GetSmarter Online Limited

Registered number

09755054

Report and Accounts

for the 12 months ended

31 December 2017

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

General information


Country of incorporation and domicile				United Kingdom

Nature of business and principle activities				Provision of educational online courses

Director				CA Graham

Registered Office				74 Rivington Street
				London England
				EC2A 3AY

Business address				74 Rivington Street
				London England
				EC2A 3AY

Postal address				74 Rivington Street
				London England
				EC2A 3AY

Holding company				Get Educated International Propietary Limited
				incorporated in South Africa

Bankers				Barclays Bank

Auditors				The annual report and financial statements were independently audited by KPMG LLP


Company registration number				09755054

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Index


The reports and statements set out below comprise the annual report and financial statements presented to the shareholder.

Page

Director's Report	3
Statement of Director's Responsibilities in respect of the Director's Report and the financial statements	4
Independent Auditors' Report to the members of GetSmarter Online Ltd	5
Statement of Financial Position	7
Statement of Comprehensive Income	8
Statement of Changes in Equity	9
Statement of Cashflows	10
Accounting Policies	11-20
Notes to the Annual Report and Financial Statements	21-33

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Director's Report

The director submits her report for the 12 months ended 31 December 2017.

1.	Principle activity

GetSmarter Online Ltd (the "Company") is principally engaged in providing non-degree online education courses to working professionals in collaboration with leading universities.

2.	Incorporation and trading details

The Company was incorporated in the United Kingdom on 1 September 2015 and was dormant until 31 December 2015. The Company started trading on 1 January 2016.

3.	Results and Dividends

The loss for the period, after taxation, amounted to $853,209 (2016: $505,891). There was no dividend declaration during the period.

4	Directors

The directors of the company during the 12 months and to the date of this report are as follows:

	Name	Changes
	M Britz	Appointed 1 September 2016, resigned 11 March 2019
	RJ Paddock	Resigned 1 July 2017
	SE Cates	Appointed 1 July 2017, resigned 31 August 2017
	MJ Norden	Appointed 1 July 2017, resigned 31 January 2018
	CA Graham	Appointed 1 February 2018

5	Financial Instruments

The Company's financial instruments comprise financial assets and liabilities, that arise directly from its transactions with external stakeholders and group undertakings.

6	Small companies note

In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

7	Disclosure information to auditors

The director who held office at the date of approval of this director's report confirm that, so far as she is aware, there is no relevant audit information of which the company’s auditor is unaware; and has taken all the steps that she ought to have taken as a director to make herself aware of any relevant audit information and to establish that the company’s auditor is aware of that information.

8	Liquidity and solvency

KPMG LLP were appointed as the Company's auditors during 2018, for the Audit of the 2017 Financial year-end.

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Statement of Director's Responsibilities in respect of the Director's Report and the financial statements

The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and International Reporting Standards as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:


●	select suitable accounting policies and then apply them consistently;
●	make judgements and estimates that are reasonable, relevant and reliable;
●	state whether they have been prepared in accordance with IFRSs as adopted by the EU;
●	assess the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
●	use the going concern basis of accounting unless they either intend to liquidate the company or to cease operations or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The annual financial statements set out on pages 7 to 33, which have been prepared on the going concern basis, were approved by the director on 04 April 2019 and were signed on its behalf by:



CA Graham

4 April 2019

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Independent auditor's report to the members of GetSmarter Online Limited

Opinion

We have audited the financial statements of GetSmarter Online Limited ("the company") for the year ended 31 December 2017 which comprise the Statement of Financial Position, Statement of Comprehesive Income , Statement of Changes in Equity, Statement of Cash Flows, and related notes, including the accounting policies in note 1.

In our opinion the financial statements:

●	give a true and fair view of the state of the company's affairs as a 31 December 2017 and of its loss for the year then ended;
●	have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union; and

●	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our responsibilties are describd below. We have fulfilled our ethical responsibilities under, and are independent of the company in accordance with, UK ethical requirements including the FRC Ethical Standard. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion.

The impact of uncertainties due to the UK exiting the European Union on our audit
Uncertainties related to the effects of Brexit are relevant to understanding our audit of the financial statements. All audits assess and challenge the reasonableness of estimates made by the directors and related disclosures and the appropriateness of the going concern basis of preparation of the financial statements prepared. All of these depend on assessments of the future economic environment and the company's future prospects and performance.

Brexit is one of the most signficant economic events for the UK, and at the date of this report its effects are subject to unprecedented levels of uncertainty of outcomes, with the full range of possible effects unknown. We applied a standardised firm-wide approach in response to that uncertainty, other than in the areas excluded from the scope of the audit, when assessing the company's future prospects and performance. However, no audit should be expected to predict the unknowable factors or all possible future implications for a company and this is particulary the case in relation to Brexit.

