Education Development International plc
Annual Report and Accounts 2006 Contents
1 Highlights  
2 Chairman’s Statement
4 Chief Executive’s Report
8 Directors and Advisors
10 Corporate Governance
12 Remuneration Report
14 Directors’ Report
17 Statement of Directors’ Responsibilities
18 Independent Auditors’ Report
19 Consolidated Income Statement
20 Consolidated and Parent Company
Statement of Recognised Income 
and Expense
21 Consolidated and Parent Company
Balance Sheets
22 Consolidated and Parent Company 
Cash Flow Statements
23 Notes to the Financial Statements
60 Five Year Financial Review
61 Notice of Annual General Meeting
63 Form of Proxy Education Development International plc
Annual Report and Accounts
1
Highlights
n Results in line with expectations reflecting progress in both overall business performance
and the development of the Group’s infrastructures.
n Financial overview (IFRS basis):
Year ended Year ended
30 September 30 September
2006 2005 Growth
Revenue (£m) 14.18 13.19 7.5%
Operating profit/(loss) (£m) 1.36 (0.05) –
Adjusted profit (£m)* 1.13 0.74 52.7%
Earnings/(loss) per share (p) 2.3 (0.2) –
Adjusted earnings per share (p)* 2.2 1.4 57.1%
* Before the movement in the onerous lease provision adjusted for net finance costs.
n Adjusted profit up by 52.7%.
n Maiden dividend of 0.2p per share recommended.
n Acquisitions of the Joint Examining Board Limited and, after the end of the financial year, the
Jetset range of English language qualifications.
n Appointment of additional sales staff in the UK and key Overseas markets.
n Review of qualifications production system to automate processes and speed the
development and launch of new services.
n 43% shareholding formerly held by London Chamber of Commerce and Industry Commercial
Education Trust placed with institutional investors and private client fund managers. 2
Chairman’s Statement
Review of Results
2005/06 has been a very productive year during which
EDI has reinforced its position as a leading provider of
vocational and business qualifications and of innovative
technology-based assessment services.
Over the course of the year we have adopted
International Financial Reporting Standards (IFRS) and
completed major organisation and systems development
programmes.At the same time we have strengthened
our business development capability both in the UK and
internationally.
These results reflect the acquisition of the Joint
Examining Board (JEB) with effect from 26 May 2006.
Audited accounts for the year to 30 September 2006
show a turnover of £14.18m (2005: £13.19m).The
operating profit for the year was £1.36m (2005: loss of
£53,000).Adjusted profit for the year was £1.13m
£2005: £735,000).This comprises the operating profit
adjusted for the movement in the onerous lease
provision and the net interest charge for the year.
Basic earnings per share were 2.3p (2005: loss of 0.2p)
and the adjusted earnings per share were 2.2p
(2005: 1.4p).
The lease of the former Leamington Spa head office
building was assigned in December 2005 and we have
had some success in sub-letting space in the former
London Chamber of Commerce and Industry
Examinations Board (LCCIEB) offices in Sidcup.The
onerous lease provision at 30 September 2006 of
£901,000 represents full provision for all vacant
properties until the end of the lease terms.
At 30 September 2006 net cash stood at £2.3m 
(2005: £1.8m).
As anticipated, the Board is delighted to announce that
it has recommended the payment of a maiden dividend
of 0.2p per share.The dividend will be paid on 5 January
2007 to shareholders who were on the register on 1
December 2006.
Business Development
The vocational qualifications and assessment services
business in the UK has continued to make good
progress although the renewal rate for schools’ services
has been lower than anticipated. In international markets
our position has been consolidated with improved
performance in Germany and the new financial
arrangements with our agent in Zimbabwe working
satisfactorily.
In parallel with our organisational changes, we have
undertaken a review of our full range of qualifications
and assessments.This has led to new arrangements being
introduced for the commissioning and accreditation of
our services which will both increase the efficiency of
our development cycle and more effectively ensure the
quality of our qualifications.This exercise has also
included a review of our ‘back office’ service contracts,
especially those based on the i-assess platform acquired
from BPP Holdings plc during 2004.
The acquisition of JEB and from 2 October 2006 the
Jetset range of English language qualifications has
expanded our range of services and introduced new
customer groups.
Our frontline business development capability has been
strengthened with the appointment of a new Director
of Business Development.This has led to a restructuring
of our existing sales teams and the appointment in the
UK of additional experienced field sales staff.Work is
also under way to reorganise and strengthen our field
sales capability in international markets. New
appointments have already been made in Asia and
Cyprus and discussions with key agents about future
arrangements are underway.
This emphasis on business development for the year
ahead will be supported by an increased level of
marketing and promotional activity in both the UK and
our international markets.
Organisation Development
We have continued to invest in our business
infrastructure. In addition to completing the move into
our new headquarters building in Coventry, we have
relocated the i-assess software team in Livingston, Education Development International plc
Annual Report and Accounts
3
Scotland, opened an office in Limassol, Cyprus — and
appointed three staff there — and through Educational
Resources, we have set up an administration centre for
Asia in Kuala Lumpur, Malaysia.
On the business systems front we have completed the
design and build of our bespoke qualifications
administration platform, Campus.This project was
expanded significantly from the original plan and has
enabled us to introduce comprehensive changes to our
business processes. Campus has been used to operate
our international services since last November.The final
stages of rolling out the system to support our UK
business commenced on 1 October 2006.We expect to
be in a position to decommission all legacy systems by
early 2007.
The completion of these fundamental organisation and
systems development projects marks the conclusion of
a major capital investment programme.
Board and Staff
I would like to take this opportunity to thank my
colleague Directors for their ongoing support and
commitment.
My particular thanks and congratulations go to all of the
staff of EDI who have contributed so ably to a wide
range of organisational and business development
initiatives over the past year.
Prospects
As these results show, our extensive organisation
development programme — which is now successfully
completed — has had a positive impact on our
performance.We have also made good progress in
updating and extending our range of qualifications and
growing our customer base, particularly in the UK.
We are well placed to exploit further the benefits of
our new structure and systems over the year ahead and
the prospects for organic growth are good.As
previously reported we are investing in market entry
opportunities and continue to investigate acquisition
opportunities with a view to expanding the scale and
range of our services both in the UK and internationally.
I look forward to reporting further positive progress
during the year ahead.
Richard Price
Chairman
20 November 2006 4
Chief Executive’s Report
Introduction
Our priorities over the past year have been to complete
our organisation and systems development projects, and
to move the focus of our attention on to market
centred service and business development activities.
Sound progress on these fronts has enabled the Group
both to deliver significant growth in profitability and
enhance EDI’s reputation with accreditation bodies, our
wide range of commercial partners and customers.
The turnover analysis set out below provides
comparative data for the main areas of business activity.
Year to 30 September
2006 2005
£m £m
UK qualifications and
assessment services 6.74 5.91
International qualifications 5.28 5.11
Service contracts 2.11 2.00
Other 0.05 0.17
T otal 14.18 13.19
Services
UK Qualifications and Assessment Services
Sales of UK qualifications and assessment services for
the year rose by 14% to £6.74m.
Our vocational qualifications business — which excludes
sales to schools — grew by 19%.This includes revenue
from the acquisition of the Joint Examining Board (JEB)
which contributed £122,000 during the second half of
the year.This performance reflects continued progress
with our existing customers, growth in new business —
with around 150 new customers signed up, including 40
further education colleges — and the positive impact of
new products, particularly our online key skills and
technical certificate assessments.
We have continued to work closely with a number of
Sector Skills Councils.After a competitive tendering
exercise, the new Creative and Cultural Skills Council
appointed EDI as its preferred awarding services
partner.We have also worked closely with the Financial
Services Skills Council and recently announced the
launch of a new range of qualifications in retail financial
services which focus on banking, general and life
insurance and investment administration.
We have also been involved in small scale, specialist
assessment development activity working with
Learndirect, a number of Connexions Services in
England and Careers Scotland.
New sales of assessment services to schools have been
at the same level as last year but renewal rates have
been lower than expected.To counter this we have set
up a professional unit to support new and existing
school customers through a programme of training
events, seminars and proactive follow-up activity.
During the final quarter of the year we undertook an
extensive communication and training programme to
prepare our vocational qualifications services customers
for the roll-out of our new Campus administration
platform with effect from 1 October 2006.This has
been a major undertaking but successful implementation
of the new system will enable us to greatly enhance our
level of administrative support to our customers and
enable us to deliver industry leading service levels.
Over the course of the year we have continued to
develop and refine our range of qualifications and the Education Development International plc
Annual Report and Accounts
5
acquisition of JEB — which provides a range of specialist
vocational training and ICT teaching qualifications — has
added an important new dimension to our product
range.
We continue to build our business development and
customer relationship management capability.This is
particularly important for the UK vocational
qualifications market where the key differentiator
between the larger awarding bodies is customer service
and support.To reinforce this, we are developing long-
term partnership arrangements with our larger private
sector training provider and FE college customers.
Having reviewed the operation of our Schools
Continuous Improvement Programme during the
second half of the year we now have detailed plans in
place to refresh the delivery platform and better focus
the presentation and packaging of our services to
schools.We expect these developments and the
creation of the professional support unit to have a
positive impact on both new sales and renewal rates.
International Qualifications
Sales of international qualifications for the year rose by
3.3% to £5.28m. It is pleasing to note that the actions
taken over the past 18 months have had the effect of
halting the decline in sales as recorded in previous
reports. Indeed, had it not been for the impact of the
currency crisis in Zimbabwe which, as reported
previously, has had a direct impact on revenues then the
growth in sales would have been in the order of 10%.
Although we now have a hard currency agreement in
place with our Zimbabwe agent which has generated
around £40,000 of revenue in the second half, numbers
of students and revenues are expected to decline
significantly over the coming year and this has been
taken into account in our plans.
In our important South East Asia market sales were up
by 6% with particularly strong growth in Hong Kong.
However, the markets in Malaysia and Singapore are still
somewhat fragile and require careful management and
support.After a challenging period in the German
market as a result of a generally weak economic
situation, sales recovered well in the second half leading
to overall growth of 3% for the year as a whole.
Sales in Cyprus, the Eastern Mediterranean and the
Middle East have strengthened considerably since the
appointment of a field representative based in Cyprus
and our decision to open a local office in Limassol to
take over day-to-day administrative responsibilities from
the British Council. In particular, our success in securing
an initial contract with the Kuwait Petroleum
Corporation is acting as an important shop window for
our English language assessment services in the Middle
East and particularly with the petro-chemicals industry.
We have been using the Campus administration platform
to service our international qualifications markets for
almost twelve months and this has had a significant
impact on the efficient running of our complex exams
administration arrangements. Most important, the
introduction of Campus has enabled us to devolve
significant aspects of this work to Educational Resources
(our subsidiary in Asia), to our new office in Cyprus and
to a number of agents.The system also allows us to be
much more responsive to short-term customer
requirements including last minute examination
registrations. 6
Chief Executive’s Report
We have overhauled our arrangements for examiner
management which includes the production of exam papers.
This process will be further automated during the course of
the year with the introduction of a Test Management System
which we are currently in the final stages of developing.The
management of our international qualifications development
work has been significantly strengthened by the appointment
of the former JEB executive director to the post of Head of
International Qualifications.
The continuous process of reviewing and modernising
our range of business qualifications — including the
launch of a new Introduction to Book-keeping qualification
— and English language qualifications has led to the
development of a number of new syllabi. Our English
range has also been augmented by the acquisition of the
Jetset (Junior English T est and Senior English T est)
examinations from AQA and securing the rights to a
specialist T eachers of English for Speakers of Other
Languages (TESOL) programme which links well with the
JEB range of trainer training qualifications.
Work will continue to make more of our international
qualifications available online where there is a clear demand
for this service and sufficiently robust local IT networks.
Key to developing our international qualifications
business is the appointment of further full-time EDI field
staff to ensure we have local representation in each of
our main continental markets.As part of this plan to
manage more tightly our distribution channel we will
also be reviewing with our agents the arrangements
under which they currently operate to ensure that we
have full geographical and product range coverage in
each of our established and developing markets.This
approach will enable us to manage more directly
marketing and public relations activities on a co-
ordinated, worldwide basis.
Service Contracts
Sales of service contracts for the year were up 5.5% at
£2.11m.This includes the impact of a mutual agreement
to wind up one of our unprofitable contracts which
generated revenue of £145,000 last year. Revenue
growth of 14% was achieved on continuing contracts.
Our priorities for the year were to review and carefully
define the specification for each of our service contracts
and to refine the i-assess online assessment delivery
platform which we acquired from BPP Holdings plc.This
exercise has led to organic growth in existing contracts
and a better understanding of future opportunities with
our existing customer base.
The in-house development of our Campus
administration platform and the completion of our
relocation and reorganisation projects reduced the
management time available to focus on securing new
service contracts. However, with the completion of
these projects, greater emphasis will be placed on
targeted marketing of our logistics, qualifications
administration and software services over the year
ahead.This will include seeking to expand and develop
our relationship with our logistics services partner.
Organisation Development
As reported elsewhere, our various relocation and
reorganisation projects are now complete.We have made
good progress in disposing of surplus leases, including the
assignment of the lease for the previous head office
building in Leamington Spa and sub-letting of space in the
former London Chamber of Commerce and Industry
Examinations Board offices in Sidcup, Kent. In total, this
has enabled us to release £198,000 from the Group’s Education Development International plc
Annual Report and Accounts
7
onerous lease provision and the remaining provision is
now sufficient to cover fully all costs in relation to vacant
properties until the end of the lease terms.We are
continuing to market the remaining space actively and
hope to report further progress during the first half of the
new financial year.
During the course of the past year we have fine-tuned
our organisation structure to reflect the benefits of
continued automation of our administrative
arrangements and the switch of emphasis towards
business development and customer relationship
management.This is reflected in the changing balance of
staff numbers between the main areas of business
activity.
Staff levels at 30 September
2006 2005
Operations 56 44
Education Development 21 18
Business Development 43 31
Finance and Administration 22 23
T otal 142 116
The number of staff employed by Educational Resources
— included above — in its network of offices around
South East Asia has increased by 2 to 26.This reflects
the setting up of the new administration office in Kuala
Lumpur and the appointment of additional sales staff.
Integration of the JEB operation has been relatively
straightforward as only one senior member of staff
came across with the organisation.The operation of the
small JEB office which had two staff was wound up at
the end of September.
The integration of the Jetset product range — which we
have operated under licence since July and formally
acquired on 2 October 2006 — was achieved without
the transfer of any staff and was completed during
October.
With the commencement of the final stages of the roll-
out of the Campus administration platform from 
1 October our major systems development activity is
now all but complete. However, we will continue to
refine and develop the Campus platform as well as
developing new systems to improve efficiency and
quality control, including our Test Management System.
Looking Ahead
Our key business development activity for the 2006/07
financial year is to exploit fully our new organisation
structure, business systems, product range and
strengthened sales capability, both in the UK and
overseas.We will, of course, pay particular attention to
the products and markets which offer the greatest
opportunities for growth.At the same time, we will also
focus on the smaller foreign markets which have been
under managed and in decline for a number of years but
where there is the possibility to return to growth.
We will continue to explore opportunities to augment
our existing range of products to provide an extended
range of services to our customers.This could include
the production of new support materials — which can
be available either in paper-based or electronic form —
professional trainer training services and business and
administration consultancy and solutions.
We are continuing to research and seek out
opportunities to work with higher education institutions
in the UK and abroad where we believe the opportunity
exists for strong links between EDI’s range of
qualification services and graduate programmes. Such
strategic partnerships, building on our extensive
international network of agents and education
providers, present the opportunity for joint product
development as well as the establishment of student
recruitment and support services.
