Education Development International plc
Annual Report and Accounts 2005 Contents
1 Highlights  
2 Chairman’s Statement
4 Chief Executive’s Report
8 Directors and Advisors
10 Corporate Governance
12 Directors’ Report
14 Statement of Directors’ Responsibilities
15 Independent Auditors’ Report
16 Group Profit and Loss Account
17 Group Statement of Total 
Recognised Gains and Losses
18 Group and Company Balance Sheets
19 Group Cash Flow Statement
20 Notes to the Financial Statements
43 Five Year Financial Review
44 Notice of Annual General Meeting
47 Form of Proxy Education Development International plc
Annual Report and Accounts
1
Highlights
 Revenue up by 20% to £13.2 million (2004: £11.0 million)
 Operating profit, before goodwill amortisation and exceptional costs, up by 10% to
£816,000 (2004: £741,000)
 Adjusted basic earnings per share (excluding goodwill amortisation, exceptional costs and
deferred tax) of 1.5p (2004: 1.5p)
 Share premium account reduced to largely eliminate the deficit on the profit and 
loss account
 Organisation restructuring and move to a single UK site completed ahead of schedule
 Active marketing of surplus leases; onerous lease provision increased by £0.7m
 Successful acquisition and integration of EQL Assessment Limited and Qualifications for
Industry completed in the year 2
Chairman’s Statement
Review of Results 
At the half year I reported that the Group’s financial
performance had continued to strengthen and this trend
has continued over the past six months.
Our business has become more broadly based and this
has enabled us to absorb more readily the impact of
fluctuations in market conditions for our services, both
in the UK and internationally, and focus on the areas
which offer the greatest potential for growth.
The decision to fundamentally reorganise the Company
and move to a single primary site has been fully
implemented and is already bringing operational
benefits.The completion of our systems development
programme during the next financial year will reinforce
these gains.
These results reflect the acquisition of EQL Assessment
Limited (EQL) with effect from 1 October 2004 and of
Qualifications for Industry (QFI) with effect from 
5 September 2005.
Audited accounts for the year to 30 September 2005
show a turnover of £13.2m (2004: £11.0m).The
operating profit for the year before exceptional
operating items and amortisation of goodwill was
£816,000 (2004: £741,000).
The leases of the Sidcup and Leamington Spa offices,
previously used by the Company, are being actively
marketed. In connection with this, the provision for
onerous leases has been increased by £0.7m to £1.2m
to cover future rent exposure.
Basic earnings per share — adjusted to exclude
exceptional operating items, amortisation of goodwill
and deferred taxation — amounted to 1.5p (2004: 1.5p).
At 30 September 2005 net cash stood at £1.8m 
(2004: £2.3m).
Business Development
The most significant development during the course of
the past year has been the completion of the final stages
of the integration of the London Chamber of
Commerce and Industry Examinations Board (LCCIEB)
business which was acquired in December 2002.This
has been achieved through the closure of the former
LCCIEB offices in Sidcup and a move out of the
previous head office in Leamington Spa to a new office
on the outskirts of Coventry where all of our main
business activities are now located.These moves were
completed on budget and ahead of schedule in early July
2005.Work is now under way to reduce exposure to
the surplus property leases.
The EQL business — which specialises in providing 
e-assessment services — has also been restructured.The
small team of specialist staff, based in Livingston, are being
relocated to a new self-contained office within the same
building after a period of co-location with BPP Holdings
plc, the company from which EQL was acquired.
Since gaining management control in June 2004, further
work has taken place to strengthen the operation of
Educational Resources Pte Limited (ER) — EDI’s
subsidiary in South East Asia.A detailed business
strategy and management action plan has been agreed
with the minority shareholders.This will see the transfer
of administrative work from the UK to Kuala Lumpur
and a strengthening of ER’s marketing and sales
capability over the year ahead. Market conditions in
South East Asia remain challenging.
On 5 September 2005 EDI acquired QFI, a small UK
accredited awarding body which specialises in providing
vocational qualifications services to the cultural heritage
sector.This operation fits in well with our wider
vocational qualifications product range and has been
straightforward to integrate.
The co-ordination and integration of all of these
organisation developments is being underpinned by the
in-house development of a customised IT -based
administration system called Campus.The new system is Education Development International plc
Annual Report and Accounts
3
now entering the final stages of development and testing
for the administration of all our qualifications services.
During the year the Company secured the authority of
the Court under the Companies Act 1985 s135(1) and
(2)(b) for a reduction of £9.841m in the share premium
account largely to eliminate the deficit being carried in
the profit and loss account.This will allow the Company
to pay dividends out of future profits.A non-
distributable special reserve of £212,000 has been
created as a requirement of the Court.
Board and Staff
I would like to thank my colleague Directors for their
support in my first year as Chairman. Brian Harris will
not be offering himself for re-election at the AGM
following his retirement as Chairman of the LCCI
Commercial Education Trust. He has made an important
contribution to the development of EDI since the
acquisition of LCCIEB and the Board wishes him well
for the future.
In February 2005 Kumasaran Padmanathan resigned 
as Finance Director, as a result of the decision to close
the Sidcup office, and has been replaced by Neal
Gossage.
I would like to thank and congratulate the staff of EDI
on their commitment throughout what has been a
particularly challenging year.We have said goodbye to
the majority of staff who worked at Sidcup and
recruited a largely new team to work in the new
Coventry office.This has been achieved with the
minimum of disruption.
Prospects
EDI has continued to make good progress over the past
year. Our investment in restructuring and relocation of
the business to consolidate the various acquisitions and
organisational changes of the past two years is now
complete.This and the completion of our business
systems project — when coupled with the Company’s
sound finances — provide a firm base for the
implementation of our longer-term strategy.
We are now in a strong position to leverage our status
as an accredited awarding body to grow the existing
business areas and expand into support materials
publishing and learning programmes development,
student recruitment and support administration services.
EDI has made a satisfactory start to the new financial
year.The vocational qualifications business continues to
perform strongly, but the UK schools and international
qualifications markets continue to be challenging.The full
benefits of our organisation development programme
will fall in the second half of 2005/06 although I look
forward to reporting continued progress throughout
the coming year.
Richard Price
Chairman
23 November 2005 4
Chief Executive’s Report
Introduction
The key tasks of the past 12 months have been the
implementation of our organisation development plan
and the introduction of a more focused sales effort
aimed at the business areas which offer the greatest
potential for growth.
At the same time, we have increased the scope of our
business systems project and developed strategies to
address the areas of our business where we face the
greatest challenges in the market.
Progress on all of these fronts has enabled the
Company to deliver continued business growth and
provide an increasingly strong foundation to support
our plans for the future.
The turnover analysis set out below provides
comparative data for the main areas of business activity:
Year to 30 September
2005 2004
£ million £ million
Vocational qualifications 4.82 3.62
Examinations 5.11 5.55
Assessment services 1.09 1.02
Service contracts 2.00 0.61
Other 0.17 0.16
13.19 10.96
Organisation Development
Our development programme has covered the three
main areas of relocation of office facilities, restructuring
of management and staff and administration systems
development.