Going concern
The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the company or cease its operations, and as they have concluded that the company's financial position means this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements ("the going concern period").

We are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least a year from the date of approval of the financial statements. In our evaluation of the directors' conclusions, we considered the inherent risks to the company's business model, including the impact of Brexit, and analysed how those risks might affectthe company's financial resources or ability to continue operations over the going concern period. We have nothing to report in these respects.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the absense of reference to a material uncertainy in this auditor's report is not a guarantee that the company will continue in operation.

Directors' report

The directors are responsible for the directors' report. Our opinion on the financial statements does not cover that report and we do not express an audit opinion thereon.
Our responsibility is to read the directors' report and, in doing so, consider whether, based in our financial statements audit work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based soley on that work:
●	we have not identified material misstatements in the directors' report;
●	in our opinion the information given in that report for the financial year is consistent with the financial statements; and
●	in our opinion that report has been prepared in accordance with the Companies Act 2006.

Matters on which we are required to report by exception


Under the Companies Act 2006, we are required to report to you if, in our opinion:
●	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
●	the financial statements are not in agreement with the accounting records and returns; or

●	certain disclosures of directors' remuneration specified by law are not made; or
●	we have not received all the information and explanations we require for our audit; or
●	the directors were not entitled to take advantage of the small companies exemption from the requirement to prepare a stategic report.

We have nothing to report in these respects.

Directors' responsibilities

As explained more fully in their statement set out on page 4, the directors are responsible for: the preparation of the financial statements and for being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to a fraud or error, and to issue our opinion in an auditor's report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably by expected to influence the economic decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC's website at www.frc.org.uk/auditorsresponsibilities.

The purpose of our audit work and to whom we owe our responsibilities

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of the Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permittd by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.


Robert Searle (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
9 April 2019

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Statement of Financial Position

Figures in US dollar
31 December			31 December
Notes		2017		2016
$			$

Assets

Non-Current Assets
Property, plant and equipment	3	4,065		5,159
Intangible assets	4	475,531		215,967
		479,596		221,126

Current Assets
Loan to related party	5	245,949		-
Current tax receivable		-		4,959
Trade and other receivables	6	1,347,107		756,188
Cash and cash equivalents	7	933,610		3,548,264
		2,526,666		4,309,411

Total Assets		3,006,262		4,530,537


Equity and Liabilities

Equity
Share capital	8	132		132
Reserves	9	3,120		-
Accumulated loss		(1,359,100)		(505,891)
		(1,355,848)		(505,759)

Liabilities

Non-Current Liabilities
Deferred tax	10	65,385		13,691

Current Liabilities
Loan from related party	5	-		2,269,426
Trade and other payables	11	2,028,191		489,867
Deferred Income	12	1,965,847		1,931,830
Provisions	13	302,687		331,482
		4,296,725		5,022,605

Total Liabilities		4,362,110		5,036,296

Total Equity and Liabilities		3,006,262		4,530,537


The financial statements were approved by the board of directors on 04 April 2019 and were signed on its behalf by:



CA Graham

Registration number 09755054

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Statement of Comprehensive Income
12 months				16 months
Figures in US dollar			ended	ended
Notes		31 December		31 December
			2017		2016
$				$

Revenue	14		10,281,730		7,793,511

Cost of services	15		(4,543,058)		(3,427,374)

Gross profit			5,738,672		4,366,137

Other income			184,169		-
Operating expenses			(6,719,633)		(4,817,613)

Operating loss	16		(796,792)		(451,476)

Investment revenue	19		237		1,915

Loss before taxation			(796,555)		(449,561)

Taxation	20		(56,654)		(56,330)

Loss for the financial year			(853,209)		(505,891)

Other comprehensive income			-		-

Total comprehensive loss			(853,209)		(505,891)

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Statement of Changes in Equity

Figures in US dollar
	Share		Share based		Accumulated		Total
	capital		payment		loss
	(note 8)		reserve
			(note 9)
$		$		$		$

Balance at September 1, 2015	-		-		-		-
Changes in equity
Total comprehensive income for the 16 months	-		-		(505,891)		(505,891)
Shares issued	132		-		-		132

Total changes	132		-		(505,891)		(505,759)
Balance at January 1, 2017	132		-		(505,891)		(505,759)
Changes in equity
Total comprehensive income for the 12 months	-		-		(853,209)		(853,209)
Share based payment	-		3,120				3,120
Total changes	-		3,120		(853,209)		(850,089)
Balance at December 31, 2017	132		3,120		(1,359,100)		(1,355,848)

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Statement of Cash Flows
12 months				16 months
Figures in US dollar			ended	ended
Notes		31 December		31 December
			2017		2016
$				$
Cash flows from operating activities

Cash used in operations	21		218,460		1,792,420
Interest income			237		1,915
Net cash from operating activities			218,697		1,794,335