In addition to these in-house developments, we continue
to investigate potential acquisition opportunities either
to strengthen our qualifications and assessment
activities or to enable us to speed up our entry into
related areas which offer the greatest prospect of
exploiting business synergies.
Over the past three years EDI has become an influential
force in the UK qualifications and assessments industry
and we continue to be one of the largest exporters of
examination services working in over 80 countries.
Following our extensive investment programme over
the past 18 months and building on this year’s trading
performance the management team and staff of EDI are
excited about the prospects for the development of our
business over the year ahead.
Nigel Snook
Chief Executive
20 November 2006 8
Directors and Advisors
Executive Directors
Nigel Snook
Chief Executive
Nigel joined the Board of EDI plc in May 2001 and was
appointed Chief Executive later that year.
Nigel has over 30 years’ experience of working in and
leading both private and public sector organisations
which provide education and employment services.
Before joining EDI, he was Chief Executive of Lantra,
the Sector Skills Council for the land-based and
environmental sector.
He is actively involved in local vocational education,
training and guidance work through his membership of
the Coventry and Warwickshire Learning and Skills
Council and the Executive Board of the Coventry and
Warwickshire Connexions Service.
Neal Gossage
Finance Director and Company Secretary
After graduating in 1976, Neal joined Price Waterhouse
(now PricewaterhouseCoopers) and qualified as a
Chartered Accountant in 1979. He joined Lucas
Industries in 1980 and progressed through a number of
financial and management accounting roles with various
companies before becoming Financial Controller of
Argos plc. He has more recently been Group Finance
Director of Swallow Hotels Group plc (formerly Vaux
Group plc) and Specialist Computer Holdings plc. Neal
joined EDI in February 2005 and was appointed to the
Board in June 2005.
Non-executive Directors
Richard Price
Independent Non-executive Director, Chairman
Richard was appointed Chairman of EDI plc in January
2005, having joined the Board in 2003. He is co-founder
and retired Chairman of BPP Holdings plc, the UK
leader in the field of postgraduate qualifications training
for accountants, lawyers, tax specialists, actuaries and
other financial professionals.A chartered accountant
and tax specialist by training, Richard is a Non-executive
Director of AIM-quoted Tikit Group plc, Chairman of
The Bach Choir and is a Council Member of the Royal
College of Music.
Sir Bryan Nicholson 
Senior Independent Non-executive Director
Sir Bryan sits on two international financial reporting
regulatory bodies and advises several organisations.
He is the former Chairman of the Financial Reporting
Council, the Post Office, BUPA and other organisations.
Barrie Clark 
Independent Non-executive Director
Barrie holds Non-executive directorships with a number
of public and private companies. He is Non-executive
Chairman of IS Solutions plc and chairs and sits on
numerous remuneration and audit committees. He was
the founder of Link Organisation plc which merged with
Spring Group plc. His various roles at Spring Group plc
included Non-executive Chairman and Senior
Independent Director. Barrie’s executive background
focused on financial and operational management in
small to medium sized businesses. Education Development International plc
Annual Report and Accounts
9
Wynford Dore 
Non-executive Director
Wynford was a founding shareholder of GOAL plc. In
1999 he founded the company DDAT, which pioneers
revolutionary, drug free treatments for people with
learning difficulties including dyslexia, dyspraxia and
Aspergers Syndrome. Until 1998 he was Chairman of
Nullifire Limited, a company he established in 1973. He
began his career in 1967 as a computer systems analyst
at Jaguar Cars.
Advisors
Registered Office: International House, Siskin
Parkway East, Middlemarch Business Park, Coventry,
CV3 4PE
Registered No: 3914767
Web site: www.ediplc.com
Auditors: RSM Robson Rhodes LLP, Chartered
Accountants, Centre City Tower, 7 Hill Street,
Birmingham, B5 4UU
Bankers: Barclays Bank PLC, Bromley Business Centre,
PO Box 160, Donegal House, 73 Tweedy Road, Bromley,
Kent, BR1 1UE
Nominated Advisor and Broker: Brewin Dolphin
Securities Limited, Edmund House, 12–22 Newhall
Street, Birmingham, B3 3DB
Registrars: Capita Registrars,The Registry,
34 Beckenham Road, Beckenham, Kent, BR3 4TU
Solicitors: Gateley Wareing LLP, One Eleven, Edmund
Street, Birmingham, B3 2HJ. 10
Corporate Governance
General Principles
The Group is committed to high standards of corporate
governance.Although the Group is not required to
comply with the Combined Code, the following
discusses the structures and procedures adopted by the
Group as part of its corporate governance practices.
The Board
During the year the Board consisted of:
Executive Directors
l Mr N M Snook (Chief Executive)
l Mr N T Gossage 
Non-executive Directors
l Mr R Price (Chair)
l Mr B A Clark
l Mr W N Dore
l Mr B N Harris (resigned 26 January 2006)
l Sir Bryan Nicholson 
All of these Directors have access to the advice and
services of the Company Secretary.
There is a clear division of responsibilities between the
Chairman, who is responsible for running the Board,
and the Executive Directors, who are responsible for
running the business.
The Board meets regularly and agrees the Group
business plan, determines overall Group strategy,
acquisition, investment, human resource and health and
safety policies and is responsible for the approval of
major items of capital expenditure and significant
financial matters.There is a written statement of items
reserved for consideration by the Board and an agreed
procedure for Directors to take independent
professional advice, if necessary, at the Company’s
expense. Newly appointed Directors receive
appropriate guidance as soon as practicable after
appointment should they lack previous experience as a
director of a listed company.
Sir Bryan Nicholson is the senior independent non-
executive Director, Mr B A Clark and Mr R Price are
independent non-executive Directors. Mr W N Dore is
a non-executive Director.
The independent non-executive Directors bring an
independent judgement to the management of the
Group.They are free from any business or other
relationships which could interfere with the exercise of
their judgement.
Details of Directors’ remuneration can be found in 
note 8.
Committees of Board
The Remuneration Committee 
During the year the members of the remuneration
committee were:
l Sir Bryan Nicholson (Chair)
l Mr B A Clark
l Mr W N Dore
l Mr R Price 
The Audit Committee
During the year the members of the audit committee
were:
l Mr B A Clark (Chair)
l Mr B N Harris (resigned 26 January 2006)
l Sir Bryan Nicholson (appointed 26 May 2006)
l Mr R Price
The Nominations Committee 
During the year the members of the nominations
committee were:
l Mr B N Harris (resigned 26 January 2006)
l Sir Bryan Nicholson (appointed Chair 26 January
2006)
l Mr N M Snook 
The following documents are available for inspection by
the shareholders at the Company’s registered office:
l Terms of reference of the audit, remuneration and
nominations committees
l Directors’ service contracts
Accountability and Audit
The Audit Committee has written terms of reference
which require it to consider and report to the Board
on such issues as the Group’s annual accounts and
interim reports, major accounting issues and
developments, the appointment of the external auditors
and the audit fee, any question of the objectivity of the
auditors, the Company’s statement on internal control
systems and the scope and findings of the external
audit.At those meetings attended by the auditors there
is an opportunity for discussion between the non-
executive Directors and the auditors in the absence of
the executive Directors. Education Development International plc
Annual Report and Accounts
11
Internal Control
The Board is responsible for the Group’s systems of
internal control, for reviewing its effectiveness and
recognises that these systems are designed to manage
rather than eliminate the risk of failure to achieve
business objectives.
Within the UK business, the Board monitors risk
management through an ongoing process and provides
assurance that the significant risks faced by the Group
are being identified, evaluated and appropriately
managed.This process has been in place for the year
under review and up to the date of approval of the
annual report and financial statements.
The main elements of the internal control systems are:
l A formal management structure with a schedule of
matters specifically reserved for the Board’s
approval.The executive Directors and other senior
members of the Group meet regularly to control
and monitor the Group’s activities.
l A budget setting process with both annual and
longer-term forecasts reviewed and approved by the
Board.
l A comprehensive monthly financial reporting system
is in place and results are compared with budgets,
together with a written report detailing current
trading conditions, variations from budget and
updated forecasts.
l A report to the Audit Committee from the auditors
stating the material findings arising from the audit.
This report is also considered by the main Board
and action taken where appropriate.
l A framework for capital expenditure and controls
including authorisation procedures and rules relating
to the delegation of authority.
l Risk management policies to manage issues relating
to health & safety, the environment, legal
compliance, quality assurance, insurance and security.
The Directors have reviewed the effectiveness of these
procedures.A detailed review of the procedures manual
and Turnbull Risk Analysis has been carried out during
the year.The Group does not have an internal audit
department, although the need for one is reviewed
from time to time.
Going Concern
The Directors, after having made appropriate enquiries,
including a review of the Group’s budget for 2006/7 and
indicative budgets for 2007/8 and 2008/9, have a
reasonable expectation that the Group has adequate
resources to continue in operational existence for the
foreseeable future. For this reason, they continue to
adopt the going concern basis in preparing the financial
statements.
Shareholder Communications
The Group places a high level of importance on
communicating with its shareholders and welcomes and
encourages such dialogue within the constraints of the
Stock Exchange guidelines.At the 2006 Annual General
Meeting proxy votes will be announced after the show
of hands on each occasion. 12
Remuneration Report
The Directors present the remuneration report  for
the year ended 30 September 2006.
This report has not been prepared in accordance with
the Directors Report Regulations 2002 because as an
AIM listed company Education Development
International plc does not fall within the scope of the
regulations.
Remuneration Committee
The Company’s Remuneration Committee comprises
Sir Bryan Nicholson (Chairman), Mr B A Clark, Mr R
Price and Mr W A Dore.The Remuneration Committee
recommends within agreed terms of reference, an
overall remuneration package for the executive
Directors, non-executive Directors, senior executives
and the Group’s Chairman.
Remuneration Policy
The objectives of the Group’s remuneration policy are
to attract, retain and motivate high quality executives
capable of achieving the Group’s objectives and thereby
enhancing shareholder value.
The package for Directors consists of basic salary and
benefits, performance related bonuses and share
options.
A summary of each element of the remuneration
package is set out below.
(i) Basic salary and benefits
Basic salary and fees are determined after taking
account of each Director’s responsibilities, performance
and seniority, and of market salary levels for similar jobs
in comparable companies. Basic salaries are reviewed
annually taking into account both Company and
individual performance.
Benefits (normally car or car allowance, pension, life
insurance, permanent health insurance and medical
insurance) are set at a level comparable with those
granted to executives at a similar level in peer
companies.
The fees for non-executive Directors are determined
by the Board and reflect the time commitment and
responsibilities for each role and are reviewed
periodically.
(ii) Bonuses
Executive Directors are eligible to receive an annual
bonus based on the achievement of business and
individual performance targets. Bonuses are paid at the
discretion of the Remuneration Committee.
(iii) Share Options
The Company has an unapproved executive share
option scheme and a Save As You Earn (SAYE) scheme,
the details of which are shown in note 30 to the
accounts. Executive Directors are eligible to be granted
options under the unapproved scheme and one
executive Director participates in the SAYE scheme.
Performance criteria are set for executive share options
which require the increase in the Company’s share
price to exceed RPI by a fixed percentage over a fixed
period of time.
The Remuneration Committee has now introduced an
alternative performance target based on the growth in
the Group’s adjusted earnings per share (EPS).This
target requires adjusted EPS to grow at 20% per annum
each year.This alternative target has been introduced
because the increase in the Company’s share price has
failed to match the increase in the adjusted EPS.
Adjusted EPS for the purposes of the scheme is based
on adjusted profit. Existing executive share options will
vest if either of the performance targets are achieved.
No new options have been granted to executive
Directors in the year ended 30 September 2006.
(iv) Pensions
The Company makes contributions to personal pension
arrangements.
Directors’ Contracts
The Chairman and non-executive Directors have letters
of appointment setting out details of annual fees
payable. Non-executive Directors do not have specific
contracts but do offer themselves for re-election every
three years.
Mr N M Snook has a service contract that allows for
twelve months’ notice from the Company and from the
executive. Mr N T Gossage has a service contract that
allows for six months’ notice from the Company and
from the executive. Education Development International plc
Annual Report and Accounts
13
Directors’ Emoluments
The aggregate emoluments, in respect of their roles as
Directors, of the Directors of the Company who
served during the year are shown in note 8 to the
accounts.
Directors’ Pension Schemes
Mr N M Snook was a member of the Company’s
defined contribution pension scheme until 6 April 2006
(‘A’ Day as defined in the Pensions Act 2004).After that
day, no further contributions were made to the scheme
and an equivalent adjustment was made to Mr N M
Snook’s salary.
Mr N T Gossage was a member of the Company’s
defined contribution pension scheme throughout 
the year.
Interests in Options
Details of share options granted to the executive
Directors are provided in note 24 to the accounts.
Approved by the Board and signed on its behalf
Sir Bryan Nicholson
Chairman of the Remuneration Committee
20 November 2006  14
Directors’ Report
The Directors present their report and the audited financial
statements for the year ended 30 September 2006.
Business Review and Principal Activities
The Group’s activities include the supply of a wide range
of UK vocational qualifications and school assessments,
the provision of specialist assessment and administrative
services for other awarding and professional bodies and
the supply of international qualifications.There have been
no significant changes in the Group’s principal activities in
the year under review.The Directors are not aware at the
date of this report of any likely major changes in the
Group’s activities in the next year.
On 26 May 2006 the Group acquired the entire share
capital of Joint Examining Board Limited, a company that
provides qualifications for education professionals.
The trade and net assets of EQL Assessment Limited
were transferred to Education Development
International plc with effect from 1 October 2005.
As shown in the consolidated income statement on page
19, the Group has achieved another year of growth with
revenue up by 7.5% and operating profit increasing by
£1,415,000 to £1,362,000 (2005: operating loss of
£53,000). Sales of vocational qualifications performed
strongly and the Directors expect growth to continue
into the coming year through the launch of new
products and a continued focus on business
development activity.
The UK qualifications and assessment services business
remains the key area of operation for the Group,
accounting for 47% of sales. During the year sales in the
UK qualifications and assessments services business have
been growing faster than other business segments.The
Directors have continued to pursue their goal of
expansion in all markets.
The balance sheet on page 21 of the financial statements
shows that the Group’s financial position is consistent
with the growth experienced in the last 12 months.
Retained profit has increased by £1,491,000 to
£1,103,000 (2005: retained loss of £388,000) and the
year end cash balance was £2.3m (2005: £1.8m).
Details of revenue and profit trends and the market and
competitive environment are provided in the Chief
Executive’s Report on page 4.
Post balance sheet event
On 2 October 2006 the Group acquired the business and
goodwill of Jetset, a business providing Junior English T est
and Senior English T est qualifications.
Key Performance Indicators
2006 2005
Adjusted Operating
Profit growth* 53% 12%
Sales growth 8% 20%
Gross Margin 70% 71%
Adjusted EPS† 2.2p 1.4p
* Adjusted Operating Profit is stated before the
movement on onerous lease adjusted for net finance
costs.
† Adjusted EPS is based on adjusted operating profit.
Actual growth in adjusted Operating Profit exceeded the
previous year’s growth by 41% in the year.This was
achieved through additional efficiencies, the acquisition of
JEB and cost savings following the reorganisation and
relocation of the UK operations completed in the
second half of 2005.
Sales growth in the year was 8%.As explained in the
Chief Executive’s Report on page 4, International
Qualifications sales growth has been adversely affected by
the currency crisis in Zimbabwe.
Gross margin achieved of 70% is broadly in line with the
71% achieved in the previous year.