Relocation
The move into our new head office building,
International House — on the outskirts of Coventry —
which is also the base for the majority of our business
operations, was completed on 4 July 2005 ahead of the
target date of 1 October 2005.At the same time the
former LCCIEB office in Sidcup was closed.A small
number of specialist administrative and IT staff have
been retained at Sidcup to assist with transitional issues
and to oversee the IT facilities until these are fully
transferred to Coventry with the introduction of the
new administrative system during early 2006.The
former head office in Leamington Spa was also vacated
in July 2005.
The office closures and relocation programme were
completed within budget although there have been some
additional duplicate costs as a result of the earlier than
expected move into International House.We are actively
marketing the surplus leases and we have made an
additional onerous lease provision of £718,000 to cover
ongoing liabilities.
Restructuring
To coincide with the office closure and relocation
programme, we introduced a new management
structure with effect from July 2005.
The new structure reflects the benefits of co-location 
of staff teams and has been designed to bring more
focused direction to our key functional business areas 
of education development, business development,
operations and finance and administration.
The year end head count has reduced from 135 to 116
at a time when the level of business activity has
increased by 20%.We expect to make further efficiency
gains as the new structure fully beds in and the
administrative systems are introduced during the first
half of 2006.
The balance of staff between administration and
business development reflects the improving level of
operational efficiency and our increasing focus on
operational and business development activities:
Staff levels at 30 September
2005 2004
Operations 44 48
Education Development 18 12
Business Development 31 35
Finance and Administration 23 40
T otal 116 135 Education Development International plc
Annual Report and Accounts
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In addition to the main reorganisation programme, we
have also restructured and integrated into our
operations division the specialist team of staff based in
Livingston who are responsible for the development and
operation of the EQL i-assess platform.The one
member of staff who transferred to EDI as a result of
the acquisition of Qualifications for Industry Ltd (QFI)
has joined the UK business development team.
Working with the Board of Educational Resources Pte
Ltd (ER) we have agreed a new structure for that
organisation which will more clearly separate the
operations function from the business development
function.This is in anticipation of the transfer of more
routine administrative work from the UK to the ER
operations office in Kuala Lumpur and an investment in
strengthening the Company’s business development
capabilities. During the course of the year we will be
reviewing ER’s property requirements to ensure these
properly match up with the new shape of the business.
The current ER head count, included in the totals, is 24
— spread across offices in Singapore, Kuala Lumpur, Hong
Kong and China.
Administration Systems Development
Work to develop and implement our new customised
administration system Campus is now entering its final
stages.This project has been based on a full review of all of
our business processes and, as a result, many of these have
been either streamlined or replaced before new software
has been developed. Because of this, the new systems will
be both more efficient and effective as they will better
integrate the ‘supply chain’ of the qualifications process and
enable us to delegate more of the general administration
down to customer level.When the new arrangements are
fully in place we will have significantly improved both
service levels and the degree of responsiveness we are able
to offer our customers.
The new system for the administration of international
qualifications is already being used in our major markets
in Germany and South East Asia with other markets
coming on stream over the next few months.The
second stage of the project is to introduce Campus for
the UK vocational qualifications market. Pilot work with
key customers is already under way and we expect this
exercise to be fully completed by summer 2006.
The costs of this development programme are in line
with the original Board estimates.The continued
refinement and development of our IT systems and
platforms will be a regular feature of our business
operation.
Although our organisation development programme will
deliver savings in overhead and administrative costs, the
main driver has been to modernise and further
professionalise the delivery of our range of services 
as a basis for business growth and development.
Services 
Vocational Qualifications
Sales of vocational qualifications for the year rose by
33% to £4.82m.
This continued strong growth reflects the continued
introduction of new products and services, improved
performance by our key customers and securing new
customers, particularly in the important further
education college sector which represents around 80%
of the total UK market.
Our product development programme has benefited
from our close links with a number of the Sector Skills
Councils — who are responsible for vocational
qualifications standards — and the upgrading of our
accredited status by the Qualification and Curriculum
Authority (QCA).The latter will enable us to secure
regulatory approval for new qualifications on a special
five-day turnaround programme. EDI is one of the first
awarding bodies to achieve this status.
The government — through QCA — is continuing to
review the arrangements for the form and structure of
vocational qualifications in the future and the Learning
and Skills Council (LSC) has also introduced changes to
the way in which government-supported vocational
training programmes will be funded.The impact of these
developments is likely to be spread over a period of 6
Chief Executive’s Report
two or three years and should offer opportunities for
EDI to develop new services tailored to meet the
requirements of the developing scene.
The acquisition of QFI brings in existing sales of around
£120,000 per annum together with a new range of
specialist qualifications and customers in the cultural
heritage sector.This sits well with our existing work with
the retail, hospitality and tourism sectors and, therefore,
offers the opportunity for the full range of EDI products
and services to be offered to this new customer base.
EDI has also been successful in gaining accreditation for a
new suite of English for Speakers of Other Languages
(“ESOL”) qualifications.This extends the range of
qualification types, and should be particularly beneficial in
extending the college-based business.
Plans are in place to continue to strengthen our business
development capabilities in this important area of our
business. In particular, we will develop our links with the
further education sector and also seek to increase our
presence in Scotland,Wales and Northern Ireland.
Examinations
Sales of our international qualification services for the
year were down 8% on last year at £5.11m.
The overall position in our international markets
disguises a number of significant trends.While the
position in the established markets of Malaysia (down
26% in value) and Germany (down 19% in value) has
declined, we have seen strong growth in our newer
markets (up 27% in value) albeit from a lower base.
As part of the development of the international
qualifications market we have now completed a review
of the contractual arrangements with our agents.This
will lead to a stronger base for the administration and
management of our agency agreements and the
development of more formal partnerships or joint
venture agreements in the more significant markets.
We have closely reviewed the strategy and management
arrangements for ER and we expect the management
focus and improved business development and
administration capability which will flow from this to
have a positive impact on our activities in South 
East Asia.
We have recently entered into an agreement with
Kuwait Petroleum Corporation to accredit its training
programmes.This is an important development which
should start to generate revenue from early 2006 and
provide further opportunities in the future.We already
have a well-established market in Cyprus and have
recently appointed an agent based there to undertake a
business development role in the Eastern Mediterranean
and the Middle East.
We are nearing the end of an important programme to
modernise our range of English language assessments
and qualifications and make as many of these as possible
available online. Over the year ahead we will be
undertaking a similar exercise to refresh our financial
qualifications to reflect the changing requirements of the
European and wider global markets for financial
qualifications.
Underpinning all of our activities in international
markets is an increased emphasis on the formal
accreditation of our qualifications both by local and UK
authorities.This is particularly important where students
are looking to progress to either higher or professional
qualifications and need to demonstrate that they hold
formally recognised qualifications.The London Chamber
of Commerce and Industry (LCCI) brand and history
when coupled with formal accreditations provides a
powerful base for promoting the brand and introducing
new qualifications and learner support services.
Assessment Services
Sales of assessment services to UK schools for the year
were up 7% on last year at £1.09m.
After a reasonably buoyant first half, the second half of
the year, as anticipated, has seen a slowing down of the
schools market.This overall position disguises important
trends in the market, particularly an increase of 35% in
higher value sales to secondary schools which has offset
lower levels of sales to primary schools.The latter are
currently sensitive about the potential financial impact of
the new arrangements which began in September 2005 Education Development International plc
Annual Report and Accounts
7
to give teachers a half-day away from the classroom for
planning, preparation and assessment work.