Cash flows from investing activities

Purchase of property, plant and equipment	3		(925)		(5,679)
Sale of property, plant and equipment	3		107		-
Purchase of other intangible assets	4		(317,158)		(155,470)
Increase in intangible assets	4		-		(64,753)
Net movement in related parties			(2,515,375)		2,327,740
Net cash from investing activities			(2,833,351)		2,101,838

Cash flows from financing activities

Proceeds on share issue	8		-		132


Total cash movement for the 12 months			(2,614,654)		3,896,305
Cash at the beginning of the 12 months			3,548,264		-
Effect of exchange rate movement on cash balances			-		(348,041)
Total cash at end of the 12 months	7		933,610		3,548,264

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Accounting Policies


1.	Presentation of Annual Report and Financial Statements

GetSmarter Online Limited is a private company incorporated, domiciled and registered in England in the UK. The registered number is 09755054 and the registered address is 74 Rivington Street London England EC2A 3AY. The annual report and financial statements of GetSmarter Online Limited ("The company") have been prepared in accordance with International Financial Reporting Standards, as adopted by the European Union, and the applicable laws and regulations of the United Kingdom. The annual report and financial statements have been prepared using the measurement basis specified by IFRS as adopted by the European Union, for each type of asset, liability, income and expenses, and incorporate the principal accounting policies set out below. They are presented in US Dollars, the company's functional and presentation currency and all values represent absolute amounts, except where otherwise stated.

1.1	Significant judgements and sources of estimation uncertainty

In preparing the annual report and financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual report and financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual report and financial statements. Significant judgements include:

Trade receivables, Held to maturity investments and Loans and receivables

The company assesses its trade receivables, held to maturity investments and loans and receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in profit or loss, the company makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from a financial asset. The impairment for trade receivables, held to maturity investments and loans and receivables is calculated on a portfolio basis, based on historical loss ratios, adjusted for national and industry-specific economic conditions and other indicators present at the reporting date that correlate with defaults on the portfolio. These annual loss ratios are applied to loan balances in the portfolio and scaled to the estimated loss emergence period.

Provisions

Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions are included in note 13 - Provisions.

Taxation

Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The company recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in the foreseeable future. Assessing the recoverability of deferred income tax assets requires the company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the company to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

1.2	Property, plant and equipment

The cost of an item of property, plant and equipment is recognised as an asset when: ● it is probable that future economic benefits associated with the item will flow to the company; and ● the cost of the item can be measured reliably. Property, plant and equipment is initially measured at cost. Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value. Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. The useful lives of items of property, plant and equipment have been assessed as follows:

	Item	Average useful life
	Audio visual equipment	3 years
	Furniture and fittings	6 years
	IT equipment	3 years

The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate. The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset. The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.

1.3	Intangible assets

An intangible asset is recognised when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and the cost of the asset can be measured reliably. Intangible assets are initially recognised at cost. An intangible asset arising from development (or from the development phase of an internal project) is recognised when: ● It is technically feasible to complete the asset so that it will be available for use or sale. ● There is an intention to complete and use or sell it. ● There is an ability to use or sell it. ● It will generate probable future economic benefits. ● There are available technical, financial and other resources to complete the development and to use or sell the asset. ● The expenditure attributable to the asset during its development can be measured reliably. Intangible assets are carried at cost less any accumulated amortisation and any impairment losses. The amortisation period and the amortisation method for intangible assets are reviewed every period-end. Amortisation is provided to write down the intangible assets , on a straight line basis, to their residual values as follows:

	Item	Useful life
	Domain	indefinite
	Internally developed courses	4 years

1.4	Financial instruments

Classification

The company classifies financial assets and financial liabilities into the following categories: ● Loans and receivables ● Financial liabilities measured at amortised cost

Initial recognition and measurement

Financial instruments are recognised initially when the company becomes a party to the contractual provisions of the instruments. The company classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are measured initially at fair value, except for equity investments for which a fair value is not determinable, which are measured at cost and are classified as available-for-sale financial assets. For financial instruments which are not at fair value through profit or loss, transaction costs are included in the initial measurement of the instrument.

Subsequent measurement

Loans and receivables are subsequently measured at amortised cost, using the effective interest method, less accumulated impairment losses. Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method.

Impairment of financial assets

At each reporting date the company assesses all financial assets, other than those at fair value through profit or loss, to determine whether there is objective evidence that a financial asset or group of financial assets has been impaired. Impairment losses are recognised in profit or loss. Impairment losses are reversed when an increase in the financial asset's recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been had the impairment not been recognised. Reversals of impairment losses are recognised in profit or loss except for equity investments classified as available-for-sale.

