainder, $38,747,000, allocated to Goodwill (refer to Note 14).

Revenue generated from the RedHill acquisition for the period from acquisition to 30 June 2022 was $30.9 million.

At the date of acquisition, RedHill had cash on hand of $21.3 million, plus term deposits in support of bank guarantees of $2.5 million.

No additional costs were incurred in relation to the issue of shares associated with the acquisition of RedHill.

NOTE 2 REVENUE AND OTHER INCOME

OTE 2 REVENUE AND OTHER INCOME
a. Revenue Tuition related revenue Commission revenue Revenue from contracts with customers Geographical regions Australia Europe South America Timing of revenue recognition Goods transferred at a point in time Services transferred over time b. Other Income JobKeeper & ATO Cash Flow Boost NSW JobSaver scheme Interest income		30 June 2022 $’000	30 June 2021 $’000
		44,043 2,776	16,277 -
		46,819	16,277
		46,819 46,044 682 93 46,819 2,776 44,043 46,819 - 1,482 9	16,277 16,277 - - 16,277 - 16,277 16,277 918 - 1
		1,491	919

The New South Wales Government’s JobSaver scheme was an incentive to help maintain employee headcount and provide cash flow support to businesses. Under the scheme, government subsidies of $1,482,000 (FY21: nil) were received. The consolidated entity became eligible for payments during the current year and payments ceased in December 2021. The amounts received have been recognised as other income in the consolidated statement of profit or loss.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 3. OPERATING SEGMENTS

Identification of reportable operating segments

The consolidated entity is organised into four operating segments: Technology & Design, Greenwich, Go Study and Sero/Celtic/CTI. These operating segments are based on the internal reports that are reviewed and used by the Chief Executive Officer who is identified as the Chief Operating Decision Maker (CODM) in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments.

The CODM reviews both adjusted earnings before interest, tax, depreciation, and amortisation (‘EBITDA’) and profit before income tax. The information reported to the CODM is on at least a monthly basis.

Types of products and services

The principal products and services of each of these operating segments are as follows:

Technology & Design A provider of face-to-face and online courses in information technology, digital design, interactive multimedia, computer coding, digital marketing, games and apps programming, and interior design. Greenwich An Australian provider of English Language Intensive Courses for Overseas Students (‘ELICOS’), and Vocational Education and Training (‘VET’) courses for overseas students. Go Study An international student advisory recruitment agency with offices in Australia (Sydney, Melbourne, Brisbane, Gold Coast, Perth), Europe (Spain, France, Italy) and South America (Colombia, Chile). Sero/Celtic/CTI An Australian provider of face-to-face and online VET courses to both domestic and international students. Courses cover Commercial Cookery, Hospitality, Business, Community Services, Healthcare, Construction, ELICOS, and Information Technology.

Intersegment transactions

Intersegment transactions were made at market rates. Intersegment transactions are eliminated on consolidation.

Intersegment receivables, payables and loans

Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable and loans payable that earn or incur non-market interest are not adjusted to fair value based on market interest rates. Intersegment loans are eliminated on consolidation.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

Year ended 30 June 2022 Segment income Revenue from customers Intersegment revenue Other income Government grants Total income Segment operating result Cost of goods sold Depreciation and amortisation Salaries and employee costs Finance costs Impairment of assets Impairment of receivables Property and occupancy costs Professional and consulting Marketing expenses Public company related costs Mergers and acquisition costs Other expenses Profit/(loss) before income tax Income tax expense Profit/(loss) after income tax 30 June 2022 Segment assets and liabilities Segment assets Segment liabilities Net assets	Technology & Design Greenwich Go Study Sero/Celtic/ CTI Intersegment / elimination / unallocated	Total
	$’000 $’000 $’000 $’000 $’000	$’000
	10,345 17,752 2,775 15,868 79 611 (611) 3 (6) 9 - 3 - - - - 1,482	46,819 - 9 1,482
	10,348 17,746 3,395 15,868 953	48,310
	2,241 5,759 46 1,032 1,485 - - - - - (1,722) (2,122) (46) (844) (3,030) - - - - (5,189) - - - - (1,776) - - - - (120) - - - - (2) - - - - 8 - - - - (1,085) - - - - (122) - - - - (887) - - - - (3,242) - - - - 419 519 3,637 - 188 (13,541) 15,163 48,801 4,923 10,481 55,322 13,198 37,282 1,552 9,462 11,628	10,563 - (7,764) (5,189) (1,776) (120) (2) 8 (1,085) (122) (887) (3,242) 419 (9,197)
		502
		(8,695)
		134,690 73,122
	1,965 11,519 3,371 1,019 43,694	61,568