Looking ahead, the government’s White Paper (High
Standards, Better Schools For All) envisages addressing
weaknesses in assessment through structured,
personalised programmes.The increase in rigour in this
area, together with the emphasis on stronger self-
evaluation through electronic tools, should provide a
positive backdrop for further sales of our Schools
Continuous Improvement Programme. In the coming
year greater efforts will be directed at developing the
range of our assessment services and, in particular, giving
schools the option to purchase either online or CD-
based assessments on a subject by subject basis.We are
also strengthening both our product and business
development teams as we continue to establish our
long-term position in this specialist market.
Service Contracts
The value of service contracts for the year were up
228% on last year at £2.00m.
Significant progress has been made in this important
business area over the past 12 months reflecting our
strategy of developing and promoting specialist
assessment software and administrative support
services.
During 2005/06 we will seek to consolidate and grow
our contractual arrangements with our existing
customers although there are clear indications that
other organisations are seeking to outsource their
technology and administration arrangements.
We believe our continued investment in the
development of flexible, automated systems stands us in
good stead both in terms of servicing our own
customers and responding to changes in government
requirements. It also provides the base for developing
our range of assessment, logistics and support services
for other organisations.
Looking Ahead
After a period of significant internal and external
change, the final stages of which will be completed
during the first half of 2006, EDI has a stable platform
for performance and growth.
Alongside our organisation development programme,
we have continued to strengthen our position in most
of our markets and develop a better understanding of
the key drivers for growth and how most effectively
these can be addressed.We are continuing to strengthen
our product and business development capabilities and
increase both the range and professionalism of our
service delivery and market development arrangements
both in the UK and internationally. Our links with
government departments and agencies both at home
and abroad are strengthening and EDI is becoming an
increasingly influential player in a number of important
markets.
We now have the potential to develop the scale and
range of our operations both through organic growth
and through new partnerships and acquisitions.
Nigel Snook
Chief Executive
23 November 2005 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. Following the
acquisition of LCCIEB he continued as Chief Executive
of the enlarged Group.
Nigel has over 25 years’ experience of the education
and employment sector working in government
agencies and training organisations. He was previously
Chief Executive of Lantra, the Sector Skills Council for
the land-based and environmental sector, which
provides a wide range of research, standard setting,
qualifications and training services.
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. He is co-founder and recently 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 is Chairman of the Financial Reporting
Council and is a Director of Equitas. He was previously
Chairman of the Post Office, BUPA,The Manpower
Services Commission,The Council of the Open
University and Cookson Group plc, and Chancellor of
Sheffield Hallam University. Sir Bryan has also served 
on the Boards of Rank Xerox, Lucas Varity plc and
GKN plc.
Barrie Clark 
Independent Non-executive Director
Barrie holds non-executive directorships with a number
of public and private companies. He is non-executive
Director and Chairman of the Remuneration
Committee of Spring Group plc. He also acts as non-
executive Chairman of IS Solutions plc. Barrie’s executive
background focused on financial and operational
management in small to medium sized businesses.
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. Education Development International plc
Annual Report and Accounts
9
Brian Harris
Non-executive Director
Brian was, until October 2005, Chairman of Trustees of
the LCCI Commercial Education Trust and is a
Consultant to the firm CB Richard Ellis, the
international property consultants.
He was Chairman of Priority Sites Land and
Development Company owned jointly by the Royal
Bank of Scotland and English Partnerships until June
2003, was elected President of the London Chamber of
Commerce and Industry in 1992 and served for two
years — he remains a Vice-President of the Chamber.
He has also served as Deputy President of the British
Chamber of Commerce and on the Board of London
First.
Brian served as a member of the Court of the
Common Council of the Corporation of London from
1996 until 2004 and was Sheriff of the City in
1998/1999. His other City involvement is as Past Master
of the Worshipful Company of Glaziers and as a
Liveryman of the Worshipful Company of World
Traders. He is also a fellow of the Royal Society of Arts.
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
 Mr N M Snook
 Mr N T Gossage (appointed on 14 June 2005)
 Mr W J Swords (resigned on 31 March 2005)
 Mr K Padmanathan (resigned on 11 February 2005)
Non-executive Directors
 Mr R Price (appointed Chair 20 January 2005, to be
reappointed at the next AGM)
 Mr B A Clark
 Mr W N Dore
 Mr B N Harris 
 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 non-executive
Director. Mr B A Clark and Mr R Price are independent
non-executive Directors. Mr B N Harris and Mr W N
Dore are non-executive Directors.
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 7.
Committees of Board
The Remuneration Committee 
During the year the members of the remuneration
committee were:
 Sir Bryan Nicholson (appointed Chair 20 January
2005, to be reappointed Chair at next AGM)
 Mr B A Clark 
 Mr W N Dore 
 Mr R Price 
The Audit Committee
During the year the members of the audit committee
were:
 Mr B A Clark (appointed Chair 20 January 2005, to
be reappointed Chair at next AGM)
 Mr B N Harris (to resign at next AGM)
 Mr R Price 
The Nominations Committee 
During the year the members of the nominations
committee were:
 Mr B N Harris (Chair, to resign at next AGM)
 Sir Bryan Nicholson (to be appointed Chair at 
next AGM)
 Mr N M Snook (to resign at next AGM)
 Mr W J Swords (resigned 31 March 2005)
It is the intention of the Board to appoint additional
members to the Audit and Nominations Committees at
the next AGM.
The following documents are available for inspection by
the shareholders at the Company’s registered office:
 Terms of reference of the audit, remuneration and
nominations committees
 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 Education Development International plc
Annual Report and Accounts
11
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.
Internal Control
The Board is responsible for the Group’s systems of
internal control and recognises that these systems can
provide only reasonable and not absolute assurance
against material misstatement or loss.
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.
The main elements of the internal control systems are:
 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.
 A budget setting process with both annual and
longer-term forecasts reviewed and approved by the
Board.
 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.
 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.
 A framework for capital expenditure and controls
including authorisation procedures and rules relating
to the delegation of authority.
 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.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 2005/6 and
indicative budgets for 2006/7 and 2007/8, 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
Directors’ Report
The Directors present their report and the audited
financial statements for the year ended 30 September
2005.
Principal Activities
The Group’s activities include the development and
supply of on-line assessment services for schools,
business and English language related international
qualifications, a wide range of UK vocational
qualifications and specialist assessment and
administrative services for other awarding and
professional bodies.
On 1 October 2004 the Group acquired the entire
share capital of EQL Assessment Limited, a company
which has developed and supplies i-assess branded
electronic assessment services.
On 5 September 2005 the Group acquired the business
and goodwill of Qualifications for Industry (“QFI”), a
business providing vocational qualifications in the
cultural heritage, transport and logistics and retail
sectors.
Business Review and Future Developments
A review of the year’s operations and future prospects
is given in the Chairman’s Statement and the Chief
Executive’s Report.
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 18 at 30 September 2005 (2004: 28).
Dividends
The Directors do not recommend the payment of a
dividend for the year ended 30 September 2005 
(2004: £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.