Loans to (from) related parties

These include loans to and from holding companies, fellow subsidiaries, subsidiaries, joint ventures and associates and are recognised initially at fair value plus direct transaction costs. Loans to related parties are classified as loans and receivables. Loans from related parties are classified as financial liabilities measured at amortised cost.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. The carrying amount of the asset is reduced through the use of an allowance account, and the mount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss. Trade and other receivables are classified as loans and receivables.

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value.

1.5	Tax

Current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount aleady paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax assets and liabilities A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred tax asset is recognised for the carry forward of unused tax losses and unused STC credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused STC credits can be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Tax expenses Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from: ● a transaction or event which is recognised, in the same or a different period, to other comprehensive income, or ● a business combination. Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income. Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity.

1.6	Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.

1.7	Impairment of assets

The company assesses at each end of the reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss. An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease. The increased carrying amount of an asset other than goodwill attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss of assets carried at cost less accumulated depreciation or amortisation other than goodwill is recognised immediately in profit or loss. Any reversal of an impairment loss of a revalued asset is treated as a revaluation increase.

1.8	Share capital and equity

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Share capital

Share capital represents the nominal value of shares that have been issued.

Retained Income

Retained income represents the current and prior period results of operations as reported in profit and loss.

1.9	Share based payments

Goods or services received or acquired in a share-based payment transaction are recognised when the goods or as the services are received. A corresponding increase in equity is recognised if the goods or services were received in an equity settled share-based payment transaction or a liability if the goods or services were acquired in a cash-settled share-based payment transaction. When the goods or services received or acquired in a share-based payment transaction do not qualify for recognition as assets, they are recognised as expenses. For equity-settled share-based payment transactions the goods or services received and the corresponding increase in equity are measured, directly, at the fair value of the goods or services received provided that the fair value cannot be estimated reliably. If the fair value of the goods or services received cannot be estimated reliably, their value and the corresponding increase in equity, indirectly, are measured by reference to the fair value of the equity instruments granted. For cash-settled share-based payment transactions, the goods or services acquired and the liability incurred are measured at the fair value of the liability. Until the liability is settled, the fair value of the liability is re-measured at each reporting date and at the date of settlement, with any changes in fair value recognised in profit or loss for the period. If the share based payments granted do not vest until the counterparty completes a specified period of service, company accounts for those services as they are rendered by the counterparty during the vesting period, (or on a straight line basis over the vesting period).

If the share based payments vest immediately the services received are recognised in full. For share-based payment transactions in which the terms of the arrangement provide either the entity or the counterparty with the choice of whether the entity settles the transaction in cash (or other assets) or by issuing equity instruments, the components of that transaction are recorded, as a cash-settled share-based payment transaction if, and to the extent that, a liability to settle in cash or other assets has been incurred, or as an equity-settled share-based payment transaction if, and to the extent that, no such liability has been incurred.

1.10	Employee Benefits

Short-term employee benefits
The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted. The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

1.11	Provisions and contingencies

Provisions are recognised when: ● the company has a present obligation as a result of a past event; ● it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and ● a reliable estimate can be made of the obligation. The amount of a provision is the present value of the expenditure expected to be required to settle the obligation. Provisions are not recognised for future operating losses.

1.12	Revenue

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax. The group recognises revenue when the amount can be reliably measured, it is probable that future economic benefits will flow to the group and when specific criteria have been met for each of the group’s activities as described below. The group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Course and Programme Revenues

Revenue is recognised at fair value of the amount receivable over the period of the programme delivery. Any course and programme revenue received in advance is presented as deferred income in the Statement of Financial Position and recognised as revenue over the period of the programme delivery. Interest is recognised, in profit or loss, using the effective interest rate method.

1.13	Cost of sales

The related cost of providing services recognised as revenue in the current period is included in cost of sales.

1.14	Translation of foreign currencies

Foreign currency transactions

A foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the end of the reporting period: ● foreign currency monetary items are translated using the closing rate; ● non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and ● non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous annual financial statements are recognised in profit or loss in the period in which they arise.

When a gain or loss on a non-monetary item is recognised to other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised to other comprehensive income and accumulated in equity. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss. Cash flows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash flow.

GetSmarter Online Limited
Registration number 097550543
Annual financial statements for the 12 months ended 31 December 2017

Notes to the Annual Financial Statements

2.	New Standards and Interpretations

At the date of approval of these annual financial statements, certain new accounting standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the entity. Management anticipates that all of the pronouncements will be adopted in the entity's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the entity's financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the entity's financial statements.

2.1	Standards and Interpretations early adopted

The company has chosen to early adopt the following standards and interpretations:

	Standard/Interpretation:				Effective date:
					Years beginning on or after
	IFRS 15: Revenue from Contracts with Customers				1 January 2018

2.2	Standards and interpretations not yet effective

The company has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the company’s accounting periods beginning on or after 01 January 2018 or later periods:

	Standard/Interpretation:				Effective date:		Expected impact:
					Years beginning on or after
	IFRS 9: Financial instruments				1 January 2018		Not yet assessed
	IFRS 16: Leases				1 January 2019		Not yet assessed

The aggregate impact of the initial application of the statements and interpretations on the company's annual financial statements is not expected to be material.

