NEXTED GROUP LIMITED — Interim / Quarterly Report 2021

Feb 10, 2021

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iCollege Limited and controlled entities ABN 75 105 012 066

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Interim Financial Report for the Half-Year Ended 31 December 2020

CONTENTS

1

Corporate Directory

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2
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Appendix 4D

4

Directors’ Report

7

Auditor’s Independence Declaration

8

Consolidated Statement of Profit or Loss and Other Comprehensive Income

9

Consolidated Statement

of Financial Position

10

Consolidated Statement of Changes in Equity

11

Consolidated Statement of Cash Flows

12

Notes to Financial Statements

21

Directors’ Declaration

22

Independent Auditor’s Review Report

CORPORATE DIRECTORY

Directors Simon Tolhurst – Non-executive Chairman Ashish Katta – CEO & Managing Director Badri Gosavi – CFO & Executive Director

Company Stuart Usher Secretary Registered 205 North Quay Telephone: +61 (0)7 3229 6000 Office Brisbane City Email: investors@icollege.edu.au QLD 4000 Website: www.icollege.edu.au Auditors Bentleys Audit & Corporate (WA) Pty Ltd Level 3, 216 St Georges Terrace Perth WA 6000 Telephone: +61 (0)8 9226 4500

Share Advanced Share Registry Pty Ltd Telephone: +61 (0)8 9389 8033 Registry 110 Stirling Highway Toll Free: 1300 113 258 Nedlands Fax: +61 (08) 6370 4203 WA 6009 Email: admin@advanceshare.com.au Website: www.advancedshare.com.au Securities ASX Code: ICT Telephone: 131 ASX (131 279) – within Australia Exchange Australian Securities Exchange Telephone: +61 (0)2 9338 0000 Level 40, Central Park Fax: +61 (0)2 9227 0885 152-158 St Georges Terrace Website: www.asx.com.au Perth WA 6000

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APPENDIX 4D

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

1	REPORTING PERIOD
	Report for the period ended:			31 December	2020
	Previous corresponding period is half-year	ended:		31 December	2019
2	RESULTS FOR ANNOUNCEMENT TO THE MARKET	Half-year ended 31 Dec 2020 $		Half-year ended 31 Dec 2019 $		Change %
2.1	Revenues from ordinary activities		8,822,964	7,022,644		26% increase
2.2	Profit / (loss) from ordinary activities after tax attributable to members (Item 2.2)		1,222,808	(107,805)		1,222% increase
2.3	Profit from ordinary activities (Item 2.3)		1,222,808	(107,805)		1,222% increase
				Amount per		Franked
				security		amount 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
2.6	Revenue represents interest earned, service revenue, JobKeeper and ATO Cash Flow Boost revenue
3	Net tangible assets per security					Previous
				Current Period		corresponding
						period
				$		$
	Earnings / (losses) for the period attributable to owners of the parent			1,222,808		(107,805)
	Net assets / (liabilities)			2,902,025		(1,118,101)
	Less: Intangible assets			(2,547,718)		(3,150,854)
	Less: Right of Use assets			(1,816,073)		(2,955,805)
	Add: Deferred tax liabilities			697,872		866,484
	Net tangible assets / (liabilities)			(763,894)		(6,358,276)
				No.		No.
	Fully paid ordinary shares			581,564,649		526,564,649
				¢		¢
	Net tangible assets / (liabilities) backing per share			(0.001)		(0.012)

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APPENDIX 4D (continued)

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

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

4.1	Name of entities	Nil
4.2	Date of gain or loss or control	N/A

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

		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

• a. Details of dividend or distribution reinvestment plans in operation are described below: Not applicable

7. Details of associates and joint venture entities

Name of entities Nil Percentage holding in each of these entities N/A

1. The financial information provided in the Appendix 4D is based on the interim final report (attached), which has been prepared in accordance with Australian Accounting Standards.

2. The report is based on accounts which have been reviewed by the Company’s independent auditor.

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DIRECTORS’ REPORT

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FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

Your directors present their financial report on the consolidated entity consisting of iCollege Limited ( iCollege or the Company ) and its controlled entities ( Group ) for the half-year ended 31 December 2020.