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

Year ended 30 June 2021 Segment income Revenue from customers Other income Finance income ATO Cash Flow Boost JobKeeper subsidy EMDG income Total income Segment expenses Cost of goods sold Finance costs Depreciation and amortisation Net other costs Total expenses Segmented profit / (loss) before income tax 30 June 2021 Segment assets and liabilities Reportable segment assets Reportable segment liabilities Net assets	Financing Education services Consolidated
	$’000 $’000 $’000
	- 16,290 16,290 - - - - 1 1 - 252 252 - 684 684 - 32 32
	- 17,259 17,259
	- (7,824) (7,824) (80) (312) (392) (624) (812) (1,436) (1,978) (5,437) (7,415)
	(2,682) (14,385) (17,067)
	(2,682) 2,874 192
	4,785 7,773 12,558 3,019 7,552 10,571
	1,766 221 1,987

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 4. EXPENSES

OTE 4. EXPENSES
Profit / (loss) before tax includes the following specific expenses: Depreciation Leasehold improvements Plant and equipment Land and buildings right-of-use assets Office equipment right-of-use assets Amortisation Licensed operation Course materials Training materials Agent relationship Total depreciation and amortisation Finance costs Unwind of the discount of provisions Interest and finance charges paid/payable on lease liabilities Other interest charges Finance costs expensed Leases Short-term lease payments Low-value assets lease payments Total short term and low value lease payments Superannuation expense Defined contribution superannuation expense	30 June 2022 $’000 30 June 2021 $’000
	718 - 603 67 4,374 754 8 - 564 616 9 - 856 - 632 -
	7,764 1,437 161 - 1,526 225 89 167
	1,776 392 582 4 56 -
	638 4 1,981 515

Additional information on depreciation and amortisation expense

Following the completion of the acquisition accounting for the RedHill acquisition changes were recorded in the values of both intangible assets and right-of-use assets to reflect their fair value on the date of acquisition. These changes have resulted in additional depreciation and amortisation expense in FY22.

Identified intangible assets have been recognised on the balance sheet and are being amortised over their useful lives. Total amortisation of these intangibles in FY22 were $1.5 million. For further details, refer to Note 14.

Right-of-use assets previously impaired were revalued by $6.0 million effective from the date of acquisition. Total depreciation of these assets in FY22 were $1.7 million. For further details, refer to Note 11.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 5. INCOME TAX

NOTE 5. INCOME TAX
	Note	2022 $	2021 $
a. Income tax expense
Deferred tax	19	(502)		(116)
		(502)		(116)
b. Reconciliation of income tax expense to prima facie tax payable
The prima facie tax payable / (benefit) on profit / (loss) from ordinary
activities before income tax in reconciled to the income tax expense as
follows:
Accounting profit / (loss) before tax		(9,197)		192
Prima facie tax on operating profit / (loss) at 25% (2021: 26%)		(2,299)		50
Add / (less) tax effect of:
▪ Other non-deductible expenses		882		19
▪ Non assessable income		-		(66)
▪ Impact from change in tax rate on unrecognised DTAs		18		222
▪ Deferred tax assets relating to tax losses not recognised		2,085		(125)
▪ Other temporary differences not recognised		(1,188)		99
▪ Benefit from movement in temporary difference		-		(315)
Income tax expense / (benefit) attributable to operating loss		(502)		(116)
c. Weighted average effective tax rate
		%		%
The applicable weighted average effective tax rates attributable to
operating profit are as follows:		25.00%	(60.16%)
The tax rates used in the above reconciliations is the corporate tax	rate of
25% payable by the Australian corporate entity on taxable profits under
Australian tax law. The tax rate used in the previous reporting period was
26%.
Current tax assets
Income tax receivable		-		-
d. Balance of franking account at year end of the parent		1,506		nil
e. Current tax liabilities
Income tax payable		-		-
NOTE 6. CASH AND CASH EQUIVALENTS
	30	June 2022	30 June	2021
		$’000	$’000
a. Current
Cash at bank		27,161	4,549