3.	Property, plant and equipment


		Audio visual equipment		IT equipment		Fixtures and fittings		Total
$			$		$		$
	Cost
	At 1 January 2017	5,280		399		-		5,679
	Additions	-		-		925		925
	Surplus on revaluation	-		-		-		-
	Disposals	(69)		-		-		(69)
	At 31 December 2017	5,211		399		925		6,535

	Depreciation
	At 1 January 2017	491		29		-		520
	Charge for the year	1,798		133		19		1,950
	Surplus on revaluation	-		-		-		-
	On disposals	-		-		-		-
	At 31 December 2017	2,289		162		19		2,470

	Net book value
	At 31 December 2017	2,922		237		906		4,065
	At 31 December 2016	4,789		370		-		5,159




4.	Intangible fixed assets
				Internally developed courses		Domain		Total
$					$		$
	Cost
	At 1 January 2017			67,553		152,670		220,223
	Additions			317,158		-		317,158
	Disposals			-		-
	At 31 December 2017			384,711		152,670		537,381

	Amortisation
	At 1 January 2017			4,256		-		4,256
	Provided during the year			57,594		-		57,594
	On disposals			-		-		-
	At 31 December 2017			61,850		-		61,850

	Net book value
	At 31 December 2017			322,861		152,670		475,531
	At 31 December 2016			63,297		152,670		215,967

Other information

The costs of internally developed courses are capitalised based on the employee cost portion of the intercompany management fee (see note 25) and other direct operating costs utilised in the development of courses. Management believes there is no foreseeable future limit to the period which the domain is expected to generate net cash inflows for the entity, hence classified as intangible asset with indefinite useful life.

5.	Loans to (from) related parties

Fellow subsidiaries						2017		2016
$							$
Get Educated Proprietary Limited						116,905		(2,269,426)
2U GetSmarter UK Limited						129,044		-
						245,949		(2,269,426)

The above loans are unsecured, bears no interest and have no fixed terms of repayment.

	Current assets					245,949		-
	Current liabilities					-		(2,269,426)
						245,949		(2,269,426)


6.	Trade and other receivables

						2017		2016
$							$

	Deposits					13,866		19,238
	University and head tutor fees prepayment					634,232		556,102
	Prepayments					429,697		-
	Trade receivables					266,096		180,848
	Accounts receivable - 2U GetSmarter UK Limited					1,799		-
	Accounts receivable - Get Educated Proprietary Limited					1,417		-
						1,347,107		756,188

Trade and other receivables past due but not impaired

Trade and other receivables which are less than 3 months past due are not considered to be impaired. At December 31, 2017, $24,642 (2016: $ 13,562) were past due but not impaired. The ageing of amounts past due but not impaired is as follows:

	1-30 days					24,642		13,562
	30-60 days					-		-
	60-90 days					-		-
						24,642		13,562
Trade and other receivables impaired

As of 31 December, 2017, trade and other receivables of $ 60,520 were impaired and provided for.

7.	Cash and cash equivalents
						2017		2016
Cash and cash equivalents consist of:						$	$

	Bank balances					933,610		3,548,264

Credit quality of cash at bank and short term deposits, excluding cash on hand

The credit quality of cash at bank and short term deposits, excluding cash on hand that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or historical information about counterparty default rates:

	Credit rating
	Barclays Bank (A1)					576,779		3,505,259
	Other - Stripe account					356,831		43,005
						933,610		3,548,264


8.	Share capital
						2017		2016
$							$
	Authorised
	10,000,000 Ordinary shares with no par value					-		-

	Reconciliation of number of shares issued:
	Issue of shares					10,000,000		10,000,000

	Issued
	10,000,000 issued shares with no par value					132		132


9.	Share based payments

In July 2017, 2U Incorporated, the Company's Ultimate Holding Company granted restricted stock units under their 2014 Plan to the Company's Executive Committee and certain of the Company's employees. The terms of the restricted stock unit grants under the 2014 Plan, including the vesting periods, are determined by the 2U Incorporated's board of directors or the compensation committee thereof. Restricted stock units are generally subject to service-based vesting conditions and vest at various times from the date of the grant, with most restricted stock units vesting in equal annual tranches, generally over a period of four years.

								Total number of shares

	Outstanding balance at 31 December 2016							-
	Granted during the year							532
	Outstanding balance at 31 December 2017							532

The total compensation cost related to the nonvested restricted stock units not yet recognized as of 31 December 2017 was $3,120 and will be recognized over a weighted-average period of approximately 4.1 years.