Directors The names of Directors during the half-year and up to the date of this report are: Simon Tolhurst Non-executive Chairman Ashish Katta CEO & Managing Director Badri Gosavi CFO & Executive Director

Principal activities

The principal activity of the Company during the financial half-year was the provision of education services to domestic and international students.

Operating and financial review

iCollege is a vocational training provider comprised of six businesses which deliver accredited and nonaccredited vocational education and training solutions throughout Australia and internationally. iCollege currently has four registered training organisations (RTO) based in Australia, an English language testing business partnered with Cambridge Assessment English and an India-based specialist IT Training business focussed on the delivery of intensive Boot Camp style training in coding.

• Record revenue of $8,822,964, a 26% increase on PCP (H1 FY2020: $7,022,644)

• Net profit after tax of $1,222,808 versus a loss of $107,805 on the previous corresponding period

• Strong EBITDA increase to $2,006,980 highlights a major improvement on the PCP (H1 FY2020: $673,711)

• Balance sheet strengthened through oversubscribed capital raise – cash at bank at half year end of $5,528,227

• Solid half-year growth underpinned by strong domestic recruitment, onshore international student enrolment, and multiple new training programs

The Board and management of iCollege Limited (‘iCollege’) is pleased to update shareholders on the Company’s operational and financial performance for the half-year ended 31 December 2020 (‘H1 FY2021’). By almost every measure, iCollege has excelled and delivered a record financial performance.

iCollege generated record revenues of $8,822,964 during the half, a 26% increase on the previous corresponding period (‘PCP’) (H1 FY2020: $7,022,644). This includes $936,100 (30 December 2019: $Nil) in income relating to the COVID-19 Government Stimulus. The group generated a net profit after tax of (‘NPAT’) $1,222,808 compared to a loss of $107,805 during H1 FY2020. Earnings before interest, tax, depreciation, and amortisation (‘EBITDA’) were $2,006,980, a major improvement on the PCP (H1 FY2020: EBITDA of $673,711).

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DIRECTORS’ REPORT (continued)

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FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

The Company also strengthened its balance sheet during the half through a successful placement which raised $5,500,000 through the issue of 55,000,000 fully paid ordinary shares at $0.10 per share before costs. This has delivered the necessary financial flexibility to pursue several organic growth initiatives and pursue strategic and complementary acquisitions. The Company has also continued to pay down debt through stringent cost management.

The net asset surplus of the Group has increased from 30 June 2020 by $6,552,558 to $2,902,025 at 31 December 2020 (30 June 2020: $3,650,333 deficiency).

As at 31 December 2020, the Group’s cash and cash equivalents increased from 30 June 2020 by $4,683,337 to $5,528,227 (30 June 2020: $844,890) and had a working capital surplus (excluding unearned revenue) of $2,884,979 (30 June 2020: $3,301,197 working capital deficit).

The steady and continuing growth in revenue and earnings has been driven by the strengthening performance of the Company’s domestic training operations and a steady contribution from iCollege’s international student business.

During the half, iCollege provided ongoing training packages to industries experiencing considerable skills shortages and the Company is set to be a key beneficiary of the State and Federal Government’s $1 billion Job Trainer fund which was set up as a response to the COVID-19 pandemic. iCollege is very well positioned to take advantage of Job Trainer due to its unrivalled geographical footprint of established campuses and participation in a significant number of state government contracts.

Financial performance was also slightly enhanced due to the Company’s participation in three infection control programs initiated during the half. These included the ongoing roll out of a training program with the Pharmacy Guild of Australia to train staff at the Guild’s 5,800 member pharmacies across the country, a contract secured with WA’s largest aged care provider, Aegis Aged Care Group Pty Ltd to train 3,300 staff and an agreement with Canberra’s largest taxi company to provide mandatory infection control training to over 400 drivers.

In addition, ongoing domestic enrolments in existing course offerings in aged care, hospitality, building and construction, community services and healthcare added to the Company’s growing earnings profile.