Adjusted EPS of 2.2p is significantly ahead of the previous
year due to the improvements in adjusted Operating
Profit as explained above. Education Development International plc
Annual Report and Accounts
15
Principal risks and uncertainties facing
the Group
The markets for vocational and international qualifications
remain steady and customers are increasingly taking
advantage of ‘on-line’ tests and assessments.The principal
risks in the UK market centre around the reliance on a
small number of key customers and a change in
government policy towards the funding or accreditation of
vocational qualifications. In international markets, the
Group is exposed to general economic conditions,
exchange rate fluctuations and changes in local
government policies.
The Group manages these risks by working closely with
the UK and overseas authorities and has an active
account management plan for each of the major
customers in the UK.
Financial Instruments
The risks faced by the Group, including financial risk,
credit risk, liquidity risk and cash flow interest rate risk
and the Group’s management of these risks are detailed
in note 23 of the accounts on page 41.
Environment
The Group’s policy with regard to the environment is to
ensure a full understanding of the environmental effect of
the Group’s activities.The Group is not involved in any
activities which have a material adverse impact on the
environment and during the period covered by this report,
the Group has not incurred any fines or penalties or been
investigated for any breach of environmental regulations.
Research and development
The Group continues to review and develop its
qualifications and products and considers this vital to
the Group’s success in the future. Research and
development expenditure of £352,000 (2005:£101,000)
was written off to the income statement during the
year.
Payment of Creditors
It is the Group’s policy that payments to suppliers are
made in accordance with the terms and conditions
agreed between the Group and its suppliers, provided
that all trading terms and conditions have been
complied with.The number of days trade creditors for
the Group was 26 at 30 September 2006 (2005: 18).
Dividends
The Directors recommend the payment of a dividend
for the year ended 30 September 2006 of 0.2p per
share (2005: nil).
Employees
It is the policy of the Group to support the employment
of disabled persons where possible, both in recruitment
and by retention of employees who become disabled
whilst in the employment of the Group, as well as
generally through training and career development.
Employees are encouraged to discuss with management
any matters about which they are concerned. In addition,
the Board takes account of employees’ interests when
making decisions and the employees are informed of the
Group’s performance on a regular basis.
Suggestions from employees aimed at improving the
Group’s performance are welcomed. 16
Directors’ Report
Directors
The Directors serving during the year were as follows:
R Price* 
B A Clark*
W N Dore**
N T Gossage 
Sir Bryan Nicholson*
N M Snook
B N Harris* (resigned 26 January 2006)
* Independent non-executive Directors
** Non-executive Director
Those Directors serving at the end of the year had
interests in the share capital of the Company at 
30 September 2006 as follows:
Ordinary shares
30 Sept 30 Sept
2006 2005
Number Number
B A Clark 752,222 502,222
W N Dore 10,000,000 10,000,000
N T Gossage 40,000 40,000
Sir Bryan Nicholson 515,000 515,000
R Price 500,000 500,000
N M Snook 1,041,500 41,500
The shareholdings are all beneficial and have not
changed between 30 September 2006 and 
20 November 2006. Directors’ share options are 
shown in note 24 to the financial statements.
The Directors have no interest in the shares of any
other Group company.
Substantial Share Interests
The Company has been notified of the following
shareholdings in more than 3% of the issued share
capital of the Company at 23 October 2006:
Mr W N Dore 19.0%
Mr D G Newman 11.4%
GAM UK Equity Hedge Fund 10.3%
Landfinance 8.4%
Marlborough UK Micro Cap Growth Fund 4.3%
Real Time Consultancy 3.8%
Education Development International plc
Employee Benefit Trust 3.6%
AGM resolutions
The resolutions to be proposed at the Annual General
Meeting to be held on 18 December 2006, together
with explanatory notes, are listed in the Notice of
Annual General Meeting on page 61.
Disclosure of information to auditors
At the date of making this report each of the
Company’s Directors, as set out on page 16, confirms
the following:
l so far as each Director is aware, there is no relevant
information needed by the Company’s auditors in
connection with preparing their report of which the
Company’s auditors are unaware; and
l each Director has taken all the steps that he ought
to have taken as a Director in order to make
himself aware of any relevant information needed by
the Company’s auditors in connection with
preparing their report and to establish that the
Company’s auditors are aware of that information.
Auditors
A resolution to reappoint RSM Robson Rhodes LLP will
be proposed at the forthcoming Annual General Meeting.
By order of the Board
N T Gossage
Secretary
20 November 2006 Education Development International plc
Annual Report and Accounts
17
Statement of Directors’ Responsibilities
Company law in the United Kingdom requires the
Directors to prepare financial statements for each
financial year which give a true and fair view of the
state of affairs of the Company and the Group and of
the profit or loss of the Group for that period.
The Directors have chosen to prepare the Group
financial statements in accordance with IFRS as adopted
by the EU and have also elected to prepare the Parent
Company financial statements in accordance with 
UK IFRS.
In preparing each of the Group and Parent Company
financial statements, the Directors are required to:
l select suitable accounting policies and then apply
them consistently;
l make judgements and estimates that are reasonable
and prudent;
l for the Group and Parent Company financial
statements, state whether they have been prepared
in accordance with IFRS as adopted by the EU;
l prepare the financial statements on the going
concern basis unless it is inappropriate to assume
that the Group and the Parent Company will
continue in business.
The Directors are responsible for ensuring that the
company and the Group maintain proper accounting
records which disclose with reasonable accuracy at any
time the financial position of the Company and the
Group and enable them to ensure that the financial
statements comply with the Companies Act 1985.They
are also responsible for safeguarding the assets of the
Company and the Group and hence for taking
reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information on
the Group’s website. Legislation in the United Kingdom
governing the preparation and dissemination of the
financial statements and other information included in
annual reports may differ from legislation in other
jurisdictions. 18
Independent Auditors’ Report to the Shareholders
of Education Development International plc
We have audited the Group and Parent Company
financial statements on pages 19 to 59.These financial
statements have been prepared under the accounting
policies set out therein.
This report is made solely to the Company’s shareholders,
as a body, in accordance with Section 235 of the
Companies Act 1985. Our audit work has been
undertaken so that we might state to the Company’s
shareholders those matters we are required to state to
them in an auditors’ report and for no other purpose.T o
the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company
and the Company’s shareholders, as a body, for our audit
work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors
and auditors
The Directors’ responsibilities for preparing the Annual
Report and the financial statements in accordance with
applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union
are set out in the Statement of Directors’
Responsibilities.
Our responsibility is to audit the financial statements in
accordance with relevant legal and regulatory
requirements and International Standards on Auditing
(UK and Ireland).
We report to you our opinion as to whether the
financial statements give a true and fair view and
whether the financial statements have been properly
prepared in accordance with the Companies Act 1985.
We also report to you whether in our opinion the
information given in the Directors’ Report is consistent
with the financial statements.
In addition, we report to you if, in our opinion, the
Company has not kept proper accounting records, if we
have not received all the information and explanations
we require for our audit, or if information specified by
law regarding directors’ remuneration and other
transactions is not disclosed.
We read other information contained in the Annual
Report, and consider whether it is consistent with the
audited financial statements.The other information
comprises only the Highlights, the Chairman’s
Statement, the Chief Executive’s Report, the Corporate
Governance Statement, the Remuneration Report, the
Directors’ Report and the Five Year Financial Review.
We consider the implications for our report if we
become aware of any apparent misstatements or
material inconsistencies with the financial statements.
Our responsibilities do not extend to any other
information.
Basis of audit opinion
We conducted our audit in accordance with
International Standards on Auditing (UK and Ireland)
issued by the Auditing Practices Board.An audit includes
examination, on a test basis, of evidence relevant to the
amounts and disclosures in the financial statements. It
also includes an assessment of the significant estimates
and judgements made by the Directors in the
preparation of the financial statements, and of whether
the accounting policies are appropriate to the Group’s
and Company’s circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all
the information and explanations which we considered
necessary in order to provide us with sufficient
evidence to give reasonable assurance that the financial
statements are free from material misstatement,
whether caused by fraud or other irregularity or error.
In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the
financial statements.
Opinion
In our opinion:
l the Group financial statements give a true and fair
view, in accordance with IFRSs as adopted by the
European Union, of the state of affairs of the Group
as at 30 September 2006 and of its profit for the
year then ended;
l the Parent Company financial statements give a true
and fair view, in accordance with IFRSs as adopted
by the European Union as applied in accordance
with the provisions of the Companies Act 1985, of
the state of affairs of the Parent Company as at 30
September 2006;
l the financial statements have been properly
prepared in accordance with the Companies 
Act 1985;
l the information given in the Directors’ Report is
consistent with the financial statements.
As explained in Note 32 to the Group financial
statements, the Group in addition to complying with its
legal obligation to comply with IFRSs as adopted by the
European Union, has also complied with the IFRSs as
issued by the International Accounting Standards Board.
In our opinion the Group financial statements give a
true and fair view, in accordance with IFRSs, of the state
of the Group’s affairs as at 30 September 2006 and of
its profit for the year then ended.
RSM Robson Rhodes LLP
Chartered Accountants and Registered Auditors
Birmingham, England
20 November 2006 Education Development International plc
Annual Report and Accounts
19
Consolidated Income Statement
For the year ended 30 September 2006
Years ended
30 Sept 30 Sept
Continuing 2006 2005
Operations Acquisitions T otal T otal
Note £’000 £’000 £’000 £’000
Revenue 2 14,053 122 14,175 13,185
Cost of sales (4,234) (18) (4,252) (3,773)
Gross profit 9,819 104 9,923 9,412
Administrative expenses (8,732) (27) (8,759) (8,669)
Operating profit before onerous lease provisions 1,087 77 1,164 743
Onerous lease provisions 3 198 – 198 (796)
Operating profit/(loss) 2 1,285 77 1,362 (53)
Finance income 4 31 45
Finance costs 5 (63) (53)
Net finance costs (32) (8)
Profit/(loss) on ordinary activities
before taxation 6 1,330 (61)
Tax on profit/(loss) on ordinary activities 10 (57) (20)
Profit/(loss) for the period 1,273 (81)
Attributable to:
— Equity holders of the parent 25 1,225 (112)
— Minority interest 26 48 31
1,273 (81)
Earnings/(loss) per share 12
Basic 2.3p (0.2)p
Diluted 2.3p (0.2)p 20
Consolidated and Parent Company Statement of
Recognised Income and Expense For the year ended 30 September 2006
Group Company
Years ended Years ended
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Net foreign exchange adjustments offset in reserves – (4) – –
Actuarial gains/(losses) on defined benefit scheme 341 (86) 341 (86)
Deferred tax attributable to the actuarial gains/(losses) (102) 25 (102) 25
Net income/(expense) recognised directly in equity 239 (65) 239 (61)
Profit/(loss) for the period 1,273 (81) 1,140 (279)
T otal recognised income and expense for the period 1,512 (146) 1,379 (340)
Attributable to:
— Equity holders of the parent 1,464 (177) 1,379 (340)
— Minority interest 48 31 – –
1,512 (146) 1,379 (340) Education Development International plc
Annual Report and Accounts
21
Consolidated and Parent Company 
Balance Sheets At 30 September 2006
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
Note £’000 £’000 £’000 £’000
Non-current assets
Goodwill 13 4,390 4,009 3,317 3,317
Other intangible assets 14 616 496 616 496
Property, plant and equipment 15 305 185 279 175
Investments 16 – – 1,425 942
Deferred tax assets 17 615 745 615 745
5,926 5,435 6,252 5,675
Current assets
Inventories 18 64 74 46 43
Trade and other receivables 19 2,387 2,287 2,336 2,086
Current tax assets 3 – – –
Cash and cash equivalents 2,320 1,806 1,660 1,220
4,774 4,167 4,042 3,349
T otal assets 10,700 9,602 10,294 9,024
Current liabilities
Trade and other payables 20 (3,632) (2,967) (3,464) (2,426)
Current tax liabilities – (13) – –
Provisions for liabilities and charges 21 (308) (327) (308) (327)
(3,940) (3,307) (3,772) (2,753)
Non-current liabilities
Provisions for liabilities and charges 21 (663) (1,116) (663) (1,116)
Retirement benefit obligations 29 (1,381) (1,814) (1,381) (1,814)
Other non-current liabilities 22 (4) (10) (245) (332)
(2,048) (2,940) (2,289) (3,262)
T otal liabilities (5,988) (6,247) (6,061) (6,015)
Net assets 4,712 3,355 4,233 3,009
Equity 
Share capital 24 526 524 526 524
Share premium account 25 2,815 2,799 2,815 2,799
Own shares held 25 (213) (13) (213) (13)
Other reserves 25 212 212 212 212
Retained earnings 25 1,103 (388) 893 (513)
T otal shareholders’ equity 25 4,443 3,134 4,233 3,009
Minority interest in equity 26 269 221 – –
T otal equity 4,712 3,355 4,233 3,009
Nigel Snook Neal Gossage
Chief Executive Finance Director
20 November 2006 22
Consolidated and Parent Company Cash Flow Statements
For the year ended 30 September 2006
Group Company
Years ended Years ended
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
Notes £’000 £’000 £’000 £’000
Cash flows from operating activities
Net cash generated from operations 31 1,481 264 1,522 269
Interest received 31 45 31 45
Tax paid — net (45) (18) – –
Net cash generated from operating activities 1,467 291 1,553 314
Cash flows from investing activities
Acquisitions of businesses:
— Consideration 13, 16 (436) (190) (448) (190)
— Cash acquired 13 178 – – –
Payment of deferred consideration 13 (55) – (55) –
Purchase of property, plant and equipment (242) (168) (211) (156)
Proceeds from sale of property, plant and equipment 3 2 2 2
Purchase of intangible assets (219) (517) (219) (517)
Net cash used in investing activities (771) (873) (931) (861)
Cash flows from financing activities
Proceeds from issuing ordinary share capital 18 56 18 56
Repurchase of own shares (200) (13) (200) (13)
Net cash (used)/generated from financing activities (182) 43 (182) 43
Net increase/(decrease) in cash & cash equivalents 514 (539) 440 (504)
Cash & cash equivalents at beginning of period 1,806 2,349 1,220 1,724
Exchange losses on cash & cash equivalents – (4) – –
Cash & cash equivalents at end of period 2,320 1,806 1,660 1,220 Education Development International plc
Annual Report and Accounts
23
Notes to the Financial Statements
30 September 2006
1. ACCOUNTING POLICIES
Adoption of IFRS
AIM Rules require that the annual consolidated financial
statements of Education Development International plc for
the year ended 30 September 2008, be prepared in
accordance with International Financial Reporting Standards
(IFRSs) adopted for use in the EU, i.e.“adopted IFRSs”.As a
result, the Directors have decided on the early adoption of
IFRSs with effect from the year ended 
30 September 2006.
Basis of preparation
The accounting policies applied in the preparation of this
consolidated financial information are set out below.These
policies have been applied consistently to all the periods
presented, unless stated otherwise.
For the first time financial statements have been prepared in
accordance with International Financial Reporting Standards
(IFRSs) adopted for use in the European Union.The Group
has applied all accounting standards and interpretations by
International Accounting Standards Board and International
Accounting Standards Interpretation Committee effective at
time of preparing the financial statements.As a result, the
comparative amounts included in these financial statements
have been restated under IFRS from the UK Financial
Reporting Standard (“UK GAAP”) values originally published
by the Group.The disclosures required by IFRS 1 concerning
the transition from UK GAAP to IFRSs are given in note 32.
The consolidated financial information has been prepared
under the historical cost convention with the exception of
forward exchange contracts, which are measured at fair
value.