Directors
The Directors serving during the year were as follows:
R Price* 
B A Clark*
W N Dore*
N T Gossage (appointed 14 June 2005)
B N Harris* 
Sir Bryan Nicholson*
N M Snook
K Padmanathan (resigned 11 February 2005)
W J Swords (resigned 31 March 2005)
* Non-executive Directors Education Development International plc
Annual Report and Accounts
13
Those Directors serving at the end of the year had
interests in the share capital of the Company at 
30 September 2005 as follows:
Ordinary shares
30 Sept 30 Sept
2005 2004*
Number Number
B A Clark 502,222 2,222
W N Dore 10,000,000 10,000,000
N T Gossage 40,000 40,000
B N Harris — —
Sir Bryan Nicholson 500,000 15,000
R Price 500,000 —
N M Snook 41,500 41,500
* Or date of appointment if later
The shareholdings are all beneficial and have not
changed between 30 September 2005 and 
23 November 2005. Directors’ share options are shown 
in note 21 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 November 2005:
London Chamber of Commerce and 
Industry Commercial Education Trust 43.0%
Mr W N Dore 19.1%
Mr D G Newman 11.4%
AGM resolutions
The resolutions to be proposed at the Annual General
Meeting to be held on 26 January 2006, together with
explanatory notes, are listed in the Notice of Annual
General Meeting on page 44.
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
23 November 2005 14
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.
In preparing these financial statements, the Directors
are required to:
 select suitable accounting policies and apply them
consistently;
 make judgements and estimates that are reasonable
and prudent; and
 state whether applicable United Kingdom accounting
standards have been followed, subject to any
material departures disclosed and explained in the
financial statements.
The Directors are responsible for keeping proper
accounting records which disclose with reasonable
accuracy at any time the financial position of 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 Group
and hence for taking reasonable steps for the
prevention and detection of fraud and other
irregularities. Education Development International plc
Annual Report and Accounts
15
Independent Auditors’ Report to the Shareholders
of Education Development International plc
We have audited the financial statements on pages 
16 to 42.
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.
To 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 United Kingdom Accounting
Standards 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 United Kingdom Auditing Standards.
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 if, in our opinion, the Directors’
Report is not consistent with the financial statements, if
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 or the AIM rules regarding Directors’
remuneration and transactions with the Company and
other members of the Group is not disclosed.
We read the other information contained in the Annual
Report and consider whether it is consistent with the
audited financial statements.The other information
comprises only the Chairman’s Statement, the Chief
Executive’s Report, the Schedule of Directors and
Advisors, the Corporate Governance Statement, the
Directors’ Report, the Statement of Directors’
Responsibilities, the Five Year Summary, Notice of the
Annual General Meeting and Form of Proxy.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 United
Kingdom Auditing Standards 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 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 the financial statements give a true and
fair view of the state of affairs of the Company and the
Group as at 30 September 2005 and of the Group’s
loss for the year then ended and the financial
statements have been properly prepared in accordance
with the Companies Act 1985.
RSM Robson Rhodes LLP
Chartered Accountants and Registered Auditors
Birmingham, England
23 November 2005 16
Group Profit and Loss Account
For the year ended 30 September 2005
Years ended
30 Sept 30 Sept
2005 2004
T otal
Existing Continuing Continuing
Operations Acquisitions Operations Operations
Note £’000 £’000 £’000 £’000
Turnover 2 12,576 609 13,185 10,962 
Cost of sales (3,764) (9) (3,773) (4,058)
Gross profit 8,812 600 9,412 6,904
Administrative costs
Non-exceptional administrative costs
before amortisation
of goodwill (8,144) (452) (8,596) (6,163)
Amortisation of goodwill 11 (205) (11) (216) (188)
Exceptional administrative costs 3 (718) — (718) (430)
(9,067) (463) (9,530) (6,781)
Operating (loss)/profit
Before exceptional operating items
and amortisation of goodwill 668 148 816 741
Amortisation of goodwill 11 (205) (11) (216) (188)
Exceptional operating items 3 (718) – (718) (430)
T otal operating (loss)/profit 2 (255) 137 (118) 123
Net interest payable 4 (24) (31)
(Loss)/profit on ordinary activities
before taxation 5 (142) 92
Tax on (loss)/profit on ordinary activities 9 (20) 215
(Loss)/profit on ordinary activities
after taxation (162) 307
Minority interests — equity 24 (31) 53
(Loss)/retained profit for the year 22 (193) 360
(Loss)/earnings per share 10
Basic and diluted (0.4)p 0.7p
Basic adjusted for exceptional operating items,
amortisation of goodwill and
deferred taxation 1.5p 1.5p Education Development International plc
Annual Report and Accounts
17
Group Statement of Total Recognised 
Gains and Losses For the year ended 30 September 2005
Years ended
30 Sept 30 Sept
2005 2004
Note £’000 £’000
(Loss)/profit attributable to shareholders (193) 360
Actuarial (loss)/gain relating to the pension scheme 26 (86) 609
UK deferred tax attributable to the actuarial (loss)/gain 25 (203)
Currency translation differences (3) 1
T otal recognised (loss)/gain for the financial year before prior year adjustment 23 (257) 767
Prior year adjustment in 2004 for FRS 17 – 205
T otal recognised (loss)/gain for the financial year (257) 972 18
Group and Company Balance Sheets
At 30 September 2005
Group Company
2005 2004 2005 2004
Note £’000 £’000 £’000 £’000
Fixed assets
Intangible assets — goodwill 11 3,793 3,754 3,135 3,317 
Tangible assets 12 681 171 671 152 
Investments 13 – – 942 687
4,474 3,925 4,748 4,156
Current assets
Stocks 14 74 47 43 25 
Debtors 15 2,487 1,697 2,286 1,859 
Cash at bank and in hand 1,806 2,349 1,220 1,724
4,367 4,093 3,549 3,608
Creditors: Amounts falling due within one year 16 (3,048) (2,342) (2,494) (1,837)
Net current assets 1,319 1,751 1,055 1,771
T otal assets less current liabilities 5,793 5,676 5,803 5,927
Creditors: Amounts falling due after one year 17 (10) – (332) (403)
Provisions for liabilities and charges 18 (1,278) (1,011) (1,278) (1,011)
Net assets excluding pension liabilities 4,505 4,665 4,193 4,513
Defined benefit pension liabilities net of deferred taxation 26 (1,269) (1,246) (1,269) (1,246)
T otal net assets 2 3,236 3,419 2,924 3,267
Capital and reserves
Called up share capital 21 524 517 524 517 
Share premium account 22 2,799 12,591 2,799 12,591 
Special reserve 22 212 – 212 – 
Own shares held 22 (13) – (13) –
Profit and loss account 22 (507) (9,879) (598) (9,841)
Equity shareholders’ funds 23 3,015 3,229 2,924 3,267
Equity minority interests 24 221 190 – –
3,236 3,419 2,924 3,267
Nigel Snook Neal Gossage
Chief Executive Finance Director
23 November 2005 Education Development International plc
Annual Report and Accounts
19
Group Cash Flow Statement
For the year ended 30 September 2005
Years ended
30 Sept 30 Sept
2005 2004
Note £’000 £’000
Net cash inflow from operating activities 27 239 1,192
Returns on investment and servicing of finance
Interest received 28 44 47
Taxation received 8–
Capital expenditure and financial investment
Payment for tangible fixed assets 12 (685) (74)
Receipts from the sale of tangible fixed assets 2 46
Acquisitions and disposals
Purchase of subsidiary undertaking 11 (158) (385)
Cash acquired with subsidiary undertaking – 190
Purchase of business 11 (32) –
Financing
Issue of ordinary share capital 21 56 –
Purchase of own shares 22 (13) –
(Decrease)/increase in cash 29 (539) 1,016 20
Notes to the Financial Statements
30 September 2005
1. ACCOUNTING POLICIES
Basis of accounting
The Group financial statements are prepared under the
historical cost convention and in accordance with
applicable accounting standards. UITF 38 “Accounting for
ESOP Trusts” has been adopted from 1 October 2004;
UITF 38 requires consideration paid for own shares to be
deducted in arriving at shareholders’ funds rather than
being carried as an asset.There is no impact on the prior
year results.