International recruitment during the half was focused on international students who have remained in Australia due to border closures and travel restrictions. iCollege recruited offshore international students that could commence courses whilst living abroad, with a view to completing the remainder of the course once border restrictions are lifted. This initiative highlighted the Company’s ability to quickly adapt to the changing regulatory environment and to maintain steady international recruitment levels despite the uncertainty of international border closures. International enrolments accounted for 46% of revenue for the half year ended 31 December 2020.

iCollege expects further growth in the current half and beyond. The development of the Company’s new Perth training facility will be completed in the coming months which delivers another catalyst to build the revenue base. The campus is located in Bayswater, a short distance from the Perth CBD and across from the Bayswater train station, which is undergoing a $100m upgrade. Ongoing domestic and international enrolments are also expected to underpin its growth.

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DIRECTORS’ REPORT (continued)

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

The Company is actively pursuing a number of organic growth opportunities and strategic acquisition opportunities, primarily in Australia but also internationally, all of which will make a positive contribution to earnings. The sector is ripe for further consolidation and iCollege is poised to achieve much greater critical mass.

Auditor’s independence declaration

The lead auditor’s independence under section 307c of the Corporations Act 2001 (Cth) for the half-year ended 31 December 2020 has been received and can be found on Page 7 of the interim financial report.

Signed in accordance with a resolution of directors, pursuant to section 306(3) of the Corporations Act 2001 (Cth) .

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ASHISH KATTA CEO & Managing Director Dated this Wednesday 10 February 2021

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To the Board of Directors

Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

As lead audit Partner for the review of the financial statements of iCollege Limited for the half year ended 31 December 2020, I declare that to the best of my knowledge and belief, there have been no contraventions of:

• the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

• any applicable code of professional conduct in relation to the review.

Yours Faithfully,

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BENTLEYS Chartered Accountants

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DOUG BELL CA Partner

Dated at Perth this 10[th] day of February 2021

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

Note	31 December 2020 $ 31 December 2019 $
Revenue from continuing operations 2a Cost of Sales Gross profit Other income 2b Audit and tax expenses Compliance Consultant fees Depreciation and amortisation Director fees Doubtful debts Employment expenses Interest expense Legal fees Marketing expenses Occupancy expenses Travel expenses Other expenses Profit / (Loss) before tax Income tax benefit Net profit / (loss) for the half-year Other comprehensive income for the half-year net of tax Total comprehensive income attributable to members of the parent entity Earnings per share: Basic and diluted loss per share (cents per share) 3c	7,885,968 7,021,177 (3,623,281) (3,368,966)
	4,262,687 3,652,211 936,996 1,467 (58,621) (27,121) (53,762) (50,103) (659,976) (274,514) (694,824) (634,088) (30,000) (50,000) (168,067) (225,096) (1,554,354) (1,379,059) (174,001) (232,778) (23,991) (70,363) (119,372) (108,332) (57,251) (324,997) (54,598) (115,993) (412,712) (354,389)
	1,138,154 (193,155)
	84,654 85,350
	1,222,808 (107,805) - -
	1,222,808 (107,805)
	0.226 (0.067)

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 HALF-YEAR ENDED 31 DECEMBER 2020

Note	31 December 2020 $ 30 June 2020 $
Current Assets Cash and cash equivalents 4 Trade and other receivables 5 Inventories 6 Other assets 7 Total current assets Non-current assets Plant and equipment Right of use asset 9 Intangible assets 8 Total non-current assets Total assets Current liabilities Trade and other payables 10 Unearned revenues Borrowings 11(a) Leases 9 Short-term provisions 13 Total current liabilities Non-current liabilities Borrowings 11(b) Deferred tax liabilities Leases 9 Total non-current liabilities Total Liabilities Net Assets / (Liabilities) Equity Issued capital 14 Reserves Accumulated losses Total equity	5,528,227 844,890 901,846 523,239 197,364 216,275 621,670 257,182
	7,249,107 1,841,586
	201,330 151,990 1,816,073 1,425,159 2,547,718 2,855,550
	4,565,121 4,432,699
	11,814,228 6,274,285
	2,540,211 3,238,467 2,056,406 2,694,588 965,404 1,145,640 534,282 529,651 324,231 229,025
	6,420,534 7,837,371
	223,960 223,960 697,872 782,526 1,569,837 1,080,961
	2,491,669 2,087,447
	8,912,203 9,924,818
	2,902,025 (3,650,533)
	34,469,202 29,986,452 2,804,234 1,957,234 (34,371,411) (35,594,219)
	2,902,025 (3,650,533)