Basis of consolidation
The consolidated financial information comprises a
consolidation of the accounts of the Company and its
subsidiary undertakings at the balance sheet date using the
purchase accounting method.The results of subsidiary
undertakings acquired during the financial year are included
from the date of acquisition. Control is achieved where the
Company has the power to govern the financial and
operating policies of an investee entity so as to obtain
benefits from its activities.
On acquisition, the assets and liabilities and contingent
liabilities of a subsidiary undertaking are measured at their
fair values at the date of acquisition.Any excess of the cost of
acquisition over the fair values of the identifiable net assets
acquired is recognised as goodwill.Any deficiency of the cost
of acquisition below the fair values of the identifiable net
assets acquired (i.e. discount on acquisition) is credited to
the income statement in the period of acquisition.The
interest of minority shareholders is stated at the minority’s
proportion of the fair values of the assets and liabilities
recognised. Subsequently, any losses applicable to the
minority interest in excess of the minority interest are
allocated against the interests of the parent.
Intangible assets
a) Goodwill
Goodwill is the excess of the cost of an acquired entity over
the aggregate of the fair values of that entity’s identifiable
assets and liabilities. Positive goodwill is shown in the balance
sheet as an intangible asset.
On disposal of a subsidiary the attributable amount of
goodwill is included in the determination of profit and loss
on disposal.
Education Development International plc has elected not to
apply IFRS 3 ‘Business Combinations’ retrospectively.
Goodwill prior to 30 September 2004 was amortised in line
with UK GAAP . Goodwill from 1 October 2004 is subject to
annual impairment testing.Any impairment is recognised
immediately in the income statement and not subsequently
reversed.
b) Computer software
Purchased computer software is amortised over its
expected useful economic life on a straight-line basis.The
amortisation charge is included in administrative expenses in
the income statement.
Estimated useful life
Computer software 5 years
Property, plant and equipment and depreciation
Property, plant and equipment is stated at historic cost less
accumulated depreciation. Depreciation is calculated on a
straight-line basis to write property, plant and equipment
down to their estimated residual values over their expected
useful lives.Where there is evidence of impairment, property,
plant and equipment are written down to their recoverable
amount.Any such write-down would be charged to the
operating result.
Estimated useful life
Motor vehicles 3 years
Computer equipment 1–3 years
Fixtures, fittings and equipment 3–5 years
Leasehold improvements 3 years
Investments
Investments in subsidiary undertakings are recognised at
cost, being the fair value of the consideration given and
including acquisition charges associated with the investment.
Inventories
Inventories are valued at the lower of cost and estimated net
realisable value. Cost is determined on a first in, first out basis.
Net realisable value is based on the estimated sales price after
allowing for all further costs of completion and disposal.
Trade receivables
Trade receivables do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise
cash at bank and in hand and short-term deposits with an
original maturity of three months or less.
Trade payables
Trade payables are not interest bearing and are stated at
their nominal value. 24
Notes to the Financial Statements
30 September 2006
Financial instruments
The Group uses derivative financial instruments to reduce
exposure to foreign currency exchange risk.All derivatives
are initially recognised at fair value, and are subsequently re-
measured to fair value at the balance sheet date.
Derivatives designated as hedging instruments are accounted
for in line with the nature of the hedging arrangement.
Derivatives are intended to be highly effective in mitigating
foreign currency exchange risk, and hedge accounting is
adopted where the relevant test criteria are met. Changes in
the fair value of any derivative instrument that do not qualify
for hedge accounting are recognised immediately in the
income statement.
Foreign currencies
Transactions in foreign currencies are translated at the
exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign
currency are translated at the rates of exchange ruling at
the balance sheet date. Exchange differences are taken to
the income statement.
In the consolidated accounts, the assets and liabilities of
foreign subsidiaries are translated into Sterling at the rates
of exchange ruling at the balance sheet date.The trading
results of foreign subsidiaries are translated into Sterling
using an average exchange rate for the period of
consolidation. Exchange differences arising, if any, are
classified as equity and transferred to the Group’s
translation reserve. Such translation differences are
recognised as income or as expense in the period in which
the operation is disposed of.
The Group has elected to treat goodwill and fair value
adjustments arising on acquisition before the date of transition
to IFRS as sterling denominated assets and liabilities.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable
for goods and services provided in the normal course of
business, net of discounts, value added tax and after
eliminating sales within the Group. Revenue is recognised as
follows:
Rendering of services
Sales of services are recognised in the accounting period in
which the services are rendered, by reference to completion
of the specific transaction assessed on the basis of the actual
service provided as a proportion of the total services to be
provided. Deferred revenue represents amounts invoiced for
which the service will be provided in future periods.
Sale of goods
Sales of goods are recognised when the Group has delivered
products to the customer, the customer has accepted the
products and collectability of the related receivables is
reasonably assured.
Services provided under licence agreements 
Services provided under annual licence agreements are credited
to deferred income and released to the income statement on a
straight-line basis over the duration of the agreements.
Impairment of assets
The carrying amount of the Group’s assets is reviewed at
each balance sheet date to determine whether there is an
indication of impairment. If such an indication exists, the
asset is written down to its estimated recoverable amount.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash
flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit) is
reduced to its recoverable amount.An impairment loss is
recognised as an expense immediately, unless the relevant
asset is carried at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the
carrying amount of the asset (or cash-generating unit) is
increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had
no impairment loss been recognised for the asset (or cash-
generating unit) in prior years.A reversal of an impairment
loss is recognised as income immediately, unless the relevant
asset is carried at a revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation
increase.
Employee benefits
Retirement benefit obligations 
The Group operates a defined benefit pension scheme.The
cost of providing benefits is determined using the Projected
Unit Credit Method, with actuarial valuations being carried
out at each balance sheet date.Actuarial gains and losses are
recognised in full in the period in which they occur.They are
recognised outside the income statement and presented in
the statement of recognised income and expense.The
service cost of the pension provision relating to the period,
together with the cost of any benefits relating to past
service, is charged to the income statement.A charge equal
to the increase in the present value of the scheme liabilities
(because the benefits are closer to settlement) and a credit
equivalent to the Group’s long-term expected return on
assets (based on market value of the scheme assets at the
start of the period) are included in the income statement
under “finance costs”.
The difference between the market value of the assets of
the scheme and the present value of the accrued pension
liabilities is shown as an asset or liability on the balance
sheet. Deferred tax is recognised on retirement benefit
obligations and disclosed under non-current assets.Any
difference between the expected return on assets and,
which is actually achieved, is recognised in the statement of
recognised income and expense along with differences
arising from experience or assumption changes. Education Development International plc
Annual Report and Accounts
25
During the year the Group also operated defined
contribution pension schemes for some staff members.The
assets of the plans are held separately from those of the
Group in independently managed funds.The amount charged
during the year represents the contributions payable to the
schemes in respect of the accounting year.
Share-based payments 
The fair value of shares/options granted are recognised as an
employee expense, with a corresponding increase in equity
reserves.The fair value of the shares/options is determined at
the date of grant, taking into account any market based vesting
conditions attached to the award, and spread over the period
the employees become unconditionally entitled to the
shares/options. Non-market vesting conditions are taken into
account in estimating the number of awards likely to vest.The
estimate of the number of awards likely to vest is reviewed
regularly and the expense charged adjusted accordingly.The
fair value of the shares/options is calculated using the Black
Scholes model.
T axation
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability
method.
Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill
or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction
that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and
associates, and interests in joint ventures, except where the
Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference
will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at
each balance sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected
to apply in the period when the liability is settled or the
asset is realised. Deferred tax is charged or credited in the
income statement, except when it relates to items charged
or credited directly to equity, in which case the deferred tax
is also dealt with in equity.
Research and development
Expenditure incurred in market research and product
development and testing is charged to the income statement
in the period in which it is incurred, unless the development
expenditure meets the criteria for capitalisation.
Where the expenditure meets the criteria for capitalisation,
development costs are capitalised and amortised over their
useful economic lives.
Leased assets
Where the Group acts as a lessee in an operating lease
arrangement, the costs of operating leases are charged to
the Income Statement as incurred. Lease incentives received
are recognised over the lease term on a straight-line basis.
Where the Group acts as a lessor in an operating lease
arrangement, rental income from operating leases is
accounted for on a straight-line basis over the period of the
lease. Lease incentives provided are recognised over the
lease term on a straight-line basis.
Provisions
A provision is recognised in the balance sheet when the
Group has a present legal or constructive obligation as a
result of a past event and it is probable that an outflow of
economic benefits will be required to settle the obligation. If
the effect is material, provisions are determined by
discounting the expected future cash flows at a pre-tax rate
that reflects the current market assessments of the time
value of money and, when appropriate, the risks specific to
the liability.
An onerous lease provision is recognised by the Group
where a leased property is vacant or sub-leased to a third
party at below market rent, to the extent that rental
payments are not recoverable from sub-leasing the property.
The provision is discounted and based on the best estimate
of the expenditure required to settle the rental obligation at
the balance sheet date and is based upon market conditions
at that date.
Treasury Shares
Shares repurchased are valued as cost deducted from equity.
No gain or loss is recognised on the purchase, sale, issue or
cancellation of the entity’s equity instruments. 26
2. SEGMENT AL ANAL YSIS
Analysis of revenue and operating profit by business segment
Years ended
30 Sept 2006 30 Sept 2005
Profit/ Profit/
Revenue (loss) Revenue (loss)
£’000 £’000 £’000 £’000
UK qualifications and assessment services 6,731 822 5,903 412
International qualifications 5,280 326 5,112 259
Service contracts 2,112 216 1,998 208
Unallocated 52 (200) 172 (136)
14,175 1,164 13,185 743
Onerous lease provisions 198 (796)
Operating profit/(loss) 1,362 (53)
Finance income 31 45
Finance costs (63) (53)
Profit/(loss) on ordinary activities before taxation 1,330 (61)
Tax on profit/(loss) on ordinary activities (57) (20)
Profit/(loss) for the period 1,273 (81)
Analysis of segment assets and liabilities by business segment
Segment assets Segment liabilities
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
UK qualifications and assessment services 4,653 4,539 (3,245) (3,245)
International qualifications 3,053 2,698 (2,298) (2,652)
Service contracts 657 532 (416) (297)
Operational assets 8,363 7,769 (5,959) (6,194)
Unallocated assets/(liabilities) 2,337 1,833 (29) (53)
T otal assets/(liabilities) 10,700 9,602 (5,988) (6,247)
Unallocated assets/(liabilities) consists primarily of cash and cash equivalents and current tax assets/(liabilities) that cannot be
readily allocated to segments.
Other segmental information
Capital additions Depreciation and
amortisation
Years ended Years ended
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
UK qualifications and assessment services 86 177 41 41
International qualifications 293 420 136 106
Service contracts 76 68 37 17
455 665 214 164
Unallocated 6 20 4 3
461 685 218 167
Notes to the Financial Statements
30 September 2006 Education Development International plc
Annual Report and Accounts
27
2. SEGMENT AL ANAL YSIS (continued)
Analysis of revenue by geographical market (by destination):
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
United Kingdom 9,304 8,658
Rest of Europe 1,682 1,609
Far East & Asia 2,595 2,348
Rest of World 594 570
14,175 13,185
Analysis of segment assets and capital additions be geographical location (by origin)
Segment assets Capital additions
Years ended Years ended
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
United Kingdom 9,135 8,310 442 680
Rest of Europe 39 – 13 –
Far East & Asia 1,526 1,292 6 5
10,700 9,602 461 685
3. ONEROUS LEASE PROVISIONS
The onerous lease provision movement during the year ended 30 September 2006 arises as a result of the assignment of the
Leamington Spa office lease and the sub-lease of further vacant space in the Sidcup office.These offices were permanently
vacated during the year ended 30 September 2005 and provision was made to cover future obligations under the lease
contracts.At 30 September 2006, £901,000 remains provided in respect of other onerous leases.
4. FINANCE INCOME
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Bank interest receivable 31 45 28
Notes to the Financial Statements
30 September 2006
5. FINANCE COSTS
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Net finance charge on pension schemes (see note 29) 14 47
Unwinding of discount on onerous lease provision (see note 21) 49 6
63 53
6. PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION
The profit/(loss) on ordinary activities before taxation is arrived at after charging/(crediting):
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Amortisation of other intangible assets 99 21
Depreciation of property, plant and equipment 119 146
Research and development costs 352 101
Loss on disposal of property, plant and equipment – 6
Rental receivable under subleases (51) (97)
Rentals under operating leases
— land and buildings 325 466
— other 2 2
Foreign exchange losses 53 185
Share-based payments 27 99
Provision for impairment of receivables 95 122
Auditors’ remuneration:
Services to the Company and its subsidiaries
Fees payable to the Company’s auditor for the audit of the annual financial statements 23 21
Fees payable to the Company’s auditor for other services:
— Audit of financial statement of the Company’s subsidiaries pursuant to legislation 3 3
— Other services supplied pursuant to legislation 10 7
— Other services relating to taxation 7 6
— Services relating to corporate finance transactions 16 –
Services to the Company’s associated pension scheme
Audit of the financial statements pursuant to legislation 3 3 Education Development International plc
Annual Report and Accounts
29
7. EMPLOYEES
Average weekly number of employees, including Executive Directors:
Years ended
30 Sept 30 Sept
2006 2005
Number Number
Operations 51 47
Education Development 20 18
Business Development 40 37
Finance and Administration 25 24
136 126
Years ended
30 Sept 30 Sept
2006 2005
£000 £000
Wages and salaries 3,612 3,580
Social security costs 375 374
Other pension costs
Defined benefit scheme (see note 29) – –
Defined contribution schemes  (see note 29) 173 187
173 187
4,160 4,141
8. DIRECTORS
Emoluments of the Company’s Directors:
Salary and Benefits Pensions T otal T otal
fees in kind 2006 2006 2005
£’000 £’000 £’000 £’000 £’000
Non-executives
R Price 30 – – 30 27
B A Clark 20 – – 20 20
W N Dore 10 – – 10 10
B N Harris‡ – – – – –
Sir Bryan Nicholson 20 – – 20 23    
Executives
N M Snook 207 10 12 229 220 
N T Gossage 135 1 18 154 47 
K Padmanathan* – – – – 170
W J Swords† – – – – 95
Aggregate emoluments 422 11 30 463 612
‡ Resigned from the Board on 26 January 2006.
* Resigned from the Board on 11 February 2005. Remuneration up until that date is shown above.
† Resigned from the Board on 31 March 2005. Remuneration up until that date is shown above.
Salary and fees for Mr K Padmanathan includes compensation for loss of office of £120,000, which was paid during the year 
30 September 2005.
Pension costs represent Group contributions to the personal pension plans of the Directors.
Directors’ share options
Details of the share options currently held by the Directors are shown in note 24. 30
Notes to the Financial Statements
30 September 2006
9. RELATED PARTY TRANSACTIONS
a) T rading transactions
Group and Company
Provision of Purchase of
goods services
2006 2005 2006 2005
£’000 £’000 £’000 £’000
HL Investments Limited – – 66 82
HL Investments Limited is a related party of the Group because it is a company controlled by W N Dore, a Director of the
Company. HL Investments Limited provided leasehold premises during the year.
There are no amounts owed by or owed to related parties at 30 September 2006 (2005: £Nil).
Provision of goods to and the purchase of services from related parties were made at arm’s length prices.The amounts
outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been
made for doubtful debts in respect of the amounts owed by related parties.
b) Company transactions with subsidiaries
Company
Provision of Purchase of
goods services
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Sales to subsidiaries 1,136 954 – –
Purchases from subsidiaries – – – –
Company
Amounts owed by Amounts owed by
subsidiaries subsidiaries
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Receivables from subsidiaries 19 – – –
Payables to subsidiaries – – (361) (155)
Provision of goods to and the purchase of services from subsidiaries were made at arm’s length prices.The amounts
outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been
made for doubtful debts in respect of the amounts owed by subsidiaries.
c) Key management compensation
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for
each of the categories specified in IAS 24 ‘Related Party Disclosures’.