Basis of consolidation
The Group accounts comprise a consolidation of the
accounts of the Company and its subsidiary undertakings
at 30 September using acquisition accounting.The results
of subsidiary undertakings acquired during the financial
year are included from the date of acquisition.
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 and amortised
evenly over its estimated individual useful economic life,
which will not exceed 20 years. In addition to systematic
amortisation, the book value of goodwill is written down
to its recoverable amount when any impairment is
identified.
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
30 September. Exchange differences are taken to the profit
and loss account.
In the consolidated accounts, the assets and liabilities of
foreign subsidiaries are translated into Sterling at the rates
of exchange ruling at 30 September.The trading results of
foreign subsidiaries are translated into Sterling using an
average exchange rate for the period of consolidation, and
the difference in relation to closing rates is taken to
reserves.
Turnover
Turnover, excluding amounts receivable under annual
licence agreements, represents amounts invoiced by the
Group in respect of services provided during the year,
excluding value added tax.Amounts receivable under
annual licence agreements are credited to deferred income
and released to the profit and loss account on a straight-
line basis over the duration of the agreements.
Pensions
The Group operates a defined benefit pension scheme. In
accordance with FRS 17 “Retirements Benefits”, 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 profit and loss account.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 profit
and loss account under “net interest payable”.
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 net of deferred tax.Any difference between the
expected return on assets and that actually achieved is
recognised in the statement of total recognised gains and
losses along with differences arising from experience or
assumption changes.
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.
Further information on pension arrangements is set out in
note 26 to the accounts.
T axation
The payment of taxation is deferred or accelerated
because of timing differences between the treatment of
certain items for accounting and taxation purposes. Full
provision for deferred taxation is made under the liability
method, without discounting, on all timing differences that
have arisen, but have not reversed by the balance sheet
date, unless such provision is not permitted by FRS 19.
Deferred tax assets are recognised to the extent that it is
regarded as more likely than not that they will be
recovered.
Research and development
Expenditure incurred in market research and product
development and testing is written off in the year in which
it is incurred.
Leased assets
Rentals payable under operating leases are charged to the
profit and loss account on a straight-line basis over the
period of the leases. Education Development International plc
Annual Report and Accounts
21
Onerous leases
Where a leased property is vacant or sub-leased to a
third party at below market rent, a provision is recognised
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.
Tangible fixed assets and depreciation
Depreciation is calculated on a straight-line basis to write
tangible fixed assets down to their estimated residual
values over their expected useful lives.Where there is
evidence of impairment, fixed assets 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
Stocks
Stocks 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.
2. SEGMENT AL ANAL YSIS
Analysis by area of geographical operations
The Group operates from the UK and from South East Asia through Educational Resources Pte Limited.
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Turnover
United Kingdom 12,950 10,856
South East Asia 235 106
13,185 10,962
Operating (loss)/profit
United Kingdom (282) 230
South East Asia 164 (107)
(118) 123
Net assets
United Kingdom 2,459 2,827
South East Asia 777 592
3,236 3,419 22
Notes to the Financial Statements
30 September 2005
2. SEGMENT AL ANAL YSIS (continued)
Turnover by geographical market (by destination):
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Existing operations
United Kingdom 8,049 6,073
Rest of Europe 1,609 1,802
Far East and Asia 2,348 2,683
Rest of World 570 298
12,576 10,856
Acquisitions
United Kingdom 609 –
Far East and Asia – 106
609 106
T otal continuing operations
United Kingdom 8,658 6,073
Rest of Europe 1,609 1,802
Far East and Asia 2,348 2,789
Rest of World 570 298
13,185 10,962
Turnover by business type:
Existing operations
Examinations 5,112 5,446
Vocational qualifications 4,818 3,617
Assessment services 1,085 1,018
Service contracts 1,389 609
Other 172 166
12,576 10,856
Acquisitions
Examinations – 106
Service contracts 609 –
609 106
T otal continuing operations
Examinations 5,112 5,552
Vocational qualifications 4,818 3,617
Assessment services 1,085 1,018
Service contracts 1,998 609
Other 172 166
13,185 10,962
Due to the similarities of the income streams shown above, costs are incurred on a centralised basis and therefore no analysis
of operating (loss)/profit by business type or geographical market by destination is given. Education Development International plc
Annual Report and Accounts
23
3. EXCEPTIONAL OPERATING ITEMS
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Recognised in arriving at operating (loss)/profit
Onerous lease provisions 718 –
Provision for restructuring costs – 430
718 430
As explained more fully in note 18, the onerous lease provision relates to future obligations under lease contracts in respect
of office space vacated following the closure of the Sidcup and Leamington Spa offices during the year ended 30 September
2005.
4. NET INTEREST PAYABLE
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Net finance charge on pension schemes (see note 26) 47 49
Bank interest receivable (44) (47)
Unwinding of discount on onerous lease provision (see note 18) 21 29
24 31
\ 24
Notes to the Financial Statements
30 September 2005
5. (LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
The (loss)/profit on ordinary activities before taxation is arrived at after charging/(crediting):
Years ended
30 Sept 30 Sept
2005 2004
Depreciation of tangible fixed assets 167 113
Amortisation of goodwill 216 188
Auditors’ remuneration
– audit services 48 48
– non-audit services 29 42
Loss/(profit) on disposal of fixed assets 6 (9)
Rentals under operating leases
– land and buildings 466 354
– other 23
Foreign exchange losses 185 17
During the year the Company’s auditors were paid £34,000 (2004: £32,000) in respect of audit services and £28,000 (2004:
£15,000) in respect of non-audit services. (The fees paid in the accounting year to 30 September 2004 include £23,000 in
relation to the acquisition of Educational Resources Pte Limited which has been capitalised.)
6. EMPLOYEES
Average weekly number of employees, including Executive Directors:
Years ended
30 Sept 30 Sept
2005 2004
Number Number
Sales and marketing 37 19
Product development 18 11
Operations 47 35
Administration and finance 24 28
126 93
Years ended
30 Sept 30 Sept
2005 2004
£000 £000
Wages and salaries 3,580 2,851
Social security costs 374 288
Other pension costs
Defined benefit scheme (see note 26) – 40
Defined contribution schemes 187 155
187 195
4,141 3,334 Education Development International plc
Annual Report and Accounts
25
7. DIRECTORS
Emoluments of the Company’s Directors:
Salary and Benefits Pensions T otal T otal
fees in kind 2005 2005 2004
£’000 £’000 £’000 £’000 £’000
Non-executives
R Price 27 – – 27 10
B A Clark 20 – – 20 10
W N Dore 10 – – 10 10
B N Harris – – – – – 
P L Morley* – – – – 3  
Sir Bryan Nicholson 23 – – 23 18    
Executives
N M Snook 188 10 22 220 161 
N T Gossage† 41 – 6 47 – 
K Padmanathan‡ 155 9 6 170 112
W J Swords‡ 70 14 11 95 157
Aggregate emoluments 534 33 45 612 481
* Resigned from the Board on 22 January 2004. Remuneration up until that date is shown above.
