Ann: EVO Annual Report for FY 31 March 2020, page-3

Woo, alright.

During the year ended 31 March 2020, the Group acquired ten ECE centres from four separate vendors across Queensland and Victoria, Australia, for a total consideration of $21.6 million. Total net liabilities acquired were $0.9 million resulting in goodwill on acquisition of $22.5 million. There have been no material adjustments to the provisional values of these acquisitions. That is the entire purchase price was made up of goodwill and they are held at purchase value.

They explain, "the goodwill of $22.5 million predominantly comprises the future earnings potential of bringing together
a group of ECE centres under one centrally managed group. This is something that Evo have failed to do since 2014 - where it was outlined in the prospectus as an initial risk. Goodwill impairment is measured using Evo's favoured,"fair value of customer relationships acquired in a business combination determined using the notional price per customer methodology." I'd be much more comfortable with a plain and simple
"market value" measure.

Whatever way, with enrolments in childcare tracking far below the same period last year, and in the absence of any signs of improvement back even to those unsatisfactory level, surely a significant goodwill impairment will be required? Then it's a question of the size of the impairment as to the impact on the overall financial strength of the company.