2006 2005
£’000 £’000
Short-term employee benefits 483 490
Post-employment benefits 30 44
Other long-term employee benefit – –
Termination benefits – 120
Share-based payment 768
520 722 Education Development International plc
Annual Report and Accounts
31
10. TAXATION
The taxation charge for the year is analysed below:
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Current tax 29 5
Deferred taxation 28 15
Tax on profit/(loss) on ordinary activities 57 20
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Current tax reconciliation
Profit/(loss) on ordinary activities before taxation 1,330 (61)
Theoretical tax charge/(credit) at UK corporation tax rate of 30% (2005: 30%) 399 (18)
Effects of:
Expenses not deductible for tax purposes 21 –
Deductible temporary differences 2 (21)
Utilisation of previously unrecognised tax losses (345) –
Repayment of research and development tax credit – (30)
Tax losses arising where no deferred tax asset has been recognised 989
Different tax rates for overseas subsidiaries (9) –
Other (20) –
Actual tax on profit/(loss) on ordinary activities 57 20
11. DIVIDENDS
The Directors propose a dividend of 0.2 pence (totalling £105,000) for the year ended 30 September 2006.The dividend will
be submitted for formal approval at the Annual General Meeting to be held on 18 December 2006.These financial statements
do not reflect this dividend payable, which will be accounted for in shareholders’ equity on an appropriation of retained
earnings in the year ending 30 September 2007. 32
Notes to the Financial Statements
30 September 2006
12. EARNINGS/(LOSS) PER SHARE
Years ended
30 Sept 30 Sept
2006 2005
Number of shares (million)
Weighted average number of shares used in basic EPS 52.5 51.8
Effect of dilutive securities:
— Share options 0.7 –
Weighted average number of shares used in diluted EPS 53.2 51.8
Earnings (£’000)
Profit/(loss) for the year attributable to ordinary shareholders 1,225 (112)
Onerous lease provision (credit)/charge (198) 796
Tax on profit/(loss) on ordinary activities 57 20
Minority interest 48 31
Adjusted earnings 1,132 735
Earnings per share (pence)
Basic 2.3 (0.2)
Diluted 2.3 (0.2)
Adjusted EPS 2.2 1.4
Adjusted EPS — Diluted 2.1 1.4
13. GOODWILL
UK qualifi-
cations &
International assessment Service
qualifications services contracts T otal
Group £’000 £’000 £’000 £’000
Cost
At 1 October 2004 2,427 1,327 – 3,754
Additions – 32 223 255
At 1 October 2005 2,427 1,359 223 4,009
Additions – 346 35 381
At 30 September 2006 2,427 1,705 258 4,390
Provision for impairment in value
At 1 October 2004, 1 October 2005 and 30 September 2006 – – – –
Net book value
At 30 September 2006 2,427 1,705 258 4,390
At 30 September 2005 2,427 1,359 223 4,009 Education Development International plc
Annual Report and Accounts
33
13. GOODWILL (continued)
UK qualifi-
cations &
International assessment Service
qualifications services contracts T otal
Company £’000 £’000 £’000 £’000
Cost
At 1 October 2004, 1 October 2005 and 30 September 2006 1,990 1,327 – 3,317
Provision for impairment in value
At 1 October 2004, 1 October 2005 and 30 September 2006 – – – –
Net book value
At 30 September 2006 1,990 1,327 – 3,317
At 30 September 2005 1,990 1,327 – 3,317
Company
Goodwill in the Company arose as a result of the purchase of the trade and assets of London Chamber of Commerce and
Industry Examinations Board on 20 December 2002.
Group
Goodwill is tested for impairment at least annually in accordance with IAS 36 ‘Impairment of assets’.The recoverable amount
of goodwill has been on value in use as represented by the net present value of future cash flows. Cash flows are projected
forward for five years based on three year approved budgets and plans.The budgets have been based on past experience from
which the plans have been extrapolated assuming 3% inflationary growth only.They are then discounted using a discount rate
based on the Group’s pre-tax nominal weighted average cost of capital of 11%, which has been adjusted for the specific risks
associated with the asset’s estimated cash flows.
Following the impairment test during the year, no charge has been recognised in the income statement in respect of goodwill
impairment.
Goodwill arose in the year on an amendment to deferred consideration and an acquisition by the Group. On 1 October 2004
the Group acquired the entire share capital of EQL Assessment Limited, for an initial consideration of £153,000 and deferred
consideration of £65,000, based on the Directors’ best estimate of revenue forecast at 30 September 2005.At 30 September
2006, the Directors have reviewed the latest revenue forecasts for this business and revised deferred consideration upwards by
£35,000. Deferred consideration of £55,000 was paid in January 2006.
On 26 May 2006 the Group acquired the entire share capital of Joint Examining Board Limited, a specialist provider of
vocational training and ICT teaching qualifications for professional staff.The consideration for this acquisition (before costs)
was £425,000 which was paid from existing cash resources. 34
Notes to the Financial Statements
30 September 2006
13. GOODWILL (continued)
Fair values
The book and provisional fair values of the assets and liabilities acquired were as follows:
£’000
Property, plant and equipment 1
Trade receivables 30
Other current assets 3
Cash and cash equivalents 178
Trade and other payables (122)
Net assets acquired 90
Goodwill 346
436
Satisfied by
Cash consideration 425
Costs of acquisition 11
436
Goodwill recognised above includes items that cannot be individually separated and reliably measured due to their nature.
These include the expertise of staff and synergy benefits.
Joint Examining Board Limited’s profit after tax for the period from 26 May 2006 to 30 September 2006 was £77,000. If the
acquisition had been made at the beginning of the year then the Group’s results would have been revenue of £14,272,000, profit
before tax £1,247,000 and profit after tax of £1,218,000.
On 2 October 2006 the Group acquired the business and goodwill of Jetset, a business providing Junior English Test and Senior
English Test qualifications.The consideration for this acquisition (before costs) was £50,000 which was paid from existing cash
resources.
Fair values
The book and provisional fair values of the assets and liabilities acquired were as follows:
£’000
Book and fair value of assets acquired –
Goodwill 50
50
Satisfied by
Cash consideration 50 Education Development International plc
Annual Report and Accounts
35
14. OTHER INTANGIBLE ASSETS
Computer
software
£’000
The Group and Company
Cost
At 1 October 2004 –
Additions 517
At 1 October 2005 517
Additions 219
At 30 September 2006 736
Amortisation 
At 1 October 2004 –
Amortisation charge 21
At 1 October 2005 21
Amortisation charge 99
At 30 September 2006 120
Net book value
At 30 September 2006 616
At 30 September 2005 496
The remaining amortisation period for computer software is 4
1/
2 years. 36
Notes to the Financial Statements
30 September 2006
15. PROPERTY , PLANT AND EQUIPMENT
Fixtures, Leasehold
Motor Computer fittings and improve-
vehicles equipment equipment ments T otal
Group £’000 £’000 £’000 £’000 £’000
Cost
At 1 October 2004 14 415 245 96 770
Additions 11 96 20 41 168
Disposals – (133) (211) (86) (430)
Current translation adjustment – 1 1 (3) (1)
At 1 October 2005 25 379 55 48 507
Additions 48 94 49 51 242
Disposals – (11) (1) – (12)
Current translation adjustment – (1) (1) – (2)
At 30 September 2006 73 461 102 99 735
Depreciation
At 1 October 2004 12 270 222 95 599
Charge for year 3 121 18 4 146
Disposals – (125) (211) (86) (422)
Currency translation adjustment – 1 1 (3) (1)
At 1 October 2005 15 267 30 10 322
Charge for year 5 70 21 23 119
Disposals – (8) (1) – (9)
Currency translation adjustment – (1) (1) – (2)
At 30 September 2006 20 328 49 33 430
Net book value
At 30 September 2006 53 133 53 66 305
At 30 September 2005 10 112 25 38 185 Education Development International plc
Annual Report and Accounts
37
15. PROPERTY, PLANT AND EQUIPMENT (continued)
Fixtures, Leasehold
Motor Computer fittings and improve-
vehicles equipment equipment ments T otal
Company £’000 £’000 £’000 £’000 £’000
Cost
At 1 October 2004 14 360 215 87 676
Additions 11 85 19 41 156
Disposals – (117) (210) (86) (413)
At 1 October 2005 25 328 24 42 419
Additions 48 83 39 41 211
Disposals – (5) – – (5)
Inter-company transfer – 7 – – 7
At 30 September 2006 73 413 63 83 632
Depreciation
At 1 October 2004 12 230 195 87 524
Charge for year 3 111 16 3 133
Disposals – (117) (210) (86) (413)
At 1 October 2005 15 224 1 4 244
Charge for year 5 66 18 21 110
Disposals – (3) – – (3)
Inter-company transfer – 2 – – 2
At 30 September 2006 20 289 19 25 353
Net book value
At 30 September 2006 53 124 44 58 279
At 30 September 2005 10 104 23 38 175
16. INVESTMENTS
Investments
in subsidiary
undertakings
Company £’000
Cost 
At 1 October 2004 687
Additions 255
At 1 October 2005 942
Additions 483
At 30 September 2006 1,425
Provisions and amounts written off
At 1 October 2004, 1 October 2005 and at 30 September 2006 –
Net book value
At 30 September 2006 1,425
At 30 September 2005 942 38
Notes to the Financial Statements
30 September 2006
16. INVESTMENTS (continued)
During the year, a new wholly owned subsidiary was set up in Cyprus to act as sales representative and administrator for
Cyprus and the Middle East region.The cost of investment of £12,000 represents the entire share capital of the subsidiary.
The Company’s investments at 30 September 2006 are:
Country of incorporation
Company name Interest in ordinary shares and registration Principal activity
Subsidiary undertakings
Educational Resources Pte Limited 50.4% Singapore Examination services
Educational Development Pte Limited 100%* Singapore Dormant
LCCIEB Training Consultancy Co. 100%* People’s Republic of China Consultancy in education
and related services
Kris Marketing Sdn Bhd 100%* Malaysia Consultancy in education
and related services
Educational Resources (HK) Limited 100%* Hong Kong Consultancy in education
and related services
EQL Assessment Limited 100% England & Wales Dormant
Education Resources (Cyprus) Limited 100% Cyprus Examination services
Joint Examining Board Limited 100% England & Wales Vocational training services
GOAL Limited 100% England & Wales Dormant
* Indirect holding through Educational Resources Pte Limited.
17. DEFERRED T AX ASSETS
The deferred tax asset, together with amounts unprovided, comprises the following:
Provided Unprovided
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Accelerated tax depreciation – – (25) (26)
Temporary differences – – 10 13
Tax losses 200 200 2,355 2,756
Retirement benefit obligations 415 545 – –
615 745 2,340 2,743
The movement in the year:
30 Sept 30 Sept
2006 2005
£’000 £’000
Opening deferred tax asset 745 735
Deferred tax charged to income statement (28) (15)
Deferred tax (charged)/credited to equity (102) 25
Closing deferred tax asset 615 745
There is no liability to UK corporation tax at 30 September 2006 owing to trading losses brought forward from previous
accounting periods.
The Group has UK trading losses available to carry forward without expiry against future trading profits of approximately
£8.5m at 30 September 2006 (2005: £9.9m). Education Development International plc
Annual Report and Accounts
39
18. INVENTORIES
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Goods for resale 64 74 46 43
The replacement cost of the above inventory would not be significantly different from the values stated.
19. TRADE AND OTHER RECEIVABLES
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Current assets
Trade receivables 2,167 2,066 2,124 1,954
Less: Provision for impairment of receivables (317) (222) (317) (222)
Trade receivables — net 1,850 1,844 1,807 1,732
Amounts due from subsidiary undertakings – – 19 –
Other receivables 319 123 295 102
Prepayments and accrued income 218 320 215 252
2,387 2,287 2,336 2,086
20. TRADE AND OTHER PAYABLES
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Current liabilities
Trade payables 701 535 698 535
Amounts due to subsidiary undertakings – – 361 155
Other taxation and social security 266 207 264 178
Other creditors 94 177 92 79
Accruals and deferred income 2,571 2,048 2,049 1,479
3,632 2,967 3,464 2,426 40
Notes to the Financial Statements
30 September 2006
21. PROVISIONS FOR LIABILITIES AND CHARGES
Group and Company
Restructuring Onerous
provision leases Dilapidations T otal
£’000 £’000 £’000 £’000
At 1 October 2005 20 1,383 40 1,443
Amount charged to income statement 30 (198) – (168)
Utilised in the year (20) (333) – (353)
Unwinding of discount on onerous lease provision – 49 – 49
At 30 September 2006 30 901 40 971
Current liabilities 30 278 – 308
Non-current liabilities – 623 40 663
At 30 September 2006 30 901 40 971
Current liabilities 20 307 – 327
Non-current liabilities – 1,076 40 1,116
At 30 September 2005 20 1,383 40 1,443
On the acquisition of LCCIEB the Group assumed obligations under various leases for office space with short-term sub-
leases. Provision has been made for the Directors’ estimate of the potential shortfall in rental income compared to lease costs
up to the termination of the Group’s commitment in respect of the leases.The terms of the leases have expiry dates between
December 2007 and March 2011.
Additionally, as a result of the decision to restructure its UK operation in 2005, the Group permanently vacated its Sidcup and
Leamington Spa offices with a view to subletting them. During the year, the Leamington Spa office lease was fully assigned and
further vacant space was sublet in the Sidcup office.The provision has been adjusted to reflect the expected lease costs of the
remaining vacant area.
The onerous leases provision has been discounted and is stated at net present value. Discounting has no material effect on
the other provisions.
22. OTHER NON-CURRENT LIABILITIES
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Other creditors 4 10 4 10 
Deferred income – – 241 322 
4 10 245 332  Education Development International plc
Annual Report and Accounts
41
23. DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS
IAS 32 ‘Financial Instruments: Presentation and Disclosure’ and IAS 39 ‘Financial Instruments: Recognition and Measurement’
were adopted by the Group with effect from 1 October 2004.
Management of financial risk
The Group’s activities expose it to a variety of financial risks: currency risk, credit risk, liquidity risk and cash flow interest 
rate risk.
The main risks managed by the Group, under policies approved by the Board, are foreign currency risk, interest rate risk,
liquidity risk and credit risk.The Board periodically reviews treasury activities, policies and procedures.All treasury activity takes
place within a formal control framework.
Currency risk
Foreign currency risk arises from cash flows relating to commercial transactions, recognised assets and liabilities and net
investment in foreign operations.
Transaction exposure occurs when, as a result of trading activities, an entity receives or pays cash in a currency different from
its functional currency.A substantial portion of the Group’s revenue is receivable in foreign currencies.Approximately 30% of
the Group’s sales are to customers in continental Europe and the Far East.The Group enters into forward currency contracts
to reduce the effect of foreign exchange rate fluctuations where sales are invoiced in the currencies of the customers involved.
These forward exchange contracts are timed to mature at various dates in the financial year to coincide with the major foreign
currency receipts based on the annual income cycle.
The Group has certain investments in foreign operations, whose net assets and related goodwill are exposed to foreign
currency translation risk.The Sterling Group balance sheet can be affected by movements in the exchange rates between
Sterling and the Singapore Dollar, Hong Kong Dollar and Malaysian Ringgit because of the investments in the net assets of the
Educational Resources Group based in South East Asia.The Group does not hedge this balance sheet exposure; however, this
policy will be subject to regular review. Gains and losses arising on the net investment overseas are recognised in the statement
of total recognised income and expense.