† Appointed to the Board during the year ended 30 September 2005.
‡ Resigned from the Board during the year ended 30 September 2005.
Salary and fees for Mr K Padmanathan includes compensation for loss of office of £120,000, which was paid during the year.
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 21.
8. RELATED PARTY TRANSACTIONS
A summary of the related party transactions undertaken during the period, all of which have been completed on an arm’s
length basis, is as follows:
Value of transactions Balance at
30 Sept 30 Sept 30 Sept 30 Sept
2005 2004 2005 2004
Related party Description £’000 £’000 £’000 £’000
H L Investments Limited
1
Provision of premises and 82 84 – –
leasehold improvements
Spring Group plc
2
Provision of programmers 81 14 – 4
1
Company controlled by W N Dore, a Director of the Company.
2
Company for which B A Clark, a Director of the Company, acts as a director. 26
Notes to the Financial Statements
30 September 2005
9. TAXATION
The taxation charge/(credit) for the year is analysed below:
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Current tax
United Kingdom corporation tax
Adjustments in respect of prior periods (30) –
Foreign tax
Current tax on income for the year 35 17
Adjustments in respect of prior periods – (12)
Total foreign tax charge 35 5
T otal current tax charge 55
Deferred taxation
United Kingdom
Net origination and reversal of timing differences 15 (235)
Foreign tax
Net origination and reversal of timing differences – 15
T otal deferred taxation charge/(credit) 15 (220)
Tax on (loss)/profit on ordinary activities 20 (215)
There is no liability to UK corporation tax at 30 September 2005 owing to trading losses brought forward from previous
accounting periods.
The Group has UK trading losses available to carry forward against future trading profits of approximately £9.9 million at
30 September 2005 (2004: £9.0 million).
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Current tax reconciliation
(Loss)/profit on ordinary activities before taxation (142) 92
Theoretical tax (credit)/charge at UK corporation tax rate of 30% (2004: 30%) (43) 28
Effects of:
Permanent differences 64 11
Unprovided movement in accelerated capital allowances (53) 4
Unprovided movement in short-term timing differences 7 (12)
Repayment of research and development tax credit (30) –
Pension deficit 10 –
Unprovided movement in losses 50 (31)
Foreign tax rate difference –5
Actual current tax charge 55 Education Development International plc
Annual Report and Accounts
27
10. (LOSS)/EARNINGS PER SHARE
The basic (loss)/earnings per ordinary share is calculated on the loss in the year of £193,000 (2004: profit of £360,000), divided
by 51.8 million (2004: 49.4 million) ordinary shares, being the weighted average number of shares in issue during the year.
Diluted earnings per share is calculated after allowing for the dilutive effect of the conversion into ordinary shares of the
weighted average number of share options outstanding during the year.
Effect of exceptional operating items, goodwill amortisation and deferred taxation on (loss)/earnings per
ordinary share
Year ended Year ended
30 Sept 2005 30 Sept 2004
Earnings/ Earnings/
(loss) per (loss) per
£’000 share £’000 share
(Loss)/profit for the year (193) (0.4)p 360 0.7p 
Adjustments
Exceptional operating items 718 1.5p 430 0.9p 
Amortisation of goodwill 216 0.4p 188 0.4p 
Deferred taxation charge/(credit) 15 0.0p (220) (0.5)p
Adjusted profit after taxation 756 1.5p 758 1.5p
An adjusted earnings per share has been presented to show the underlying performance of the Group.
11. INT ANGIBLE ASSETS
Positive goodwill
Group Company
£’000 £’000
The Group and Company
Cost
At 1 October 2004 6,701 6,259
Arising in the year 255 –
At 30 September 2005 6,956 6,259
Amortisation and impairment
At 1 October 2004 2,947 2,942
Amortisation charged in the year 216 182
At 30 September 2005 3,163 3,124
Net book value
At 30 September 2005 3,793 3,135
At 30 September 2004 3,754 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. 28
Notes to the Financial Statements
30 September 2005
11. INT ANGIBLE ASSETS (continued)
Group
Educational Resources Pte Limited was acquired in 2004 and provisional fair values were assessed on acquisition.There have
been no amendments to the provisional fair values reported in the 2004 accounts.
Goodwill arose in the year on two acquisitions by the Group. On 1 October 2004 the Group acquired the entire share capital
of EQL Assessment Limited, a company specialising in electronic assessment activities.The initial consideration for this
acquisition (before costs) was £153,000 which was paid from existing cash resources.Additionally, EDI has agreed to pay
further consideration in cash over a period of three years dependent on the achievement of predetermined targets for
turnover growth in each of the three financial years following the acquisition.The Directors’ best estimate of the value of the
total deferred consideration, based on current revenue forecasts, is £65,000.The maximum deferred consideration has been
capped at £850,000 within the sale and purchase agreement.
Fair values
The book values and fair values of the assets and liabilities acquired were as follows:
£’000
Book value and fair value of assets acquired –
Goodwill 223
223
Satisfied by
Cash consideration 153
Deferred consideration 65
Costs of acquisition 5
223
Since the acquisition EQL Assessment Limited has contributed £62,000 to the Group’s operating cash flow. EQL Assessment
Limited commenced trading on 1 October 2004.This is the first reporting period for this company and therefore there are no
results for prior periods.
On 5 September 2005 the Group acquired the business and goodwill of Qualifications for Industry (“QFI”), a business
providing vocational qualifications in the cultural heritage, transport and logistics and retail sectors.
Fair values
The book values and fair values of the assets and liabilities acquired were as follows:
£’000
Book value and fair value of assets acquired –
Goodwill 32
32
Satisfied by
Cash consideration 30
Costs of acquisition 2
32
Since the acquisition QFI has not contributed to the Group’s operating cash flow. QFI’s profit after tax for the period from 
1 October 2004 to 5 September 2005 was £50,000 (2004: 12 months ended 30 September 2004 loss of £44,000). Education Development International plc
Annual Report and Accounts
29
12 T ANGIBLE ASSETS
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
Currency translation adjustment – 1 1 (3) (1)
Additions 11 613 20 41 685
Disposals – (133) (211) (86) (430)
At 30 September 2005 25 896 55 48 1,024
Depreciation
At 1 October 2004 12 270 222 95 599
Currency translation adjustment – 1 1 (3) (1)
Charge for year 3 142 18 4 167
Disposals – (125) (211) (86) (422)
At 30 September 2005 15 2883010 343
Net book values
At 30 September 2005 10 6082538 681
At 30 September 2004 2 145 23 1 171
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 11 602 19 41 673
Disposals – (117) (210) (86) (413)
At 30 September 2005 25 8452442 936
Depreciation
At 1 October 2004 12 230 195 87 524
Charge for year 3 132 16 3 154
Disposals – (117) (210) (86) (413)
At 30 September 2005 15 245 1 4 265
Net book values
At 30 September 2005 10 6002338 671
At 30 September 2004 2 130 20 – 152 30
Notes to the Financial Statements
30 September 2005
13. INVESTMENTS
Investments
in subsidiary
undertakings
Company £’000
Cost 
At 1 October 2004 687
Additions 255
At 30 September 2005 942
Provisions and amounts written off
At 1 October 2004 –
Disposals –
At 30 September 2005 –
Net book values
At 30 September 2005 942
At 30 September 2004 687
The Company’s investments at 30 September 2005 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 Electronic assessment services
GOAL Limited 100% England & Wales Dormant
* Indirect holding through Educational Resources Pte Limited. Education Development International plc
Annual Report and Accounts
31
14. STOCKS
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Goods for resale 74 47 43 25
The replacement cost of the above stocks would not be significantly different from the values stated.