10.	Deferred tax
						2017		2016
$							$
	Deferred tax liability

	Property, Plant and Equipment					(813)		(1,032)
	Intangible assets					(64,572)		(12,659)
						(65,385)		(13,691)

	Reconciliation of deferred tax liability

	At beginning of the year					(13,691)		-
	(Originating) temporary difference on property, plant and equipment					219		(1,032)
	(Originating) temporary difference on intangible assets					(51,913)		(12,659)
						(65,385)		(13,691)


11.	Trade and other payables
						2017		2016
$							$

	Trade payables					1,240,426		356,089
	VAT					228,565		129,697
	Salary control accounts					6,718		3,705
	Accrued leave pay					3,182		376
	Accounts payable - 2U GetSmarter UK Limited					86,693		-
	Accounts payable - Get Educated Proprietary Limited					462,607		-
						2,028,191		489,867


12.	Deferred income

Deferred income arises as the entity receives advance payments for courses that as at year end date have either not started, or have started but not yet completed. The value of the deferred income is the total cash received before year end in respect of these courses.
						2017		2016
$							$
	Non-current liabilities					-		-
	Current liabilities					1,965,847		1,931,830
						1,965,847		1,931,830


13.	Provisions

Reconciliation of provisions - 2017
		Opening balance		Additions		Utilised during the year		Total
Provision for cancellations and deferrals		-		254,389		-		254,389
Provision for uncertain tax liabilities		331482		-		(283,184)		48,298
		331,482		254,389		(283,184)		302,687

Reconciliation of provisions - 2016
				Opening balance		Additions		Total
Provision for uncertain tax liabilities				-		331,482		331,482

GetSmarter Online Limited has made sales to the United States of America, and hence may be subject to US sales tax and state taxes. Management has estimated the uncertain tax liability and a provision has been raised.

14.	Revenue
						2017		2016
$							$
	Rendering of services					10,281,730		7,793,511


	Primary geographical areas:
	United States of America					4,534,755		3,416,206
	Singapore					494,828		1,024,705
	Hong Kong					381,759		701,888
	United Kingdom					374,098		590,544
	Canada					1,044,835		585,082
	Spain					533,284		269,160
	Switzerland					203,457		260,183
	South Africa					390,982		255,900
	Australia					175,150		243,576
	India					269,066		206,171
	Other					1,879,516		240,096
						10,281,730		7,793,511

	Revenue per university
	Massachusetts Institute of Technology					7,182,440		7,754,710
	Harvard University					1,170,659		-
	London School of Economics					944,629		-
	University of Cambridge					868,143		-
	University of Chicago					63,250		-
	University of London Goldsmiths					52,609		38,801
						10,281,730		7,793,511

	Timing of revenue recognition
	Services transferred over time					10,281,730		7,793,511


14.	Revenue (continued)
The performance obligation to be satisfied by Get Smarter Online Limited in order for revenue to be recognised is the online presentation of courses over the duration of the course (ranges between 8 weeks to 16 weeks). Get Smarter Online Limited has a history of presenting courses to students timely. The only instance when payments are received from customers and a course is not presented is if there is insufficient interest in the course, which has not occurred for the 2017 financial year. Get Smarter Online Limited has the necessary resources and ability to present courses to students, evidenced by the high course completion rate. Get Smarter Online Limited's performance obligation is satisfied over the period of the presentation of the course. Customer payments must be made before the start of the course for the student to be enrolled on the course. Customers can choose to make a part payment plan, but full payments must be made before the end of each presentation of the course. Get Smarter Online Limited is obligated to refund a customer in full if the customer submits a request to cancel before the start of the presentation of the course, and 50% of the course fee if the cancellation is requested before 50% of the course is completed. Get Smarter Online Limited offers no warranties to customers. Contract revenue is recognised over the period of the presentation of the course, which is clearly defined and no significant judgement is required. Course material is released to students on a weekly basis, and is not available to students in advance. Students have access to the teaching staff daily through online forums and consume the course material on a daily basis over the week. Revenue is therefore recognised as the performance obligation is satisfied, on a daily basis.