14

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

OTE 7. TRADE AND OTHER RECEIVABLES a. Current Trade receivables Less: Allowance for expected credit losses OTE 8. INVENTORIES a. Current Linguaskills bundles OTE 9. PREPAYMENTS AND OTHER ASSETS a. Current Bank guarantees and other deposit Prepayments Deferred agent costs Other current assets b. Non-current Bank guarantees and term deposits Total prepayment and other assets	27,161 4,549
	30 June 2022 30 June 2021
	$’000 $’000
	8,595 940 (1,240) (288)
	7,355 652
	30 June 2022 30 June 2021
	$’000 $’000
	174 179
	174 179
	30 June 2022 30 June 2021
	$’000 $’000
	522 193 543 105 4,795 - 1,449 735
	7,309 1,033
	3,050 478
	3,050 478
	10,359 1,511

NOTE 7. TRADE AND OTHER RECEIVABLES

NOTE 8. INVENTORIES

NOTE 9. PREPAYMENTS AND OTHER ASSETS

Impairment of other non-current assets

At 30 June 2021 $120,000 related to a proposed acquisition was included in non-current other assets. This proposed transaction was not completed, and this amount has been written off.

15

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 10. PROPERTY, PLANT, AND EQUIPMENT

Building improvements Accumulated depreciation Plant and equipment Accumulated depreciation Computer equipment Accumulated depreciation Motor vehicles Accumulated depreciation Assets under construction – at cost Total property, plant, and equipment	30 June 2022 30 June 2021
	$’000 $’000
	3,837 93 (770) (52)
	3,067 41
	1,858 832 (849) (504)
	1,009 328
	909 137 (315) (75)
	594 62
	247 136 (70) (52)
	177 84
	1,536 0
	6,383 515

Movements in carrying amounts

Carrying amount at 1 July 2021 RedHill acquisition Additions Transfers in & (out) Depreciation expense Carrying amount at 30 June 2022 Carrying amount at 1 July 2020 Additions Transfers in & (out) Depreciation expense Carrying amount at 30 June 2021	Building improvements Plant and equipment Computer equipment Motor vehicles Assets under construction Total $’000 $’000 $’000 $’000 $’000 $’000 41 328 62 84 - 515 3,444 982 492 - 4,918 189 43 280 111 1,648 2,271 111 1 - - (112) - (718) (345) (240) (18) - (1,321) 3,067 1,009 594 177 1,536 6,383 38 61 25 28 - 152 9 291 65 65 - 430 - - - - - - (6) (24) (28) (9) - (67)
	41 328 62 84 - 515

16

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 11. RIGHT-OF-USE ASSETS

OTE 11. RIGHT-OF-USE ASSETS
Non-current assets Land and buildings – right-of-use Less: Accumulated depreciation Office equipment – right-of-use Less: Accumulated depreciation	30 June 2022 30 June 2021
	$’000 $’000
	23,505 (5,824) 4,649 (1,450)
	17,681 3,199
	26 - (8) -
	18 -
	17,699 3,199

Depreciation expense

Following the finalisation of the acquisition accounting for the RedHill acquisition (refer Note 1), right-ofuse assets that were previously impaired by RedHill have been revalued by $6.0 million.

Acquired right of use assets have been amortised since their acquisition date of 1 October 2021. Total depreciation expense attributable to the revalued right of use assets in FY22 was $1.7 million.

NOTE 12. LEASE LIABILITIES

Current Lease liabilities Non-current Lease liabilities	30 June 2022 30 June 2021
	$’000 $’000
	5,375 389
	5,375 389
	15,648 3,205
	21,023 3,594

The remaining contractual maturities of lease liabilities is outlined below.

Average interest rate % 2022 Undiscounted lease payments 10.25% 2021 Undiscounted lease payments 12.42%	Less than 1 year Between 1 year and 2 years Between 2 years and 7 years Total contractual maturity $’000 $’000 $’000 $’000 7,074 5,493 13,419 25,986
	857 837 3,795 5,489

17

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 13. PROVISIONS

OTE 13. PROVISIONS
a. Current Provision for make good b. Non-current Provision for make good Onerous contract provisions Total provisions ovements in provisions: Carrying amount at 1 July 2021 Additional provisions recognised Payments Carrying amount at 30 June 2022	30 June 2022 30 June 2021
	$’000 $’000
	397 - 2,336 - 289 -
	2,625 -
	3,022 -
	Lease make good Onerous contracts
	$’000 $’000
	- - 2,733 349 - (60)
	2,733 289