15. DEBTORS
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Due within one year
Trade debtors 1,843 1,135 1,731 1,106 
Deferred tax asset 200 200 200 200
Amounts owed by Group undertaking – – – 213 
Other debtors 124 62 103 40 
Prepayments and accrued income 320 300 252 300
2,487 1,697 2,286 1,859
Deferred tax asset 
The deferred tax asset/(liability), together with amounts unprovided, comprises the following:
Provided Unprovided
30 Sept 30 Sept 30 Sept 30 Sept
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Accelerated capital allowances – – (26) 27
Short-term timing differences – – 13 6
Losses 200 200 2,645 2,695
200 200 2,632 2,728
The movement in the year:
30 Sept 30 Sept
2005 2004
£’000 £’000
Opening deferred tax asset 200 –
Net origination – 200
Closing deferred tax asset 200 200 32
Notes to the Financial Statements
30 September 2005
16. CREDITORS:AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Trade creditors 535 443 535 342 
Amounts owed to Group undertaking – – 155 – 
Other taxation and social security 188 249 159 229 
Other creditors 177 84 79 165 
Corporation tax 13–––
Accruals and deferred income 2,135 1,566 1,566 1,101
3,048 2,342 2,494 1,837
17. CREDITORS:AMOUNTS FALLING DUE AFTER ONE YEAR
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Other creditors 10 – 10 – 
Deferred income – – 322 403
10 – 332 403 Education Development International plc
Annual Report and Accounts
33
18. PROVISIONS FOR LIABILITIES AND CHARGES
Group and Company
Restructuring Onerous
provision leases Dilapidations T otal
£’000 £’000 £’000 £’000
At 1 October 2004 430 541 40 1,011
Amount charged to profit and loss account – 718 – 718
Utilised in the year (410) (62) – (472)
Discount rate adjustment charged to profit and loss account – 21 – 21
At 30 September 2005 20 1,218 40 1,278
On the acquisition of the 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
March 2011 and December 2017.
Additionally, as a result of the decision to restructure its UK operation so that it trades from a single site, the Group has
permanently vacated its Sidcup and Leamington Spa offices with a view to subletting them. Part of this space was let during
the year and 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.
19. FINANCIAL ASSETS AND LIABILITIES
The Group’s financial instruments comprise cash at bank, forward exchange contracts and various other items such as trade
debtors and trade creditors that arise directly from operations.The main purpose of these instruments is to provide finance
for operations.
The Group has not entered into derivative transactions, with the exception of forward foreign exchange contracts in the
normal course of trade, nor does it trade in financial instruments as a matter of policy.
The main risks arising from the Group’s financial instruments are interest risk, foreign currency exchange risk and 
liquidity risk.
The Group enters into forward exchange contracts to reduce the currency exchange risk of sales transactions denominated
in foreign currencies. Such contracts are generally entered into at the close of the financial year based on forecast foreign
currency earnings in the next 12 months.
Operations are currently funded through the Group’s cash balances arising from the flotation in April 2000 and operating cash
generated in the year.The Board’s policy is to hold positive cash balances on short-term deposit.
The Group has taken advantage of the exemption in FRS 13 in respect of short-term debtors and creditors. 34
Notes to the Financial Statements
30 September 2005
19. FINANCIAL ASSETS AND LIABILITIES (continued)
Financial assets
The only financial assets (other than short-term debtors) are cash at bank and in hand.
2005 2004
£’000 £’000
At fixed interest rates
Sterling – 350
At floating interest rates
Sterling 892 1,315
Zimbabwe Dollar 32 18
Malaysian Ringgit 214 –
Chinese Renminbi 5–
Total at floating interest rates 1,143 1,333
On which no interest is earned
Sterling 12 –
Euro 35 34
US Dollar 521
Hong Kong Dollar 428 346
Malaysian Ringgit 66 162
Singapore Dollar 117 101
Chinese Renminbi –2
Total on which no interest is earned 663 666
T otal financial assets 1,806 2,349
There are no fixed rate financial assets at 30 September 2005.At 30 September 2004, the weighted average interest rate of
the fixed interest rate financial assets was 4.065% and the weighted average period for which these are fixed was 3 months.
Financial liabilities
Other than short-term creditors and onerous lease provisions, the Group has no short-term liabilities.The onerous lease
liability of £1,218,000 (2004: £541,000) is non-interest bearing and is denominated in Sterling.The weighted average term until
maturity is 25 months (2004: 48 months).
There is no material difference between the book value and the fair value of the financial assets and liabilities above. Education Development International plc
Annual Report and Accounts
35
20. CURRENCY RISK AND EXPOSURE
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
gains and losses.
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. Such sales are recorded in the books of the Group at the contracted forward exchange
rate.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.Any gains or losses arising on the close of the forward contract
are recognised in the period in which they crystallise.
There were no forward contracts existing at the year end. In 2004, forward contracts existing at the year end amounted to
£347,000, which results in an unrecognised exchange loss of £8,000 when compared to the year end exchange rate.
All other sales of the Group are denominated in the currency of the operating unit involved.
21. SHARE CAPITAL
30 Sept 30 Sept
2005 2004
£’000 £’000
Authorised
70,000,000 ordinary shares of 1p each 700 700
Allotted and fully paid
52,355,611 (51,714,851) ordinary shares of 1p each 524 517
During the year the Company issued 140,760 ordinary shares when options under the Company’s share ownership scheme
were exercised by employees made redundant during the year.All of these options were exercised at 7.2p.
In addition, 500,000 ordinary shares were issued during the year to K Padmanathan.These shares were issued when options
were exercised, the exercise price was 9.25p.
Options over ordinary shares have been granted under the Company’s share ownership scheme for staff. Options over
5,602,040 shares, exercisable at varying dates between October 2005 and September 2015, were outstanding at 30 September
2005.The options are exercisable at prices ranging from 7.2p to 72.5p.
The movements in options over ordinary shares during the year are summarised below.