Credit risk
The Group’s credit risk is primarily attributable to its trade debtors. Credit risk is managed by monitoring the aggregate
amount and duration of exposure to any one customer depending upon their credit rating.The amounts presented in the
balance sheet are net of allowances for doubtful debts, estimated by the Group’s management based on prior experience and
their assessment of the current economic environment.
The credit risk on liquid funds is limited because counter-parties are banks with high credit ratings assigned by international
credit rating agencies.
Liquidity risk
The Group has no net debt at 30 September 2006; however, short-term bank facilities exist should short-term flexibility be
required.
Interest rate risk
The Group’s interest rate risk arises from interest-bearing assets.The Group has no specific requirements on the exact
proportion of interest that should be fixed or floating.The position is reviewed periodically. 42
Notes to the Financial Statements
30 September 2006
23. DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS (continued)
Derivative instruments
Forward exchange contracts
The Group has entered into forward exchange contracts during the year to hedge exposure to movements in foreign currency
rates on forecast sales.The outstanding forward exchange contracts at 30 September 2006 were as follows.There were no
forward exchange contracts outstanding at 30 September 2005.
Notional contract
amount
£’000 US$’000
Sales:
US Dollar 321 –
Hong Kong Dollar – 225
Singapore Dollar –63
321 288
Foreign exchange forward contracts are due to mature on 30 November 2006.
The fair value of forward foreign exchange contracts at 30 September 2006 was £2,000 asset (2005: £Nil).These amounts are
based on the market value of equivalent instruments at the balance sheet date.
Fair value of non-derivative financial instruments
The carrying amounts of the Group’s non-derivative financial instruments approximate to book value. Fair values of financial
assets and liabilities have been calculated by discounting expected future cash flows at prevailing interest rates and applying year
end exchange rates.
Undrawn committed borrowing facilities
At 30 September 2006 the Group had available £100,000 (2005: £100,000) of undrawn committed borrowing facilities.
Cash and cash equivalents
The effective interest rates for cash and cash equivalents is 1.5% (2005: 2.2%). Education Development International plc
Annual Report and Accounts
43
24. SHARE CAPITAL
30 Sept 30 Sept
2006 2005
£’000 £’000
Authorised
70,000,000 ordinary shares of 1p each 700 700
Allotted and fully paid
52,597,181 (52,355,616) ordinary shares of 1p each 526 524
During the year the Company issued 241,565 ordinary shares when options under the Company’s share ownership scheme
were exercised by employees made redundant during this year or the prior year.All of these options were exercised at 7.2p.
Options over ordinary shares have been granted under the Company’s share ownership scheme for the staff. Options over
4,952,365 shares, exercisable at varying dates between October 2006 and November 2015, were outstanding at 
30 September 2006.The options are exercisable at prices ranging from 7.2p to 14.25p.
The movements in options over ordinary shares during the year are summarised below.
Number
At 1 October 2005 5,422,711
Options granted 100,000
Options exercised (241,565)
Options lapsed (328,781)
At 30 September 2006 4,952,365 44
Notes to the Financial Statements
30 September 2006
24. SHARE CAPITAL (continued)
At 30 September 2006 the following share options had been granted to Directors over the Company’s shares, no Director
share options have been exercised or lapsed during the year.
Number of
options at Date from
30 September Exercise which Expiry Share price or EPS
2006 price (p) exercisable date performance criteria
N M Snook
2000 Unapproved Share Option Scheme
150,000 9.25 12/1/08 11/1/14 13
1
/2p + RPI + 6% per annum
or adjusted EPS + 20% per annum
100,000 9.25 12/1/08 11/1/14 13
1
/2p + RPI + 20% per annum
or adjusted EPS + 20% per annum
100,000 9.25 12/1/08 11/1/14 13
1
/2p + RPI + 20% per annum
or adjusted EPS + 20% per annum
150,000 9.25 12/1/09 11/1/14 13
1
/2p + RPI + 6% per annum
or adjusted EPS + 20% per annum
100,000 12.50 30/9/08 29/9/15 12
1
/2p + RPI + 6% per annum
or adjusted EPS + 20% per annum
50,000 12.50 30/9/08 29/9/15 12
1
/2p + RPI + 20% per annum
or adjusted EPS + 20% per annum
250,000 12.50 30/9/09 29/9/15 12
1
/2p + RPI + 6% per annum
or adjusted EPS + 20% per annum
100,000 12.50 30/9/09 29/9/15 12
1
/2p + RPI + 20% per annum
or adjusted EPS + 20% per annum
250,000 12.50 30/9/10 29/9/15 12
1
/2p + RPI + 6% per annum
or adjusted EPS + 20% per annum
100,000 12.50 30/9/10 29/9/15 12
1
/2p + RPI + 20% per annum
or adjusted EPS + 20% per annum
100,000 12.50 30/9/11 29/9/15 12
1
/2p + RPI + 6% per annum
or adjusted EPS + 20% per annum
50,000 12.50 30/9/11 29/9/15 12
1
/2p + RPI + 20% per annum
or adjusted EPS + 20% per annum
350,000 12.50 30/9/12 29/9/15 12
1
/2p + RPI + 6% per annum
or adjusted EPS + 20% per annum
150,000 12.50 30/9/12 29/9/15 12
1
/2p + RPI + 20% per annum
or adjusted EPS + 20% per annum
The GOAL 2000 Sharesave Scheme
64,404 7.20 1/4/07 30/09/07
N T Gossage
2000 Unapproved Share Option Scheme
75,000 14.25 21/11/08 21/4/15 14
1
/4p + RPI + 6% per annum
or adjusted EPS + 20% per annum
75,000 14.25 21/11/08 21/4/15 14
1
/4p + RPI + 20% per annum
or adjusted EPS + 20% per annum
75,000 14.25 21/11/09 21/4/15 14
1
/4p + RPI + 6% per annum
or adjusted EPS + 20% per annum
75,000 14.25 21/11/09 21/4/15 14
1
/4p + RPI + 20% per annum
or adjusted EPS + 20% per annum Education Development International plc
Annual Report and Accounts
45
24. SHARE CAPITAL (continued)
During the year the Remuneration Committee reviewed and amended the share option performance criteria, adding an
earnings per share performance criteria. For these purposes, adjusted earnings per share is based on operating profit before
the movement in the onerous lease provision adjusted for net finance costs for the year ended 30 September 2005.Adjusted
earnings per share for the year ended 30 September 2005 is 1.4p.
In addition to the above options over the Company’s shares,W N Dore and D G Newman have granted options over a
number of their ordinary shares in the Company to N M Snook.The options have an exercise price of 9.25p and expire on 
18 December 2012.They are exercisable as follows:
Number of options Earliest exercise date Share price performance criteria
250,000 20 December 2005 13
1
/2p + RPI + 6% per annum
1
100,000 20 December 2005 13
1
/2p + RPI + 20% per annum
1
400,000 20 December 2006 13
1
/2p + RPI + 6% per annum
2
150,000 20 December 2006 13
1
/2p + RPI + 20% per annum
2
433,333 20 December 2007 13
1
/2p + RPI + 6% per annum
3
200,000 20 December 2007 13
1
/2p + RPI + 15% per annum
3
200,000 20 December 2010 40p + RPI + 20% per annum
4
350,000 20 December 2011 50p + RPI + 20% per annum
5
1
during the period 20 December 2002 to 19 December 2006
2
during the period 20 December 2002 to 19 December 2007
3
during the period 20 December 2002 to 19 December 2008
4
during the period 20 December 2002 to 19 December 2010
5
during the period 20 December 2002 to 19 December 2011
RPI is the Retail Price Index.
25. STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
T otal
share-
Share Share Own shares Other Retained holders’
capital premium held reserves earnings equity
£’000 £’000 £’000 £’000 £’000 £’000
Group
At 1 October 2004 517 12,591 – – (9,920) 3,188
Loss for the year – – – – (112) (112)
Actuarial loss (net of deferred tax) – – – – (61) (61)
Share based payments – – – – 80 80
Purchase of own shares – – (13) – – (13)
Transfer on capital restructure – (9,841) – 212 9,629 –
Net differences on exchange – – – – (4) (4)
New shares issued 7 49 – – – 56
At 30 September 2005 524 2,799 (13) 212 (388) 3,134
Profit for the year – – – – 1,225 1,225
Actuarial gain (net of deferred tax) – – – – 239 239
Share based payments – – – – 27 27
Purchase of own shares – – (200) – – (200)
Net differences on exchange – – – – – –
New shares issued 2 16 – – – 18
At 30 September 2006 526 2,815 (213) 212 1,103 4,443 46
Notes to the Financial Statements
30 September 2006
25. STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (continued)
T otal
share-
Share Share Own shares Other Retained holders’
capital premium held reserves earnings equity
£’000 £’000 £’000 £’000 £’000 £’000
Company
At 1 October 2004 517 12,591 –– (9,882) 3,226
Loss for the year – – – – (279) (279)
Actuarial loss (net of deferred tax) – – – – (61) (61)
Share based payments – – – – 80 80
Purchase of own shares – – (13) – – (13)
Transfer on capital restructure – (9,841) – 212 9,629 –
New shares issued 7 49 – – – 56
At 30 September 2005 524 2,799 (13) 212 (513) 3,009
Profit for the year – – – – 1,140 1,140
Actuarial gain (net of deferred tax) – – – – 239 239
Share based payments – – – – 27 27
Purchase of own shares – – (200) – – (200)
New shares issued 2 16 – – – 18
At 30 September 2006 526 2,815 (213) 212 893 4,233
The profit attributable to the Company for the year was £1,140,000 after taxation (2005: loss of £279,000).
In accordance with the exemption allowed by s230 of the Companies Act 1985, the Company has not presented its own
income statement.
Own shares held
The own shares held represents the cost of funding the purchase by the Trustees of the Company’s own shares in respect of
the Employee Benefit Trust. During the year 1,775,000 ordinary shares (2005: 100,000 ordinary shares) with a nominal value of
1p each have been purchased in total on the open market at a cost of £199,625 (2005: £13,500).
Other reserves
On 11 March 2005 the Company received court approval to reduce its share premium account by £9,840,842.The court also
required the Company to create a non-distributable special reserve equal to the amount of profit made by the Company
during the period from 1 October 2004 to the date the court order became effective.
26. MINORITY INTEREST IN EQUITY
30 Sept 30 Sept
2006 2005
£’000 £’000
Opening minority interests 221 190
Profit on ordinary activities after taxation 48 31
Closing minority interests 269 221 Education Development International plc
Annual Report and Accounts
47
27. OPERATING LEASE ARRANGEMENTS
The Group and the Company as lessee
The payments which the Group and Company is committed to make for future minimum payments under non-cancellable
operating leases fall due as follows:
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Land and buildings
Leases which expire 
within one year 5 9 – –
in two to five years 194 426 120 374
beyond five years 1,904 2,330 1,904 2,330
2,103 2,765 2,024 2,704
Other leases — which expire 
within one year – – – –
in two to five years 2 – – –
2,105 2,765 2,024 2,704
The Group and the Company as lessor
At the year end, the Group and the Company had total future sublease payments receivable, relating to the above operating
lease, amounting to £130,000 (2005: £49,000).
28. CAPITAL COMMITMENTS
The Company and Group had no capital commitments at 30 September 2006 (2005: £nil). 48
Notes to the Financial Statements
30 September 2006
29. RETIREMENT BENEFIT OBLIGATIONS
Background
In previous accounting periods the Group has operated a Group defined contribution personal pension plan and “the EDI plc
Pension Scheme” which comprises a defined benefit section and a defined contribution section.The defined benefit section of
this scheme is solely for the benefit of those employees of LCCIEB who had been members of the defined benefit section of
the London Chamber of Commerce and Industry scheme (in which LCCIEB participated) prior to acquisition in 2003.
In November 2003 the above schemes were closed and the Group introduced a new defined contribution scheme for all UK
employees.
The defined benefit section of the EDI plc Pension Scheme is funded through a legally separate trustee administered fund.
Although the scheme has closed to future accrual, the Group has an obligation to fund the ongoing scheme deficit.
Pension valuation
The most recent actuarial valuation of the Group’s defined benefit scheme was carried out at 30 September 2003.An updated
valuation was performed by independent actuaries as at 30 September 2006.The scheme assets are stated at their market
value at 30 September 2006.
Assumptions
The major assumptions used by the actuary in assessing scheme liabilities on an IAS 19 basis are set out below.
30 Sept 30 Sept
2006 2005
Rate of increase in salaries 0.00% 3.25%
Rate of increase in pensions payment
Pre-1 March 2001 service 5.00% 5.00%
Post-1 March 2001 service 2.75% 2.75%
Discount rate 5.00% 5.00%
Inflation assumption 2.75% 2.75%
Member age 65 (current life expectancy)
Male 19 years 19 years
Female 22 years 22 years
Member age 48 (life expectancy on reaching 65)
Male 20 years 20 years
Female 23 years 23 years Education Development International plc
Annual Report and Accounts
49
29. RETIREMENT BENEFIT OBLIGATIONS (continued)
The amounts recognised in the income statement are as follows:
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Administrative expenses
Current service cost ––
Finance income/(expense)
Interest cost 468 451
Expected return on assets (454) (404)
14 47
Total charge to income statement for defined benefit scheme 14 47
Charge for defined contribution scheme 173 187
Total charge to income statement 187 234
Statement of recognised income and expense
Gain on pension scheme assets 411 797
Changes in assumptions (70) (883)
341 (86)
Deferred tax (charged)/credited to equity (102) 25
Actuarial gain/(loss) net of deferred tax 239 (61)
The amount included in the balance sheet arising from the Group and Company’s obligations in respect of its defined
retirement benefit scheme is as follows:
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Present value of defined benefit obligations (9,728) (9,420)
Fair value of scheme assets 8,347 7,606
(1,381) (1,814)
Movements in the present value of the defined benefit obligations are as follows:
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Defined benefit obligations at start of year 9,420 8,324
Interest cost 468 451
Changes in assumptions 70 883
Benefit payments (230) (238)
Defined benefit obligations at end of year 9,728 9,420 50
Notes to the Financial Statements
30 September 2006
29. RETIREMENT BENEFIT OBLIGATIONS (continued)
Movements in the fair value of plan assets are as follows:
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Fair value of plan assets at start of year 7,606 6,543
Expected return on assets 454 404
Company contributions 106 100
Benefits paid (230) (238)
Actuarial gain 411 797
Fair value of plan assets at end of year 8,347 7,606
Movements in the retirement benefit liabilities are as follows:
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Retirement benefit liabilities at the start of year (1,814) (1,781)
Net finance cost (14) (47)
Company contributions 106 100
Actuarial gain 341 (86)
Retirement benefit liabilities at the end of year (1,381) (1,814)
Cumulative net actuarial gains recognised in equity are as follows:
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
At start of year 728 814
Net actuarial gain/(losses) recognised in the year 341 (86)
At end of year 1,069 728
The major categories of plan assets as a percentage of total plan assets are as follows:
Years ended
30 Sept 2006 30 Sept 2005
% £’000 % £’000
Equities 52.7 4,402 52.3 3,975
Bonds 41.9 3,497 47.3 3,599
Cash 5.4 448 0.4 32
100.0 8,347 100.0 7,606
Actual returns on scheme assets 11.4 865 18.4 1,201
The plan assets do not include any of the Group’s own financial instruments or property occupied by the Group. Education Development International plc
Annual Report and Accounts
51
29. RETIREMENT BENEFIT OBLIGATIONS (continued)
The expected rates of return by major category of plan assets are as follows:
Years ended
30 Sept 30 Sept
2006 2005
%%
Equities 7.0 7.0
Bonds 5.0 5.0
Cash 4.0 4.0
The expected return on plan assets is based on market expectations at the beginning of the period for returns over the life of
the benefits obligation.