Movements in provisions:

18

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 14. INTANGIBLE ASSETS

Note Non-current Goodwill Goodwill 1 Licensed operations Licenced operations Accumulated amortisation Course materials Copyrights – at cost Accumulated amortisation Work in progress Brand name Brand name – at cost Training materials Training materials – at cost Accumulated amortisation Agent relationship Agent relationship – at cost Accumulated amortisation Total intangible assets	30 June 2022 30 June 2021
	$’000 $’000
	38,747 -
	38,747 -
	4,670 4,670 (3,004) (2,440)
	1,666 2,230
	303 - (9) - 353 -
	647 -
	9,562 -
	9,562 -
	7,993 - (856) -
	7,137 -
	8,432 - (632) -
	7,800 -
	65,559 2,230

Amortisation expense

Following the finalisation of the acquisition accounting for the RedHill acquisition (refer Note 1), intangible assets have been recognised for Brand names, Training materials and Agent relationships. Useful lives of intangible assets are noted below.

Brand names	not amortised but tested annually for impairment
Licensed operations	7 years
Training materials	7 years
Agent relationships	10 years
Course materials	2-3 years

Acquired intangible assets have been amortised since their acquisition date of 1 October 2021. Total amortisation expense associated with acquired intangible assets in FY22 was $1.5 million

19

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

Movements in carrying amounts

Carrying amount at 1 July 2021 RedHill acquisition Additions Amortisation expense Carrying amount at 30 June 2022 Carrying amount at 1 July 2020 Additions Amortisation expense Carrying amount at 30 June 2021	Carrying amount at 1 July 2021 RedHill acquisition Additions Amortisation expense Carrying amount at 30 June 2022 Carrying amount at 1 July 2020 Additions Amortisation expense Carrying amount at 30 June 2021	Goodwill Licensed operation Course material Brand name Training material Agent relationship Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 - 2,230 - - - 2,230 38,747 - - 9,562 7,993 8,432 64,734 - - 656 - - - 656 - (564) (9) - (856) (632) (2,061)
		38,747 1,666 647 9,562 7,137 7,800 65,559
		- 2,838 - - - - 2,838 - 8 - - - - 8 - (616) - - - - (616) - 2,230 - - - - 2,230

Impairment testing of intangible assets

The recoverable amount of the consolidated entity’s intangible assets has been determined by a value in use calculation using a discounted cash flow (DCF) model, based on a 3-year projection approved by management, along with a terminal value in year 3. Modeling has been performed for each of the consolidated entities CGU’s.

The following key assumptions were used in the discounted cash flow model:

• The discount rate used is the pre-tax equivalent of a post-tax WACC of 11%; and

• A terminal growth rate of 2%

20

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

The allocation of the carrying value of goodwill and intangible assets at 30 June 2022 and used for impairment testing is as follows:

Goodwill Licensed operations Course materials Brand names Training materials Agent relationships	Greenwich Technology & Design Go Study Sero / Celtic / CTI Corporate/ Elimination Consolidated
	$’000 $’000 $’000 $’000 $’000 $’000
	12,063 12,604 2,939 - 11,141 38,747 - - - 1,666 - 1,666 173 163 - 311 - 647 5,886 3,192 484 - - 9,562 3,967 3,170 - - - 7,137 7,553 247 - - - 7,800
	29,642 19,376 3,423 1,977 11,141 65,559

Goodwill recorded in Corporate has been allocated to the CGU’s for the purposes of impairment testing.

Results of impairment testing

Greenwich

Sensitivity analysis has been conducted on the recoverable amount based on a change in the discount rate (increase by 2% ppts), the terminal value growth rate (decrease by 2% ppts) and a reduction in earnings (10% per annum). Under all modelled scenario’s the DCF valuation was greater than the carrying value of the CGU assets and no impairment is required.

Technology & Design

Sensitivity analysis has been conducted on the recoverable amount based on a change in the discount rate (increase by 2% ppts), the terminal value growth rate (decrease by 2% ppts) and a reduction in earnings (10% per annum). Under all modelled scenario’s the DCF valuation was greater than the carrying value of the CGU assets and no impairment is required.

Go Study Australia

Sensitivity analysis has been conducted on the recoverable amount based on a change in the discount rate (increase by 2% ppts), the terminal value growth rate (decrease by 2% ppts) and a reduction in earnings (10% per annum). Under all modelled scenario’s the DCF valuation was greater than the carrying value of the CGU assets and no impairment is required.