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 HALF-YEAR ENDED 31 DECEMBER 2020

Note	Contributed Equity Accumulated Losses Share-based Payments Reserve Total Equity
	$ $ $ $
Balance at 1 July 2020 Profit for the half-year Other comprehensive income for the half-year Total comprehensive income for the half-year Transactions with owners Shares issued at net cost Options issued at fair value Balance as at 31 December 2020	29,986,452 (35,594,219) 1,957,234 (3,650,533) 1,222,808 1,387,808 1,222,808 1,387,808 4,482,750 4,317,750 847,000 847,000 34,469,202 (34,371,411) 2,804,234 2,902,025
Note	Contributed Equity Accumulated Losses Share-based Payments Reserve Total Equity
	$ $ $ $
Balance at 1 July 2019 Loss for the half-year Other comprehensive income for the half-year Total comprehensive income for the half-year Transactions with owners Shares issued at net cost Options issued at fair value Balance as at 31 December 2019	29,951,452 (32,953,982) 1,957,234 (1,045,296) - (107,805) - (107,805) - - - -
	- (107,805) - (107,805) 35,000 - - 35,000 - - - -
	29,986,452 (33,061,787) (1,957,234) (1,118,101)

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 HALF-YEAR ENDED 31 DECEMBER 2020

Note	31 December 2020 $ 31 December 2019 $
Cash flows from operating activities Receipts from customers Interest received Interest paid Payment to suppliers and employees Job Keeper & ATO Cash Flow Boost Bank Guarantees Paid Net cash used in operating activities Cash flows from investing activities Purchase of plant and equipment Net cash used in investing activities Cash flows from financing activities Repayment of loans Proceeds from issue of shares Payment of share issue costs Proceeds from issue of convertible notes Net cash provided by financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the half-year Cash and cash equivalents at the end of the half-year	6,366,290 6,320,311 896 1,467 (39,790) (232,778) (6,708,063) (6,287,037) 778,728 - (176,453) -
	221,608 (198,037)
	(67,589) (18,886)
	(67,589) (18,886)
	(585,000) (289,541) 5,500,000 - (385,682) - - 500,000
	4,529,318 210,459
	4,683,337 (6,464) 844,890 134,989
	5,528,227 128,525

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

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FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

The Half-Year Report covers iCollege Ltd ( iCollege or the Company ) and its controlled entities. iCollege is a public listed company, incorporated and domiciled in Australia. Its registered office is 205 North Quay, Brisbane City, QLD 4000. iCollege is a for-profit company for the purpose of preparing this Half-Year Report.

The financial statements were authorised for issue on 29 January 2021 by the directors of the Company.

a. Basis of preparation

The Half-Year Report has been prepared on the historical cost and accruals basis except where stated otherwise.

The Half-Year Report is intended to provide users with an update on the latest half-year for iCollege Ltd and its controlled entities. As such, it does not contain information that represents relatively insignificant changes occurring during the half-year within the Group. It is therefore recommended that this financial report be read in combination with the annual financial statements of the Group for the year ended 30 June 2020, together with any public announcements made during the half-year.

Where required, comparative figures have been adjusted to conform with changes in presentation for the current financial period.

b. Statement of compliance

The Half-Year Report is a general-purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting . Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting . The Half-Year Report does not include notes of the type normally included in an annual financial report and shall be read in conjunction with the most recent annual financial report.

c. Going concern

The half year financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of the business.

The Group recorded a profit after tax for the half year ended 31 December 2020 of $1,222,808 (31 December 2019: $107,805 loss) and as at balance sheet date, had a working capital surplus (excluding unearned revenue) of $2,884,979 (30 June 2020: $3,301,197 deficiency). Included in current liabilities is unearned revenue of $2,056,406 (30 June 2020: $2,694,588) which is not expected to be repaid and convertible notes of $650,000 which may be converted to equity.