In 2004, the Board negotiated with the Trustees of the scheme for the Group to pay contributions of £100,000 per annum
(increasing annually by 6.5%) for 10 years.Additionally, the Group paid the scheme running expenses of £37,000 during the year.
History of experience gains and losses are as follows:
Years ended
30 Sept 30 Sept
2006 2005
£’000 £’000
Present value of defined benefit obligations (9,728) (9,420)
Fair value of scheme assets 8,347 7,606
(1,381) (1,814)
Experience adjustments on scheme liabilities
Amount (£’000) 341 (86)
Percentage of scheme liabilities 3.5% (0.9)%
Experience adjustments on scheme assets
Amount (£’000) 411 797
Percentage of scheme assets 4.9% 10.5%
30. SHARE-BASED PAYMENTS
During the year ended 30 September 2006, the Group had two share-based payment arrangements, which are described
below:
a) Unapproved Executive Share Option Plan (‘ESOP’)
The ESOP provides for a grant price equal to the closing quoted market price of the Company’s shares on the day before the
date of the grant.The vesting period is a minimum of three years and is dependent upon the real growth in the Company’s
share price or growth in the base EPS over the vesting period. If the options remain unexercised after a period of 10 years
from the date of grant, the options expire.
b) 2000 Save As You Earn Scheme (‘SAYE’)
The 2000 SAYE Scheme was open to all UK employees at the date the scheme was set up.The scheme provides for an
exercise price equal to the closing quoted market price on the day before the date of the grant, less a discount.The options
can be exercised during a six month period following the completion of a three year savings period. 52
Notes to the Financial Statements
30 September 2006
30. SHARE-BASED PAYMENTS (continued)
ESOP SAYE
Weighted Weighted
average average
exercise exercise
Number price Number price
2005
Outstanding at 1 October 2004 3,075,000 9.25p 1,161,358 7.20p
Granted 2,300,000 12.24p – –
Exercised (500,000) 9.25p (121,969) 7.20p
Lapsed (200,000) 10.25p (291,678) 7.20p
Outstanding at 30 September 2005 4,675,000 10.68p 747,711 7.20p
Exercisable at 30 September 2005 – –
The weighted average share price at the date of exercise during the year ended 30 September 2006 was 12.00p.
Range of exercise prices for options outstanding 
at 30 September 2005 9.25–14.25p 7.20p
Weighted average remaining contractual life (years) 6 2
Weighted average fair value of options awarded in 2005 2.04p –
2006
Outstanding at 1 October 2005 4,675,000 10.68p 747,711 7.20p
Granted 100,000 12.50p – –
Exercised – – (241,565) 7.20p
Lapsed (100,000) 10.25p (228,781) 7.20p
Outstanding at 30 September 2006 4,675,000 10.73p 277,365 7.20p
Exercisable at 30 September 2006 1,862,000 –
The weighted average share price at the date of exercise during the year ended 30 September 2006 was 11.56p.
Range of exercise prices for options outstanding 
at 30 September 2006 9.25–14.25p 7.20p
Weighted average remaining contractual life (years) 5 1
Weighted average fair value of options awarded in 2006 7.51p –
On 30 November 2005 the Group issued 100,000 share options to employees under the Unapproved Executive Share Option
Plan. For the purposes of arriving at the fair value of the awards a Black Scholes option pricing model has been used.The
assumptions used in the model are as follows:
Risk-free interest rate 4.62%
Expected dividends 0.0%
Expected volatility 35.2%
Share price at date of grant 12.50p
Option life 3 to 10 years
Expected exercise behaviour
— Awards 75%
Volatility was based on the share price history.The fair value of share plans involving performance criteria takes into account
market information. Education Development International plc
Annual Report and Accounts
53
31. RECONCILIATION OF PROFIT BEFORE TAX TO
NET CASH GENERATED FROM OPERATIONS
Group Company
Years ended Years ended
30 Sept 30 Sept 30 Sept 30 Sept
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Profit/(loss) on ordinary activities before taxation 1,330 (61) 1,168 (293)
Adjustments for:
Depreciation of property, plant and equipment 119 146 110 133
Amortisation of intangible assets 99 21 99 21
Loss/(profit) on the sale of property, plant and equipment – 6 – (2)
Shared-based payments 27 99 27 99
1,575 211 1,404 (42)
Decrease/(increase) in inventories 10 (27) (3) (18)
Increase in trade and other receivables (100) (790) (250) (427)
(Decrease)/increase in trade and other payables (4) 870 371 756
Net cash generated from operations 1,481 264 1,522 269
32. TRANSITION TO IFRS
This is the first year that the Company has presented its financial statements under IFRS.AIM Rules require Education
Development International plc to report its consolidated figures under IFRSs (as adopted by the EU) from 1 October 2007.
However, the Directors have decided on early transition to IFRS with effect from 1 October 2005.The following disclosures are
required in the year of transition.The last financial statements were under UK GAAP were for the year ended 30 September
2005 and the date of transition to IFRSs was therefore 1 October 2004.
There are a number of presentational changes which have no effect on the profit or the net assets, as well as no cash impact.
The impact of IAS 7 ‘Cashflow Statements’ merely has a presentational effect on the statement of cash flows, and there have
been no material presentational adjustments to the cash flow statement.
IFRS 1 ‘First-time Adoption of International Financial Reporting Statements’
On transition to IFRS, an entity is generally required to apply IFRS retrospectively, except where an exemption is available under
IFRS 1.The following is a summary of the key elections from IFRS 1 that were made by the Group:
l The Group has elected not to restate business combinations made prior to 1 October 2004 to comply with IFRS 3
‘Business Combinations’.As a result, the balance of goodwill under UK GAAP at 30 September 2004 will be deemed the
cost of goodwill at 1 October 2004.
l The Group has elected to apply IFRS 2 ‘Share-based Payments’ only to awards granted after 7 November 2002 and not
vested at 1 January 2005.
l The Group has elected not to adopt the IFRS 1 option to reset foreign currency cumulative translation reserves to zero
on transition to IFRS. 54
Notes to the Financial Statements
30 September 2006
32. TRANSITION TO IFRS (continued)
Impact of transition
The main impacts of IFRS on the Group’s reported results are shown below:
IFRS 2 Share-based payments 
IFRS 2 ‘Share-based payments’ requires the Group to charge its income statement with the fair value of equity settled share-
based payments.The effect of this charge has a corresponding increase in equity reserves. In accordance with the transitional
arrangements, IFRS 2 has been applied to all grants of equity instruments made after 7 November 2002 that were unvested at 
1 January 2005. Profit before tax for the year ended 30 September 2005 is reduced by £73,000, which is net of the write-back of
the previous charge for the year ended 30 September 2005 of £26,000 made under UITF 17 on a UK GAAP basis.
IFRS 3 Business combinations
IFRS 3 does not permit the annual amortisation of goodwill, but does require an annual impairment review of carrying values.
Impairment reviews have been conducted on the carrying value of goodwill arising on business combinations at the transition
date and 30 September 2005 with no impairments identified. Goodwill amortisation charged in the income statement for the
year ended 30 September 2005 of £216,000 is reversed under IFRS.
IAS 19 Employee benefits
As a result of adopting FRS 17 Retirement Benefits for the year ended 30 September 2004, the impact of IAS 19 is minimal.The
only change is a Balance Sheet classification for the deferred tax, which under FRS 17 was netted against the pension liability, but
under IAS 12 ‘Income Taxes’, has been transferred to deferred tax.At 30 September 2005, this resulted in the reclassification of
£545,000 from retirement benefit obligations to deferred tax.
IAS 38 Intangible assets
Computer software costs previously capitalised as tangible fixed assets have been reclassified as intangible assets.At 
30 September 2005, this resulted in the reclassification of £496,000 of software costs to intangible assets, being purchased
software development costs.
IAS 37 Provisions
IAS 37 requires the Group to discount provisions at a pre-tax rate that reflects the current market assessments of the time value
of money and, when appropriate, the risks specific to the liability.The effect has been to apply a risk-free rate to onerous lease
provisions from 1 October 2004. Profit before tax for the year ended 30 September 2005 is reduced by £62,000.
In addition, provisions for liabilities and charges have been reclassified as current liabilities and non-current liabilities.At 
30 September 2005, this resulted in the reclassification of £327,000 of non-current liabilities as current liabilities. Education Development International plc
Annual Report and Accounts
55
Consolidated Balance Sheet as at 1 October 2004
UK GAAP IFRS 2 IFRS 3 IAS 38 IAS 12 
in IFRS Share-based Business Intangible Income IAS 37 IFRS
format payments combinations assets T axes Provisions Restated
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Non-current assets
Goodwill 3,754 3,754
Other intangible assets – –
Property, plant and equipment 171 171
Deferred tax assets – 735 735
3,925 – – – 735 – 4,660
Current assets
Inventories 47 47
Trade and other receivables 1,697 (200) 1,497
Cash and cash equivalents 2,349 2,349
4,093 – – – (200) – 3,893
T otal assets 8,018 – – – 535 – 8,553
Current liabilities
Trade and other payables (2,342) 61 (2,281)
Current tax payable – –
Provisions for liabilities 
and charges – (498) (498)
(2,342) 61 – – – (498) (2,779)
Non-current liabilities
Provisions for liabilities
and charges (1,011) 396 (615)
Retirement benefit obligations (1,246) (535) (1,781)
Other non-current liabilities – –
(2,257) – – – (535) 396 (2,396)
T otal liabilities (4,599) 61 – – (535) (102) (5,175)
Net assets 3,419 61 – – – (102) 3,378
Equity 
Share capital 517 517
Share premium account 12,591 12,591
Own shares held – –
Other reserves – –
Retained earnings (9,879) 61 (102) (9,920)
Total shareholders’ equity 3,229 61 – – – (102) 3,188
Minority interest in equity 190 190
T otal equity 3,419 61 – – – (102) 3,378 56
Notes to the Financial Statements
30 September 2006
Consolidated Income Statement for the year ended 30 September 2005
UK GAAP IFRS 2 IFRS 3 IAS 38 IAS 12 
in IFRS Share-based Business Intangible Income IAS 37 IFRS
format payments combinations assets T axes Provisions Restated
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Revenue 13,185 13,185
Cost of sales (3,773) (3,773)
Gross profit 9,412 – – – – – 9,412
Administrative expenses (8,596) (73) (8,669)
Operating profit before
amortisation of goodwill and
onerous lease provisions 816 (73) – – – – 743
Amortisation of goodwill (216) – 216 – – – –
Onerous lease provisions (718) – – – – (78) (796)
Operating loss (118) (73) 216 – – (78) (53)
Finance income 45 45
Finance costs (69) 16 (53)
Net finance costs (24) – – – – 16 (8)
Loss on ordinary activities
before taxation (142) (73) 216 – – (62) (61)
Tax on loss on
ordinary activities (20) (20)
Loss for the period (162) (73) 216 – – (62) (81) Education Development International plc
Annual Report and Accounts
57
Consolidated Balance Sheet as at 30 September 2005
UK GAAP IFRS 2 IFRS 3 IAS 38 IAS 12 
in IFRS Share-based Business Intangible Income IAS 37 IFRS
format payments combinations assets T axes Provisions Restated
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Non-current assets
Goodwill 3,793 216 4,009
Other intangible assets – 496 496
Property, plant and equipment 681 (496) 185
Deferred tax assets – 745 745
4,474 – 216 – 745 – 5,435
Current assets
Inventories 74 74
Trade and other receivables 2,487 (200) 2,287
Cash and cash equivalents 1,806 1,806
4,367 – – – (200) – 4,167
T otal assets 8,841 – 216 – 545 – 9,602
Current liabilities
Trade and other payables (3,035) 68 – – – – (2,967)
Current tax payable (13) (13)
Provisions for liabilities
and charges – (327) (327)
(3,048) 68 – – – (327) (3,307)
Non-current liabilities
Provisions for liabilities 
and charges (1,278) 162 (1,116)
Retirement benefit obligations (1,269) (545) (1,814)
Other non-current liabilities (10) (10)
(2,557) – – – (545) 162 (2,940)
T otal liabilities (5,605) 68 – – (545) (165) (6,247)
Net asset 3,236 68 216 – – (165) 3,355
Equity 
Share capital 524 524
Share premium account 2,799 2,799
Own shares held (13) (13)
Other reserves 212 212
Retained earnings (507) 68 216 (165) (388)
Total shareholders’ equity 3,015 68 216 – – (165) 3,134
Minority interest in equity 221 221
T otal equity 3,236 68 216 – – (165) 3,355 58
Notes to the Financial Statements
30 September 2006
Parent Company Balance Sheet as at 1 October 2004
UK GAAP IFRS 2 IFRS 3 IAS 38 IAS 12 
in IFRS Share-based Business Intangible Income IAS 37 IFRS
format payments combinations assets T axes Provisions Restated
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Non-current assets
Goodwill 3,317 3,317
Other intangible assets – –
Property, plant and equipment 152 152
Investments 687 687
Deferred tax assets – 735 735
4,156 – – – 735 – 4,891
Current assets
Inventories 25 25
Trade and other receivables 1,859 (200) 1,659
Cash and cash equivalents 1,724 1,724
3,608 – – – (200) – 3,408
T otal assets 7,764 – – – 535 – 8,299
Current liabilities
Trade and other payables (1,837) 61 (1,776)
Current tax payable – –
Provisions for liabilities
and charges – (498) (498)
(1,837) 61 – – – (498) (2,274)
Non-current liabilities
Provisions for liabilities 
and charges (1,011) 396 (615)
Retirement benefit obligations (1,246) (535) (1,781)
Other non-current liabilities (403) (403)
(2,660) – – – (535) 396 (2,799)
T otal liabilities (4,497) 61 – – (535) (102) (5,073)
Net assets 3,267 61 – – – (102) 3,226
Equity 
Share capital 517 517
Share premium account 12,591 12,591
Own shares held – –
Other reserves – –
Retained earnings (9,841) 61 (102) (9,882)
T otal shareholders’ equity 3,267 61 – – – (102) 3,226 Education Development International plc
Annual Report and Accounts
59
Parent Company Balance Sheet as at 30 September 2005
UK GAAP IFRS 2 IFRS 3 IAS 38 IAS 12 
in IFRS Share-based Business Intangible Income IAS 37 IFRS
format payments combinations assets T axes Provisions Restated
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Non-current assets
Goodwill 3,135 182 3,317
Other intangible assets – 496 496
Property, plant and equipment 671 (496) 175
Investments 942 942
Deferred tax assets – 745 745
4,748 – 182 – 745 – 5,675
Current assets
Inventories 43 43
Trade and other receivables 2,286 (200) 2,086
Cash and cash equivalents 1,220 1,220
3,549 – – – (200) – 3,349
T otal assets 8,297 – 182 – 545 – 9,024
Current liabilities
Trade and other payables (2,494) 68 (2,426)
Current tax payable – –
Provisions for liabilities
and charges – (327) (327)
(2,494) 68 – – – (327) (2,753)
Non-current liabilities
Provisions for liabilities 
and charges (1,278) 162 (1,116)
Retirement benefit obligations (1,269) (545) (1,814)
Other non-current liabilities (332) (332)
(2,879) – – – (545) 162 (3,262)
T otal liabilities (5,373) 68 – – (545) (165) (6,015)
Net assets 2,924 68 182 – – (165) 3,009
Equity 
Share capital 524 524
Share premium account 2,799 2,799
Own shares held (13) (13)
Other reserves 212 212
Retained earnings (598) 68 182 (165) (513)
T otal shareholders’ equity 2,924 68 182 – – (165) 3,009 60
Five Year Financial Review
Restated Restated
IFRS IFRS IFRS UK GAAP UK GAAP
2006 2005 2004 2003 2002
(12 months) (12 months) (12 months) (18 months) (12 months)
£’000 £’000 £’000 £’000 £’000
Revenue 14,175 13,185 10,962 8,573 589
Operating profit/(loss)
Before amortisation and impairment of goodwill,
onerous lease provisions and redundancy provisions 1,164 743 741 (1,424) (2,271)
Amortisation and impairment of goodwill – – (188) (2,759) –
Onerous lease provisions 198 (796) – (205) –
Redundancy provisions – – (430) (395) –
Operating profit/(loss) 1,362 (53) 123 (4,783) (2,271)
Profit/(loss) on ordinary activities after taxation 1,273 (81) 307 (4,473) (2,072)
Earnings/(loss) per share
Basic 2.3p (0.2)p 0.7p (12.1)p (8.5)p
Diluted 2.3p (0.2)p 0.7p (12.1)p (8.5)p
Goodwill and intangible assets 5,006 4,505 3,754 3,500 – 
Property, plant equipment and investments 305 185 171 255 194
Deferred tax assets 615 745 735 702 –
Net cash and cash equivalents 2,320 1,806 2,349 1,330 3,403
Inventories, receivables and payables (1,486) (946) (1,235) 38 (346)
Non-current liabilities excluding retirement benefit obligations (667) (1,126) (615) (1,295) – 
6,093 5,169 5,159 4,530 3,251
Retirement benefit obligations (1,381) (1,814) (1,781) (2,340) –
T otal net assets 4,712 3,355 3,378 2,190 3,251
Comparatives have been reformatted to present results in IFRS format. No adjustments have been made to reflect the differences
in accounting treatment under IFRS compared to UK GAAP.The adjustments required have been set out in Note 32. Education Development International plc
Annual Report and Accounts
61
Notice of Annual General Meeting
EXPLANATORY NOTES TO THE RESOLUTIONS TO
BE CONSIDERED AT THE ANNUAL GENERAL
MEETING
Notice is hereby given that the Annual General Meeting of the
Company will be held at International House, Siskin Parkway
East, Middlemarch Business Park, Coventry,West Midlands,
CV3 4PE on Monday 18 December 2006 at 10.00 a.m. for the
following purposes:
Ordinary Business
1. To receive the report of the Directors and the audited
accounts for the year ended 30 September 2006.