Sero / Celtic / CTI

Sensitivity analysis has been conducted on the recoverable amount based on a change in the discount rate (increase by 2% ppts), the terminal value growth rate (decrease by 2% ppts) and a reduction in earnings (10% per annum). Under all modelled scenario’s the DCF valuation was greater than the carrying value of the CGU assets and no impairment is required.

21

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 15. TRADE AND OTHER PAYABLES

OTE 15. TRADE AND OTHER PAYABLES
Current Trade payables Payroll accruals Accrued expenses Customer advances Other payables OTE 16. CONTRACT LIABILITIES Current Contract liabilities	30 June 2022 30 June 2021
	$’000 $’000
	3,102 2,106 2,078 665 1,698 316 3,254 - 533 220
	10,665 3,307
	30 June 2022 30 June 2021
	$’000 $’000
	30,652 1,614
	30,652 1,614

NOTE 16. CONTRACT LIABILITIES

Tuition related performance obligations

The aggregate amount of the transaction price allocated to tuition related services, which are paid in advance or due for payment and are yet to be delivered at balance date was $30,652,000 as at 30 June 2022 (30 June 2021: $1,614,000) and is expected to be recognised as revenue in future periods.

The duration of study is used to measure the progress of the performance obligation to determine how much revenue should be recognised, and that revenue is recognised as the performance obligation is satisfied.

The ageing of the expected performance obligation of contract liabilities are as follows:

			30	June 2022	30 June 2021
				$’000	$’000
To be realised within	12	months		30,652	1,614

Contract liabilities relate to tuition fees in relation to domestic and international students where an agreement has been signed and a payment plan is in place with students for studies which are expected to be undertaken after the balance date.

In addition, for students currently enrolled in a course and with a contract in place, $21.1 million will be invoiced and become payable in future periods.

22

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 17. BORROWINGS

OTE 17. BORROWINGS
a. Current Convertible notes Loans (i) Related party loans b. Non-current Long-term loan (ii)	30 June 2022 30 June 2021
	$’000 $’000
	- 650 138 78 - 398
	138 1,126
	224 224
	224 224

On 22 June 2022, convertible notes with a face value $500,000 plus accrued interest of $131,557 were converted to equity and 12,631,140 shares at the contracted price of $0.05 each were issued in satisfaction of this obligation.

On 29 June 2022, the Company redeemed convertible notes with a value of $150,000.

(i) Loans (secured)

These loans relate to motor vehicle financing and are interest bearing. The motor vehicle financier has a security interest in the vehicles necessary to secure repayment of the loan.

(ii) Long term loan (secured)

Facilitylimit:	$223,960
Commencement date:	19 May 2020
Interest rate:	0.00% for the first 12 months from the commencement date. Then 2.50% for the remainder of the loan term
Interestperiod:	Monthly
Term:	10years from the commencement date
Repayment	No repayments for the first 12 months, followed by 24 months of interest only
terms:	repayments then 84 months ofprincipal and interest repayments
Security:	Loan is secured over the assets of Capital TrainingInstitute PtyLimited

NOTE 18. EMPLOYEE BENEFITS

OTE 18. EMPLOYEE BENEFITS
a. Current Provision for annual leave Provision for long service leave b. Non-current Provision for long service leave	30 June 2022 30 June 2021
	$’000 $’000
	1,709 346 513 15
	2,222 361
	131 -
	2,353 361

23

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 19. DEFERRED TAXATION

Balances

At 30 June 2022, net deferred tax assets of $11,011,841 have not been recognised in terms of AASB112 Income Taxes. The Company does not currently have foreseeable future taxable profits against this net deferred tax amount may be utilised.

a. Deferred tax assets Tax losses Provisions and accruals Capital raising costs Other Set-off deferred tax liabilities Net deferred tax assets Less deferred tax assets not recognised Net deferred tax assets b. Deferred tax liabilities Other Set-off deferred tax liabilities Net deferred tax liabilities c. Tax losses and deductible temporary differences Unused tax losses and deductible temporary differences for which no deferred tax asset has been recognised, that may be utilised to offset tax liabilities: ▪ Tax losses	2022 $ 2021 $
	7,093 5,426 4,134 301 - 290 1,082 208
	12,309 6,225 (1,297) (78)
	11,012 6,147 (11,012) (6,147)
	- -
	6,342 700
	6,342 700 (1,297) (78)
	5,045 622
	28,371 20,868
	28,371 20,868