15.	Cost of services
						2017		2016
$							$
	Rendering of services
	Cost of services - university and head tutor fees					4,543,058		3,427,374


16.	Operating loss

Operating loss for the year is stated after accounting for the following:
						2017		2016
$							$
Operating lease charges
Premises
●	Contractual amounts					108,998		42,234

Profit on sale of property, plant and equipment						38		-
Loss on exchange differences						(184,131)		206,545
Amortisation on intangible assets						57,594		4,256
Depreciation on property, plant and equipment						1,950		519
Employee costs						208,648		75,116
Research and development						-		2,625


17.	Auditors' remuneration
						2017		2016
$							$

	Fees payable to the company's auditor and it's associates for the audit of the Company's annual financial statements					236,869		-
	Fees payable to the company's auditor and it's associates in respect of all other services					-		255

18.	Employees
						2017		2016
$							$
	Staff costs, including directors' remuneration, were as follows:
	Wages and salaries					191,286		65,746
	Social security costs					17,362		9,343
						208,648		75,089

	Number of employees					2		1


19.	Interest revenue

	Bank interest					237		1,915


20.	Taxation

						2017		2016
$							$
	Current

	Corporate tax					4,960		(5,659)
	Income tax due - from other jurisdiction					-		48,298
						4,960		42,639

	Deferred

	Originating and reversing timing differences					51,694		13,691
						56,654		56,330

	Reconciliation of the tax expense

	Reconciliation between applicable tax rate and average effective tax rate.
%							%
	Applicable tax rate					19.00		20.00

	Non-deductible expenses - Uncertain US state taxes					-		(10.74)
	Non-deductible expenses - Uncertain US state taxes					-		(12.60)
	Tax loss not recognised					-		(9.19)
	Impact of net loss before tax					(19.00)		-
	Temporary differences					(7.11)		-
						(7.11)		(12.53)

21.	Cash used in operations
						2017		2016
$							$

	Loss before taxation					(796,555)		(449,561)
	Adjustments for:
	Depreciation and amortisation					59,544		4,776
	Profit on sale of assets					(38)		-
	Loss on foreign exchange					-		468,068
	Interest received					(237)		(1,915)
	Movements in provision for uncertain tax liability					(283,184)		283,185
	Movements in provision for cancellations and deferrals					254,389		-
	IFRS2 Share based expense					3,120		-

	Changes in working capital:
	Trade and other receivables					(590,919)		(955,074)
	Trade and other payables					1,538,324		511,111
	Deferred income					34,016		1,931,830
						218,460		1,792,420


22.	Financial assets by category

The accounting policies for financial instruments have been applied to the line items below. The carrying amounts of the financial assets in each category are as follows:
						2017		2016
$							$
	Loans and receivables
	Cash and cash equivalents					933,610		3,548,264
	Loan to related party					245,949		-
	Trade and other receivables					283,178		200,086
						1,462,737		3,748,350


23.	Financial liabilities by category

The accounting policies for financial instruments have been applied to the line items below. The carrying amounts of the financial liabilities in each category are as follows:

	Financial liabilities at amortised cost
						2017		2016
$							$

	Loan from related party					-		(2,269,426)
	Provision for cancellations and deferrrals					(254,389)		-
	Provision for uncertain tax liabilities					(48,298)		(331,482)
	Trade and other payables					(1,799,626)		(360,181)
						(2,102,313)		(2,961,089)


24.	Commitments
						2017		2016
$							$
	Operating leases - as lessee (expense)

	Minimum lease payments due
	- within one year					88,494		86,703
	- in second to fifth year inclusive					30,960
						119,454		86,703

The company leases an office under an operating lease. The future lease payments are disclosed above.

Lease expense during the period amounts to $108,998, representing contractual lease payments.

The rental contract has a minimum lease period until 30 April 2018. Cancellation with a 3 month notice period.

25.	Related parties

Relationships

Holding company				Get Educated International Propietary Limited

Fellow subsidiaries				Get Educated Proprietary Limited
				2U GetSmarter UK Limited

Members of key management				CA Graham

				MJ Norten

Related party blances

Loan accounts - owing (to) by related parties						2017		2016
$							$
	Get Educated Proprietary Limited					116,905		(2,269,426)
	2U GetSmarter UK Limited					129,044		-
						245,949		(2,269,426)

Related party transactions

	Management fees paid to related party
	Get Educated Proprietary Limited
	Classified as cost of sales					632,407		743,242
	Classified as operating expenses					5,693,808		3,216,523
						6,326,215		3,959,765

26.	Directors' emoluments

	Executive

	2017 (12 months)
Emoluments						Other benefits	Total

	Director's fees			120,267		17,726		137,993

	2016 (16 months)
Emoluments						Other benefits	Total

	Director's fees			28,261		9,343		37,604

	These amounts have been included as part of operating expenses.

	One of the directors in 2017 (2016: One) listed on page 1 was a full time salaried employee of the company. No other directors received any emoluments during the year.


27.	Risk management

Financial risk management

The company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

Liquidity risk

The company’s risk to liquidity is a result of the funds available to cover future commitments. The company manages liquidity risk through an ongoing review of future commitments and credit facilities. Cash flow forecasts are prepared and adequate utilised borrowing facilities are monitored. The table below analyses the company’s financial liabilities and net-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.