During the year the Company successfully raised $5,500,000 (before costs) and based on cash flow forecasts and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

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FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

d. Use of estimates and judgements

The preparation of the interim financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income, and expenses. These estimates and associated assumptions are based on historical experience and various factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

The judgements, estimates and assumptions are applied in the consolidated financial statements, including the key sources of estimation uncertainty were the same as those applied in the Group’s last annual financial statements for the year ended 30 June 2020.

2. REVENUE AND OTHER INCOME

. REVENUE AND OTHER INCOME
a. Revenue Course Income b. Other Income JobKeeper & ATO Cash Flow Boost Interest income . EARNINGS PER SHARE (EPS) a. Reconciliation of earnings to profit or loss Profit / (Loss) for the half-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	31 December 2020 $ 31 December 2019 $
	7,885,968 7,021,177
	7,885,968 7,021,177
	936,100 - 896 1,467
	936,996 1,467
	31 December 2020 $ 31 December 2019 $
	1,222,808 (107,805)
	1,222,808 (107,805)
	31 December 2020 No. 31 December 2019 No.
	542,193,066 525,687,456

3. EARNINGS PER SHARE (EPS)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

3. EARNINGS PER SHARE (EPS) (continued)

. EARNINGS PER SHARE (EPS) (continued)
	31 December	31 December
	2020	2019
	$	$
c. Earnings per share
Basic EPS (cents per share)	0.226	(0.021)

d. As at 31 December 2020, the Group has 22,000,000 unissued shares under options (31 December 2019: $27,500,000). During the half-year ended 31 December 2020, the Group’s unissued shares under option and partly paid shares were anti-dilutive.

4. CASH AND CASH EQUIVALENTS

a. Current Cash at bank

31	December	30 June
	2020	2020
	$	$
	5,528,227	844,890
	5,528,227	844,890

5. TRADE AND OTHER RECEIVABLES

a. Current Trade receivables Less: Doubtful debts GST receivable Accrued income Other receivables	31 December 2020 30 June 2020
	$ $
	704,177 545,756 (269,342) (234,000)
	434,835 311,756 122,961 69,982 300,000 95,279 44,051 46,222
	901,846 523,239

6. INVENTORIES

. INVENTORIES
a. Current Linguaskills bundles	31 December 2020 30 June 2020
	$ $
	197,364 216,275
	197,364 216,275

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

7. OTHER ASSETS

7. OTHER ASSETS
a. Current Bank guarantees and bonds Prepayments Other 8. INTANGIBLE ASSETS a. Non-current Licenced operations Accumulated amortisation 9. LEASES a. Right of use assets Properties b. Lease liabilities Current Non-current 10. TRADE AND OTHER PAYABLES a. Current Trade payables Sundry payables and accrued expenses Accrued interest on convertible notes	31 December 2020 30 June 2020
	$ $
	359,289 158,794 259,960 97,525 2,421 863
	621,670 257,182
	31 December 2020 30 June 2020
	$ $
	2,855,550 3,471,216 (307,832) (615,666)
	2,547,718 2,855,550
	31 December 2020 30 June 2020
	$ $
	1,816,073 1,425,159
	1,816,073 1,425,159
	534,282 529,651 1,569,837 1,080,961
	2,104,119 1,610,612
	31 December 2020 30 June 2020
	$ $
	924,032 1,481,988 1,556,978 1,755,246 59,201 1,233
	2,540,211 3,238,467

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

11. BORROWINGS

1. BORROWINGS
Note a. Current Convertible notes (i) & (ii) Loans (iii) Short term loans (iv) Related Party Loan (v) 12 b. Non-current Long-term loan (vi)	31 December 2020 30 June 2020
	$ $
	650,000 650,000 46,093 87,492 60,113 81,833 209,198 326,315
	965,404 1,145,640
	223,960 223,960
	223,960 223,960

(i) Convertible Note (Unsecured)

Face value:	$150,000
Coupon:	10% - accrues and ispayable on a monthlybasis
Maturity:	A variation to the terms was agreed on 28 September 2020 to vary the terms to mature on 28 September 2021. All other terms remaininginplace.
	The loan-holder shall have the option of requesting repayment in full from the
	borrower either in cash or in the issue of ordinary shares at the conversion price of
Conversion:	$0.05 per share, subject to a conversion notice by the redemption date being 12 months from date of issue and ending on the final conversion date subject to
	arrangement by the Company and Shareholder approval and in full compliance with
	ASX ListingRules.