24

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 20. ISSUED CAPITAL

OTE 20. ISSUED CAPITAL
Fully paid ordinary shares at no par value a. Ordinary shares At the beginning of the year Shares issued during the period/year: Placement shares issued at $0.1000 per share Placement shares issued at $0.1350 per share Placement shares issued at $0.1350 per share Placement shares issued at $0.1199 per share Convertible Notes shares issued at $0.05 per share Transaction costs relating to share issues At reporting date	12 months to 30 June 2022 12 months to 30 June 2021 12 months to 30 June 2022 12 months to 30 June 2021
	Number Number $’000 $’000
	1,095,383,863 581,564,649 102,427 34,194 581,564,649 526,564,649 34,194 29,986 55,000,000 5,500 467,245,747 63,078 30,030,841 4,054 3,911,486 469 12,631,140 632 - - (1,292)
	1,095,383,863 581,564,649 102,427 34,194

a. Options Options At the beginning of the period Options issued/(lapsed) during the year: Expired 03/07/2020 Issued to broker (i) Expiry Date: 10/07/2023 Exercise Price: $0.05 Issued to broker (ii) Expiry Date: 09/11/2023 Exercise Price: $0.15 At reporting date	12 months to 30 June 2022 12 months to 30 June 2021 12 months to 30 June 2022 12 months to 30 June 2021
	Number Number $’000 $’000
	27,000,000 7,500,000 3,079 1,957 (7,500,000) 10,000,000 17,000,000 165 957
	27,000,000 27,000,000 3,079 3,079

25

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 21. RESERVES

OTE 21. RESERVES
Foreign currency reserve Share-based payments reserve	30 June 2022 $’000 30 June 2021 $’000
	43 - 3,079 3,079
	3,122 3,079

Movements in reserves

ovements in reserves
Carrying amount at 1 July 2021 Foreign currency translation Carrying amount at 30 June 2022	Foreign currency translation Share-based payments
	$’000 $’000
	- 3,079 43 -
	43 3,079

NOTE 22. FINANCIAL INSTRUMENTS

Weighted average interest rate 2022 Weighted average interest rate % $’000 % Cash and cash equivalents (note 6) 0.88% 27,161 0.10% Term deposit – restricted cash 0.29% 3,050 0.00% Net exposure to cash flow interest rate risk 30,211 1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years Consolidated - 2022 $’000 $’000 $’000 $’000 Non-derivatives Non-interest bearing Trade payables 3,102 - - - Other payables 5,485 - - - Payroll accruals 2,078 - - - Total non-derivatives 10,665 - - -	Weighted average interest rate 2022 Weighted average interest rate % $’000 % Cash and cash equivalents (note 6) 0.88% 27,161 0.10% Term deposit – restricted cash 0.29% 3,050 0.00% Net exposure to cash flow interest rate risk 30,211 1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years Consolidated - 2022 $’000 $’000 $’000 $’000 Non-derivatives Non-interest bearing Trade payables 3,102 - - - Other payables 5,485 - - - Payroll accruals 2,078 - - - Total non-derivatives 10,665 - - -	2021 $’000 4,549 478
		5,027
		Remaining contractual maturities $’000 3,102 5,485 2,078 10,665
	10,665 - - -

26

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

Consolidated - 2021 Non-derivatives Non-interest bearing Trade payables Other payables Payroll accruals Total non-derivatives	1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years Remaining contractual maturities $’000 $’000 $’000 $’000 $’000 2,106 - - - 2,106 536 - - - 536 665 - - - 665
	3,307 - - - 3,307

NOTE 23. INTEREST IN SUBSIDIARIES

The subsidiaries listed below have share capital consisting solely of ordinary shares which are held directly by the Group and the proportion of ownership interest held equals the voting rights held by the Group. Investments in subsidiaries are accounted for at cost. Each subsidiary’s country of incorporation is also its principal place of business:

principal place of business:
			Ownership
			interest
		Place of
Name	Principal Activity	incorporation	2022	2021
		and operation
RedHill Education Limited1	Educational services	Australia	100%	0%
Go Study Australia Pty Ltd2	Student recruitment	Australia	100%	0%
Academy of Information Technology Pty Ltd2	Educational services	Australia	100%	0%
International School of Colour and Design Pty Ltd2	Educational services	Australia	100%	0%
Greenwich English College Pty Ltd2	Educational services	Australia	100%	0%
Go Study Australia Intercambio Cultural Ltda3	Student recruitment	Brazil	100%	0%
Go Study Australia S.A.C.3	Student recruitment	Peru	100%	0%
Go Study Australia Sociedad Limitada4	Student recruitment	Spain	100%	0%
iCollege International Pty Ltd	Educational services	Australia	100%	100%
Management Institute of Australia Pty Ltd5	Educational services	Australia	100%	100%
Management Institute of Australia No.1 Pty Ltd5	Educational services	Australia	100%	100%
Management Institute of Australia No.2 Pty Ltd5	Educational services	Australia	100%	100%
Celtic Training & Consultancy Pty Ltd	Educational services	Australia	100%	100%
Brisbane Career College Pty Ltd	Educational services	Australia	100%	100%
Capital Training Institute Pty Ltd	Educational services	Australia	100%	100%

1. Acquired on 1 October 2021

2. 100% owned by RedHill Education Limited

3. 75% owned by Go Study Australia Pty Ltd and 25% owned by RedHill Education Limited

4. 100% owned by Go Study Australia Pty Ltd

5. Companies were all acquired at the same time and are now in liquidation waiting deregistration

27

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 24. RECONCILIATION OF PROFIT/(LOSS) AFTER INCOME TAX TO NET CASH FROM OPERATING ACTIVITIES

CTIVITIES
	30 June 2022	30 June 2021
	$’000	$’000
Profit / (loss) after income tax expense for the year	(8,695)	308
Adjustment for:
Depreciation and amortisation	7,764	1,437
Share-based payments	469	1,122
Non-cash finance costs	1,687	225
Other non-cash items	169	(695)
Changes in operating assets and liabilities:
Decrease in trade receivables	(528)	(327)
Decrease in deferred tax assets	-	-
Decrease in prepayments	(164)	(77)
Decrease in other operating assets	(4,979)	(228)
Increase in trade and other payables	1,116	(16)
Increase in contract liabilities	15,008	(1,081)
Decrease in provision for income tax	(628)	(116)
Increase in employee benefits	41	132
Increase in other provisions	(60)	-
Net cash from operating activities	11,200	684

NOTE 25. CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES

Balance at 1 July 2021 Net cash from financing activities RedHill acquisition Modifications Finance costs Balance at 30 June 2022 Balance at 1 July 2021 Fully redeemed on 29/06/2022 Converted to shares on 22/06/2022 @ $0.05c per share Balance at 30 June 2022		Lease Liabilities $’000 3,594 (6,209) 18,714 3,237 1,687
		21,023
		Convertible Notes $’000 650 (150) (500)
		-

28

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 26. KEY MANAGEMENT PERSONNEL (KMP) COMPENSATION

The names and positions of KMP during FY22 are as follows:

• Mr Simon Tolhurst

• Mr Ashish Katta

• Ms Sandra Hook

• Mr William Deane

• Mr Badri Gosavi

• Mr Glenn Elith

• Mr Michael Fahey

Independent non-executive director (independent chairman until 29 July 2022)

Non-executive director (resigned 29 July 2022) Non-executive director (appointed 8 November 2021) Non-executive director (appointed 8 November 2021) Executive director (resigned 29 July 2022) Chief Executive Officer (appointed 1 October 2021) Chief Financial Officer (appointed 1 October 2021)

Short-term employee benefits Cash salary and fees Movement in annual leave Incentives Post-employment benefits Long-term benefits Share-based payments Total	30 June 2022 30 June 2021
	$’000 $’000
	1,169 518 157 - 325 - 65 - 24 - - 80
	1,740 598

NOTE 27. RELATED PARTY TRANSACTIONS

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the consolidated entity and other related parties are disclosed below.

The loan outstanding payable to Mr Ashish Katta of $380,000 at 30 June 2021 has been fully repaid during the year.

There was a loan outstanding receivable from Sero Learning Pty Ltd, of which Mr Ashish Katta is a director and shareholder at 30 June 2021 of $261,302. Following the completion of a detailed reconciliation, cash of $76,274 and fixed assets with a value of $55,070 were transferred to iCollege in February 2022 as full settlement of this loan outstanding. As part of this settlement, an impairment of $130,000 has been recorded against this receivable.