	At 31 December 2017					Less than
						12 months		Total

	Provision for uncertain tax liabilities					(48,298)		(48,298)
	Provision for cancellations and deferrals					(254,389)		(254,389)
	Trade and other payables					(2,028,191)		(2,028,191)
						(2,330,878)		(2,330,878)

	At 31 December 2016

	Loan from related party					(2,269,426)		(2,269,426)
	Provision for uncertain tax liabilities					(331,482)		(331,482)
	Trade and other payables					(489,878)		(489,878)
						(3,090,786)		(3,090,786)

Interest rate risk

As the company has no significant interest-bearing assets, the company’s income and operating cash flows are substantially independent of changes in market interest rates.

Credit risk

Credit risk is the potential that a counter party fails to meets its obligations in accordance with agreed terms. Credit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments and trade debtors. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party. Financial assets exposed to credit risk at 12 months end were as follows:
						2017		2016
$							$
	Financial instrument
	Bank balance					933,610		3,548,264
	Trade receivables					269,312		180,848
	Deposits					13,866		19,238

GetSmarter proactively contacts students who have not paid timely and offer payment extensions where applicable. No course completion certificate is issued to students if there are any course fees outstanding.

Foreign exchange risk

The company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to South African Rand and the UK Pound. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities. No forward exchange contracts or currency options were entered into. At 31 December 2017, if GBP had weakened/strengthened by 10% against the USD with all other variables held constant, post-tax profit for the period would have been $37,000 - lower/higher, mainly as a result of foreign exchange gains or losses on translation of USD denominated cash balance, trade and other payables and trade and other receivables. At 31 December 2017, if ZAR had weakened/strengthened by 10% against the USD with all other variables held constant, post-tax profit for the period would have been $246,265 - higher/lower, mainly as a result of foreign exchange gains or losses on loans from related party.

28.	Fair value disclosure

Fair value hierarchy Financial assets, financial liabilities and non-financial assets measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement as follows: Level 1: Quoted unadjusted prices in active markets for identical assets or liabilities that the group can access at measurement date. Level 2: Inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. The company does not have any non-financial assets measured at fair value. Financial Instruments measured at cost for which a fair value is disclosed. Financial assets that are not measured at fair value, namely trade and other receivables (excluding prepayments) and cash and cash equivalents are categorised as loans and receivables. It has been concluded that the carrying amounts of these assets approximate their fair values. Refer to notes 6 and 7. Financial liabilities that are not measured at fair value, namely trade and other payables and loans from related party are categorised as other financial liabilities. It has been concluded that the carrying amount of these liabilities approximate their fair values. Refer to notes 5 and 11.

Level 1: Cash and cash equivalents Level 3: Trade and other receivables (excluding prepayments) Trade and other payables (excluding VAT control accounts) Loans from related party

29.	Capital management objectives, policies and procedures

The Company’s capital management objectives are to ensure the Company’s ability to continue as a going concern. The Company manages its capital through monitoring its operational profitability and cash flows and financing capital as needed. The Company’s related parties, including that of the parent, is committed to provide financing as the need may arise. Further, optimum level of operational cash flows is maintained through customer down payments.

30.	Ultimate parent company and parent company of larger group

The Company is a subsidiary undertaking of 2U Inc. which is the ultimate parent company incorporated in the USA. The largest group in which the results of the Company are consolidated is headed by 2U Inc, Lanham, Maryland USA. The smallest group in which they are consolidated is headed by Get Educated International (Pty) Ltd, Cape Town, South Africa. The ultimate consolidated financial statements of 2U Inc are available to the public and may be obtained from 2u.com.

31.	Events after the reporting period

There were no subsequent events after the reporting period that would have materially impacted the 2017 financial statements.

32.	Going concern

The company incurred a net loss for the year ended 31 December 2017 of $853,209 (2017: loss of $505,891) and as at that date its total liabilities exceeded its total assets by $1,355,848 (2016: total assets exceeded total liabilities by $505,759) and current liabilities exceeded its current assets $1,770,059 (2016: $713,194). The loss-making position arises from a number of factors, including but not limited to additional costs to acquire new partners and develop new courses, additional direct marketing expenditure, additional staff to support compliance and future growth in the business as a whole. The directors have considered and approved a plan that anticipates profit at an adjusted EBITDA (EBITDA adjusted for share based payments) level in 2019. The plan involves and is not limited to, more efficiency from advertising spends blossoming curve, negotiating lower revenue share arrangements with new University partners, 20 new courses in planned production for the year ended 31 December 2017, with 22 and 59 in the pipeline for 2018 and 2019 respectively. The entity has prepared cash flow forecasts for a period of 20 months from the date of approval of these financial statements which indicate that the estimated cash flows are sufficient to pay for the costs incurred in the normal course of business. The ultimate holding company, 2U Incorporated, has agreed to provide financial support to GetSmarter Online Limited to enable the company to pay its debts as it becomes due in the ordinary course of business. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so. Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.