2. To declare a final dividend of 0.2p per share to be paid
on 5 January 2007 to those shareholders on the register
at the close of business on 1 December 2006.
3. To reappoint Wynford Dore as a Director of the
Company, who shall retire in accordance with the
Company’s articles of association.
4. T o reappoint Barrie Clark as a Director of the Company,
who shall retire in accordance with the Company’s
articles of association.
5. To reappoint RSM Robson Rhodes LLP as auditors and to
authorise the directors to determine their remuneration.
To consider and, if thought fit, pass the following resolution as
an ordinary resolution of the Company:
6. THAT, in substitution for any previous authority, the
Directors be hereby generally and unconditionally
authorised pursuant to section 80 of the Companies Act
1985 (the “Act”) to exercise all the powers of the
Company to allot relevant securities (within the meaning
of that section) up to an aggregate nominal amount of
£127,000 for a period expiring (unless previously
renewed, varied or revoked by the Company in general
meeting) 15 months after the date of the passing of this
resolution or at the conclusion of the next annual general
meeting of the Company, following the passing of this
resolution, whichever first occurs, but the Company may
before such expiry make an offer or agreement which
would or might require relevant securities to be allotted
after expiry of this authority and the Directors may allot
relevant securities in pursuance of that offer or
agreement notwithstanding that the authority conferred
by this resolution has expired.
Special Business
To consider and, if thought fit, pass Resolutions 7 and 8 as
special resolutions of the Company.
7. THAT, subject to the passing of Resolution 6 in the
notice of the annual general meeting, the Directors be
generally empowered pursuant to section 95 of the Act
to allot equity securities (within the meaning of section
94(2) of the Act) for cash pursuant to the authority
conferred by Resolution 6 as if section 89(1) of the Act
did not apply to the allotment and this power shall:
(a) expire 15 months after the date of the passing of this
resolution or at the conclusion of the next annual general
meeting of the Company following the passing of this
resolution, whichever first occurs, but the Company may
before such expiry make an offer or agreement which
would or might require equity securities to be allotted
after expiry of this authority and the Directors may allot
equity securities in pursuance of that offer or agreement
notwithstanding that the power conferred hereby has
expired; and
(b) be limited to:
(i) the allotment of equity securities where such
securities have been offered by way of a rights issue,
open offer or otherwise to holders of the ordinary
shares in the capital of the Company in proportion
(as nearly as may be) to their existing holdings of
ordinary shares but subject to the Directors having a
right to make such exclusions or other
arrangements in connection with the offering as they
deem necessary or expedient:
(1) to deal with equity securities representing
fractional entitlements; and
(2) to deal with legal and practical problems arising in
any overseas territory under the laws of any
territory or the requirements of a regulatory body
or stock exchange or any other matters; and
(ii) allotments of equity securities for cash otherwise
than pursuant to paragraph 7(b)(i) above up to an
aggregate nominal amount of £26,298.
8. THAT the Company be and is hereby generally and
unconditionally authorised to make market purchases
(within the meaning of Section 163(3) of the Companies
Act 1985) of ordinary shares of 1 pence each in the
capital of the Company (“ordinary shares”) provided that:
8.1 the maximum aggregate number of ordinary shares
hereby authorised to be purchased is 5,259,690 which
represents approximately 10 per cent of the current
issued share capital of the Company; 62
8.2 the minimum price which may be paid for an ordinary
share is one pence (exclusive of expenses); and
8.3 the maximum price which may be paid for an ordinary
share shall not be more than 5 per cent above the
average of the middle market quotations for a ordinary
share as derived from the London Stock Exchange Daily
Official List for each of the five dealing days immediately
preceding the date on which an ordinary share is
purchased, and this authority shall, unless it is (prior to its
expiry) duly revoked or is renewed, expire at the
conclusion of the next annual general meeting of the
Company or 15 months from the date of passing of this
resolution (whichever shall occur first), save that the
Company may make a contract to purchase ordinary
shares under this authority before such expiry which will
or may be executed wholly or partly after such expiry,
and may make a purchase of ordinary shares pursuant to
any such contract as if the authority hereby conferred
had not expired.
Notes
1. A member is entitled to attend and vote at the Meeting
is also entitled to appoint one or more proxies to attend
and, on a poll, vote instead of him.The proxy need not be
a member of the Company.
2. A form of proxy is enclosed with this notice.To be valid,
the form must be deposited at the offices of the
Company’s Registrars, Capita IRG Plc, Proxy Department,
PO Box 25, Beckenham, Kent, BR3 4BR not less than 48
hours before the time fixed for holding the meeting or
adjourned meeting. Completion of the form of proxy will
not preclude a member from attending and voting in
person.
3. Pursuant to Regulation 41 of the Uncertified Securities
Regulations 2001, the time by which a person must be
entered on the register of members in order to have the
right to attend and vote at the Annual General Meeting is
10.00 a.m. on 16 December 2006 (being not more than
48 hours prior to the time fixed for the Meeting).
Changes to entries on the register of members after that
time will be disregarded in determining the right of any
person to attend or vote at the Meeting.
4. The register of Directors’ interests kept by the Company
in accordance with section 325 of the Companies Act
1985 and copies of contracts of service of Directors with
the Company or any of its subsidiaries will be available
for inspection at the annual general meeting.
Dated 20 November 2006
By order of the Board
Neal Gossage
Secretary
Registered Office:
International House
Siskin Parkway East
Middlemarch Business Park
Coventry
CV3 4PE
Registered no: 3914767 Education Development International plc
Annual Report and Accounts
63
Form of Proxy for use by holders of ordinary shares at the
Annual General Meeting of the Company convened for 18 December 2006
 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholder Name
If there is a mistake in the details above, do not change what is
printed. Please contact Neal Gossage at the registered office.
Please read the notes below before filling in this form. Fill in
this form using black ink.
By filling in and returning this form, I/we appoint (see note 3 below)
 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Shareholder Account Number
Insert the proxy’s name in BLOCK CAPITALS or “Chairman” if you wish to
appoint the Chairman.
Do not insert your own name(s).
as my/our proxy to attend and vote on my/our behalf at the Annual
General Meeting (“AGM”) of the Company or any adjourned meeting.
The AGM will be held at International House, Siskin Parkway East,
Middlemarch Business Park, Coventry,West Midlands, CV3 4PE on 
18 December 2006 at 10.00 a.m.Your proxy will vote on your behalf
on the Ordinary Resolutions referred to in the Notice of Annual
General Meeting dated 20 November 2006 as indicated by you.
$ Form of Proxy
Notes on filling in your form of Proxy
1. As a shareholder of Education Development International plc, you have the right to go to, speak at and
vote at the Annual General Meeting. If you cannot or do not want to go to the meeting, but still want
to vote you can appoint someone to go to the meeting and vote instead of you.That person is known
as a “proxy”.Y ou can use this form to appoint the Chairman or someone else as your proxy.
2. Y our proxy does not have to be a shareholder of Education Development International plc. However,
if your proxy is not a shareholder, he or she is not entitled to speak at the meeting, unless the
Chairman allows them to speak.
3. If you want to appoint the Chairman as your proxy, insert “Chairman” in the space above. If you want
to nominate someone other than the Chairman as your proxy, give that person’s name in the space
above.Y our proxy must then go to the meeting to vote on your behalf. However, if you do this and
you, or your proxy, do not go to the meeting, your vote cannot be counted.
4. In the case of joint holders, the vote of the senior shareholder who tenders a vote, whether in person
or by proxy, will be accepted to the exclusion of the votes of the other joint holders. For this
purpose, seniority is determined by the order in which the names appear in the register of members
in respect of the joint holding.
5. If someone signs this form for you, when you or that person send the form to us, you or they must
enclose the authority under which the form is signed. If you are appointing the proxy for a company,
the form must show the company’s seal or be signed on its behalf by an officer, attorney or other
person authorised to sign for the company.Where an officer signs this form, the signatory should state
his or her office on the form.
6. For the proxy named in this form to act for you, your completed form must arrive at the Company’s
Registrars, Capita Registrars, Proxy Department, PO Box 25, Beckenham, Kent, BR3 4BR by 10.00 a.m.
on 16 December 2006 or at least 48 hours before any adjourned meeting.
Please do not enclose anything else with your form (except for the authority mentioned in note 5
above where appropriate).
If your form arrives late, it will not be valid and will not replace any earlier form of proxy we have
received.We cannot accept forms of proxy returned by fax.
7. Entitlement to attend and vote at the meeting or at any adjourned meeting and the number of votes
you can cast, will be determined by reference to the shareholder register at 10.00 a.m. on 
16 December 2006 or, if the meeting is adjourned, 10.00 a.m. on the day two days before the date
fixed for such adjourned meeting.
8. If you send a form of proxy, you can still go to the meeting and vote.
9. If we receive more than one form of proxy from the same shareholder, we will accept the 
last one.
10. If you make any alterations on this form, you must put your initials next to them.
Please indicate your vote by marking the appropriate box in black ink like this: x For Against
1 To receive the report of the Directors and the audited accounts for the year ended 30 September 2006.
2 To declare a dividend of 0.2 pence per share to be paid on 5 January 2007 to those shareholders on the
register at the close of business on 1 December 2006.
3 To reappoint Wynford Dore as a Director of the Company who shall retire in accordance with the Company’s
articles of association.
4 To reappoint Barry Clark as a Director of the Company who shall retire in accordance with the Company’s
articles of association.
5 T o reappoint RSM Robson Rhodes LLP as auditors and to authorise the Directors to determine their remuneration.
6 To authorise the Directors pursuant to section 80 of the Companies Act 1985 (the “Act”) to exercise all the
powers of the Company to allot relevant securities (within the meaning of that section) up to an aggregate
nominal amount of £127,000 for a period expiring (unless previously renewed, varied or revoked by the
Company in general meeting) 15 months after the date of the passing of this resolution.
7 THAT, subject to the passing of Resolution 6 in the notice of the annual general meeting, the Directors be generally
empowered pursuant to section 95 of the Act to allot equity securities (within the meaning of section 94(2) of the
Act) for cash pursuant to the authority conferred by Resolution 6 as if section 89(1) of the Act did not apply to the
allotment and this power shall:
(a) expire 15 months after the date of the passing of this resolution or at the conclusion of the next annual general
meeting of the Company following the passing of this resolution, whichever first occurs, but the Company may
before such expiry make an offer or agreement which would or might require equity securities to be allotted
after expiry of this authority and the Directors may allot equity securities in pursuance of that offer or agreement
notwithstanding that the power conferred hereby has expired; and
(b) be limited to:
(i) the allotment of equity securities where such securities have been offered by way of a rights issue, open
offer or otherwise to holders of the ordinary shares in the capital of the Company in proportion (as nearly
as may be) to their existing holdings of ordinary shares but subject to the Directors having a right to make
such exclusions or other arrangements in connection with the offering as they deem necessary or expedient:
(1) to deal with equity securities representing fractional entitlements; and
(2) to deal with legal and practical problems arising in any overseas territory or the requirements of a
regulatory body or stock exchange or any other matters; and
(ii) allotments of equity securities for cash otherwise than pursuant to paragraph (i) above up to an aggregate
nominal amount of £26,298.
8 THAT, the Company be and is hereby generally and unconditionally authorised to make market purchases (within
the meaning of Section 163 (3) of the Companies Act 1985) of ordinary shares of 1 pence each in the capital of the
Company (“ordinary shares”) provided that:
(a) the maximum number of ordinary shares hereby authorised to be purchased is 5,259,690 which represents
approximately 10 per cent of the current issued share capital of the Company;
(b) the minimum price which may be paid for an ordinary share is one pence (exclusive of expenses); and
(c) the maximum price which may be paid for an ordinary share shall not be more than 5 per cent above the average
of the middle market quotations for a ordinary share as derived from the London Stock Exchange Daily Official
List for each of the five dealing days immediately preceding the date on which an ordinary share is purchased.
and shall, unless it is (prior to its expiry) duly revoked or is renewed, expire at the conclusion of the next annual general
meeting of the Company or 15 months from the date of passing of this resolution (whichever shall occur first), save that
the Company may make a contract to purchase ordinary shares under this authority before such expiry which will be
executed wholly or partly after such expiry, and may make a purchase of ordinary shares pursuant to any such contract
as if the authority hereby conferred had not expired.
If you do not indicate how you would like your proxy to vote, he or she may vote or abstain from voting on the Ordinary Resolution as he or she
sees fit.
Your proxy may vote or abstain from voting as he or she sees fit in connection with any other business that may properly come before the AGM.
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Date  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2006 BUSINESS REPLY SERVICE
Licence No. MB 122
Capita Registrars (Proxies)
PO Box 25
BECKENHAM
Kent
BR3  4BR
Second fold
Third fold
and tuck in flap opposite
First fold
2 2  Education Development International plc
International House
Siskin Parkway East
Middlemarch Business Park
Coventry
CV3 4PE
Tel: +44 (0) 24 7651 6500
Fax: +44 (0) 24 7651 6505
Email: info@ediplc.com
Website: www.ediplc.com