A payment of $8,967 was made to Gosavi Pty Limited for catering expenses. Gosavi Pty Limited is a related party of Badri Gosavi.

In addition to the remuneration paid to KMP, amounts to related parties of the CEO totalling $20,917 were paid during the period for administrative support services (year ended 30 June 2021: $nil).

29

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 28. AUDITOR’S REMUNERATION

Remuneration of the auditor for auditing or reviewing the financial reports:

Hall Chadwick WA Audit Pty Ltd OTE 29. EARNINGS PER SHARE (EPS) a. Reconciliation of earnings to profit or loss Profit / (loss) for the year Profit / (loss) used in the calculation of basic and diluted EPS b. Weighted average number of ordinary shares Outstanding during the year used in calculation of basic EPS c. Earnings per share Basic EPS (cents per share) Diluted EPS (cents per share)		30 June 2022 30 June 2021
		$ $
		123 66
		123 66
		30 June 2022 $’000 30 June 2021 $’000
		(8,695) 308
		(8,695) 308
		30 June 2022 No. 30 June 2021 No.
		921,016,961 561,674,240
		30 June 2022 30 June 2021
		(0.94) 0.05 (0.94) 0.05

NOTE 29. EARNINGS PER SHARE (EPS)

d. As at 30 June 2022, the consolidated entity has 27,000,000 unissued shares under options (30 June 2021: 27,000,000). During the year ended 30 June 2022, the consolidated entity’s unissued shares under option were non-dilutive.

30

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 30. SHARE-BASED PAYMENTS

OTE 30. SHARE-BASED PAYMENTS
	30 June 2022	30 June 2021
	$’000	$’000
Share-based payments
Recognised in professional and consulting fees	-	165
Recognised in merger and acquisition costs	469	-
	469	165

Share-based payment arrangements in effect during the year

• a. Consultant options

In consideration for services during the year, the Company had issued options in prior financial year with terms and summaries below:

Number under option	Date of expiry	Exercise price	Vesting terms
10,000,000 10 Jul 2023 $0.05 Immediately upon issue 17,000,000 9 Nov 2023 $0.15 Immediately upon issue

Movement in share-based payment arrangements during the period

A summary of the movements of all Company options issued as share-based payments is as follows:

	2022	2022	2021	2021
	Number of options	Weighted average exerciseprice	Number of options	Weighted average exerciseprice
		$		$
Outstanding at the beginning of the year Granted Expiry: 10/07/2023 Expiry: 09/11/2023 Expired Outstanding at year-end Exercisable at year-end	27,000,000 7,500,000 - 10,000,000 0.05 - 17,000,000 0.15 - - (7,500,000) 0.08
	27,000,000 0.11 27,000,000 0.11
	27,000,000 0.11 27,000,000 0.11

NOTE 31. CONTINGENT LIABILITIES

The consolidated entity has given bank guarantees as at 30 June 2022 of $5,107,604 (30 June 2021: $nil) to various lessors.

The consolidated entity has a bank guarantee facility with a limit of $4,533,377 with National Australia Bank (NAB) of which $4,076,043 has been utilised as at 30 June 2022. The consolidated entity has term deposits of $2,476,639 as at 30 June 2022 classified within non-current assets to support this facility. The consolidated entity is required to maintain a minimum cash balance of 100% of the bank guarantee facility with NAB, inclusive of amounts held as term deposits.

In addition to this facility, the consolidated entity has issued bank guarantees totalling $574,227, which are fully backed by term deposits.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE YEAR ENDED 30 JUNE 2022

NOTE 32. COMMITMENTS

The consolidated entity is committed to incur capital expenditure of approximately $0.5 million in relation to the Level 3, 119 Charlotte Street, Brisbane campus. The expenditure is expected to be settled in the FY2023 financial year.

NOTE 33. EVENTS SUBSEQUENT TO REPORTING DATE

On 29 July 2022 the Company announced a series of Board changes. Cass O’Connor was appointed as an independent non-executive director and as chair of the Board. Simon Tolhurst stepped down as chair of the Board and remains as an independent non-executive director. On the same day, Ashish Katta and Badri Gosavi resigned from the Board.

On 22 August 2022 the Company repaid in full the secured long-term loan of $223,960 referred to in Note 17.

Apart from the matters noted above, there has been no additional matter or circumstance that has arisen after balance sheet date that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future reporting periods.

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