(ii) Convertible Note (Unsecured)

Face value:	$500,000
Coupon:	10% - accrues and ispayable on a monthlybasis
Maturity:	A variation to the terms was agreed on 14 November 2020 to vary the terms to mature on 31 March 2021. All other terms remaininginplace.
	The loan-holder shall have the option of requesting repayment in full from the
	borrower either in cash or in the issue of ordinary shares at the conversion price of
Conversion:	$0.05 per share, subject to a conversion notice by the redemption date being 12 months from date of issue and ending on the final conversion date subject to
	arrangement by the Company and Shareholder approval and in full compliance with
	ASX ListingRules.

(iii) Loans

The unsecured loans are interest bearing.

(iv) Short term loan

Loan is repayable within 12 months and is unsecured and interest bearing.

(v) Related party loan

Loan is repayable within 12 months and is unsecured and non-interest bearing.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

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FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

11. BORROWINGS (continued)

(vi) 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

12. 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.

Balance 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 Group and other related parties are disclosed below.

There is a loan outstanding payable to Mr Ashish Katta of $470,000 at half-year end (30 June 2020: $484,724) being an amount payable as a result of an equity sell-down completed pre-acquisition. No interest is accrued on the loan and will be repaid to him as and when he provides notice to the company subject to available cash and sufficient working capital remaining in the company.

There is a loan outstanding receivable from Sero Learning Pty Ltd, of which Mr Ashish Katta is a Director, of $260,802 (30 June 2020: $172,169). There is a right of set-off in place on which the amount is net off against the amount owing to Ashish Katta. This results in a net payable of $209,198 (30 June 2020: $312,555).

13. PROVISIONS

3. PROVISIONS
a. Current Provision for annual leave Provision for long service leave	31 December 2020 30 June 2020
	$ $
	319,569 224,801 4,662 4,224
	324,231 229,025

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

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FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

14. ISSUED CAPITAL

4. ISSUED CAPITAL
Fully paid ordinary shares at no par value a. Ordinary shares Shares issued during the period/year: Placement shares issued at $0.10 per share Transaction costs relating to share issues At reporting date	6 months to 31 December 2020 12 months to 30 June 2020 6 months to 31 December 2020 12 months to 30 June 2020
	No. No. $ $
	526,564,649 526,564,649 29,986,452 29,986,452 55,000,000 - 5,500,000 - - - (1,017,250) -
	581,564,649 34,469,202

a. Options Options At the beginning of the period Options issued/(lapsed) during the year: Expired 03/07/2020 Expired: 12/02/2020 Issued to broker:(i) Expiry Date: 10/07/20 Exercise Price: $0.05 Expiry Date: 10/07/2023 Issued to broker:(ii) Expiry Date: 09/11/2023 Exercise Price: $0.15 At reporting date	6 months to 31 December 2020 12 months to 30 June 2020 6 months to 31 December 2020 12 months to 30 June 2020
	No. No. $ $
	7,500,000 27,500,000 1,957,234 1,957,234 (7,500,000) (20,000,000) 10,000,000 165,000 12,000,000 682,000
	22,000,000 7,500,000 2,804,234 1,957,234

(i) 10 million options issued on 10 July 2020 to key strategic advisors to the business, particularly around Linguaskill. Options were issued in lieu of cash fees paid for services performed.

(ii) 12 million options to be issued to various participating brokers involved in the $5.5m capital raise in November 2020.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

15. OPERATING SEGMENTS

5. OPERATING SEGMENTS
6 months ended 31 December 2020 Segment Income Revenue from customers Other income Finance income Total income Segment Expenses Cost of goods sold Finance costs Depreciation and amortisation Net other costs Total expenses Segmented profit before income tax 31 December 2020 Segment Assets and Liabilities Reportable segment assets Reportable segment liabilities Net assets / (deficiency) 6 months ended 31 December 2019 Segment Income Revenue from customers Other income Finance income Total income Segment Expenses Cost of goods sold Finance costs Depreciation and amortisation Net other costs Total expenses Segmented loss before income tax 31 December 2019 Segment Assets and Liabilities Reportable segment assets Reportable segment liabilities Net assets / (deficiency)	Financing Education Services Consolidated
	$ $ $
	- 7,885,968 7,885,968 181,000 755,100 936,100 92 804 896
	181,092 8,641,872 8,822,964
	- (3,623,281) (3,623,281) (38,100) (135,901) (174,001) (310,329) (384,495) (694,824) (1,280,029) (1,912,675) (3,192,704)
	(1,628,458) (6,056,352) (7,684,810)
	(1,447,366) 2,858,520 1,138,154
	5,809,032 6,005,196 11,814,228 (2,692,861 (6,219,342) (8,912,203)
	3,116,170 (214,145) 2,902,025
	Financing Education Services Consolidated
	$ $ $
	- 7,021,177 7,021,177 - - - 2 1,465 1,467
	2 7,022,642 7,022,644
	- (2,139,483) (2,139,483) (26,736) (206,042) (232,778) (311,272) (322,816) (634,088) (894,357) (3,315,093) (4,209,450)
	(1,232,365) (5,983,434) (7,215,799)
	(1,232,365) 1,039,208 (193,155)
	336,407 7,336,597 7,673,004 (2,381,530) (6,409,575) (8,791,105)
	(2,045,123) 927,022 (1,118,101)

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

16. EVENTS SUBSEQUENT TO REPORTING DATE

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 Group, the results of those operations, or the state of affairs of the Group in future reporting periods.

17. CONTINGENT LIABILITIES

There has been no change in contingent liabilities since the last reporting period.

18. COMMITMENTS

There has been no change in commitments since the last reporting period.

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DIRECTORS’ DECLARATION

FOR THE HALF-YEAR ENDED 31 DECEMBER 2020

The Directors of the Company declare that:

1. The consolidated financial statements and notes, are in accordance with the Corporations Act 2001 (Cth) and:

(a) complying with Australian Accounting Standards, the Corporations Regulations 2001, professional reporting requirements and other mandatory requirements; and

(b) give a true and fair view of the financial position as at 31 December 2020 and of the performance for the half-year ended on that date of the Company.

1. In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors pursuant to s303(5) of the Corporations Act 2001 (Cth) and is signed for and on behalf of the directors by:

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ASHISH KATTA CEO & Managing Director Dated this Wednesday 10 February 2021

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Independent Auditor’s Review Report

To the Members of iCollege Limited

Conclusion

We have reviewed the accompanying half-year financial report of iCollege Limited (“the Company”) and Controlled Entities (“the Consolidated Entity”) which comprises the consolidated statement of financial position as at 31 December 2020, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, a summary of significant accounting policies and other selected explanatory notes, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of iCollege Limited and Controlled Entities does not comply with the Corporations Act 2001 including:

• a. Giving a true and fair view of the iCollege Limited financial position as at 31 December 2020 and of its performance for the half-year ended on that date; and

• b. Complying with Accounting Standard AASB 134: Interim Financial Reporting and Corporations Regulations 2001 .

Basis for Conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity. Our responsibilities are further described in the Auditor’s Responsibilities for the Review of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants that are relevant to our audit of the annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001 which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s review report.

Independent Auditor’s Review Report To the Members of iCollege Limited (Continued)

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Responsibility of the Directors for the Financial Report

The directors of the iCollege Limited are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such control as the directors determine is necessary to enable the preparation of the half-year financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility for the Review of the Financial Report

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2020 and its performance for the halfyear ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

A review of a half-year financial report consists of making enquiries, 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 Australian Auditing Standards 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.

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BENTLEYS Chartered Accountants

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DOUG BELL CA Partner

Dated at Perth this 10[th] day of February 2021

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