Number
At 1 October 2004 4,593,784
Options granted 2,200,000
Options exercised (621,969)
Options lapsed (373,697)
Options waived (196,078)
At 30 September 2005 5,602,040 36
Notes to the Financial Statements
30 September 2005
21. SHARE CAPITAL (continued)
At 30 September 2005 the following share options had been granted to Directors over the Company’s shares:
Number of
options at Date from Date of issue
30 September Exercise which Expiry Share price (if issued
2005 price (p) exercisable date performance criteria in the year)
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
100,000 9.25 12/1/08 11/1/14 13
1
/2p + RPI + 20% per annum
100,000 9.25 12/1/08 11/1/14 13
1
/2p + RPI + 20% per annum
150,000 9.25 12/1/09 11/1/14 13
1
/2p + RPI + 6% per annum
100,000 12.50 30/9/08 29/9/15 12
1
/2p + RPI + 6% per annum 30/9/05
50,000 12.50 30/9/08 29/9/15 12
1
/2p + RPI + 20% per annum 30/9/05
250,000 12.50 30/9/09 29/9/15 12
1
/2p + RPI + 6% per annum 30/9/05
100,000 12.50 30/9/09 29/9/15 12
1
/2p + RPI + 20% per annum 30/9/05
250,000 12.50 30/9/10 29/9/15 12
1
/2p + RPI + 6% per annum 30/9/05
100,000 12.50 30/9/10 29/9/15 12
1
/2p + RPI + 20% per annum 30/9/05
100,000 12.50 30/9/11 29/9/15 12
1
/2p + RPI + 6% per annum 30/9/05
50,000 12.50 30/9/11 29/9/15 12
1
/2p + RPI + 20% per annum 30/9/05
350,000 12.50 30/9/12 29/9/15 12
1
/2p + RPI + 6% per annum 30/9/05
150,000 12.50 30/9/12 29/9/15 12
1
/2p + RPI + 20% per annum 30/9/05
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 21/4/05
75,000 14.25 21/11/08 21/4/15 14
1
/4p + RPI + 20% per annum 21/4/05
75,000 14.25 21/11/09 21/4/15 14
1
/4p + RPI + 6% per annum 21/4/05
75,000 14.25 21/11/09 21/4/15 14
1
/4p + RPI + 20% per annum 21/4/05
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
On 31 December 2004 N M Snook agreed to waive all rights over 196,078 share options issued under the 2000 Unapproved
Share Option Scheme at an exercise price of 255p.As a result of this waiver the share price performance criteria over the
350,000 options, exercisable on 20 December 2005 at 200p, and 200,000 options, exercisable on 20 December 2007 at 400p,
were amended to an earliest exercise date of 20 December 2010 and 40p + RPI + 20% per annum and to an earliest exercise
date of 20 December 2011 and 50p + RPI + 20% per annum, respectively.
No other Directors’ share options have lapsed during the year. Education Development International plc
Annual Report and Accounts
37
22. RESERVES
Share Profit
premium Special Own and loss
account reserve shares held account
£’000 £’000 £’000 £’000
Group
At 1 October 2004 12,591 – – (9,879)
Loss for the year – – – (193)
Currency translation differences – – – (3)
Premium arising on issue of share capital 49–––
Transfer on capital restructure (9,841) 212 – 9,629
Purchase of own shares – – (13) –
Reserves excluding current period pension deficit 2,799 212 (13) (446)
Current period net pension deficit adjustment – – – (61)
At 30 September 2005 2,799 212 (13) (507)
Company
At 1 October 2004 12,591 – – (9,841)
Loss for the year – – – (325)
Premium arising on issue of share capital 49–––
Transfer on capital restructure (9,841) 212 – 9,629
Purchase of own shares – – (13) –
Reserves excluding current period pension deficit 2,799 212 (13) (537)
Current period net pension deficit adjustment – – – (61)
At 30 September 2005 2,799 212 (13) (598)
The loss attributable to the Company for the year was £325,000 after taxation (2004: profit of £399,000).
In accordance with the exemption allowed by s230 of the Companies Act 1985 the Company has not presented its own profit
and loss account.
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 1 October 2004 to the date the court order became effective.
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. 100,000 ordinary shares with a nominal value of 1p each have been purchased in total on the
open market at a cost of £13,500 (2004: £Nil). 38
Notes to the Financial Statements
30 September 2005
23. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS’ FUNDS
30 Sept 30 Sept
2005 2004
£’000 £’000
Group
Opening equity shareholders’ funds 3,229 2,190
Total recognised gains and losses for the year (257) 767
Net proceeds of share issues 43 272
Closing equity shareholders’ funds 3,015 3,229
Company
Opening equity shareholders’ funds 3,267 2,190
Total recognised gains and losses for the year (386) 805
Net proceeds of share issues 43 272
Closing equity shareholders’ funds 2,924 3,267
24. MINORITY INTERESTS
30 Sept 30 Sept
2005 2004
£’000 £’000
Opening minority interests 190 243
Profit/(loss) on ordinary activities after taxation 31 (53)
Closing minority interests 221 190
25. FINANCIAL COMMITMENTS
Capital commitments
The Company and Group had no capital commitments at 30 September 2005 (2004: £nil).
Operating lease commitments
The payments which the Group and Company is committed to make in the next year under operating leases are as follows:
Group Company
30 Sept 30 Sept 30 Sept 30 Sept
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Land and buildings
Leases which expire 
within one year 11 10 – –
in two to five years 148 53 83 –
beyond five years 429 298 429 298
588 361 512 298
Other leases — which expire within one year –8––
588 369 512 298
The Group entered into a number of forward exchange contracts during the year.At the balance sheet date the value of such
contracts still outstanding amounted to £Nil (2004: £347,000). Education Development International plc
Annual Report and Accounts
39
26. PENSION SCHEMES
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 the LCCIEB who had been members of the defined benefit section
of the London Chamber of Commerce and Industry scheme (in which the 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.
The profit and loss charge relating to the defined contribution scheme was £187,000 (2004: £155,000).
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 2005.The scheme assets are stated at their market
value at 30 September 2005.
Assumptions
The major assumptions used by the actuary in assessing scheme liabilities on a FRS 17 basis are set out below.
30 Sept 30 Sept 30 Sept
2005 2004 2003
% pa % pa % pa
Rate of increase in salaries 3.25 3.25 3.75
Rate of increase in pensions payment
Pre-1 March 2001 service 5.00 5.00 5.00
Post-1 March 2001 service 2.75 3.00 2.75
Discount rate 5.00 5.50 5.25
Inflation assumption 2.75 3.00 2.75
The assets in the scheme and the expected rate of return were:
30 Sept 2005 30 Sept 2004 30 Sept 2003
Long-term Long-term Long-term
rate of rate of rate of
return £’000 return £’000 return £’000
Equities 7.00% 3,975 7.00% 3,291 6.75% 4,989
Bonds 5.00% 3,599 5.50% 3,252 5.25% 685
Current assets 5.00% – 7.00% – 6.75% 179
Cash 4.00% 32 4.00% – 4.00% 306
T otal fair value of invested assets 7,606 6,543 6,159
Present value of scheme liabilities (9,420) (8,324) (8,499)
Deficit in the scheme (1,814) (1,781) (2,340)
Related deferred tax asset 545 535 702
Net pension liability (1,269) (1,246) (1,638) 40
Notes to the Financial Statements
30 September 2005
26. PENSION SCHEMES (continued)
Analysis of the amount charged to operating profit/(loss)
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Current service cost – 40
T otal operating cost –40
Analysis of the amount charged to interest
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Interest cost 451 443
Less expected return on assets (404) (394)
T otal financing charges 47 49
Analysis of the amount recognised in the statement of total recognised gains and losses
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Actual return less expected return on pension scheme assets 797 89
Changes in assumptions underlying the present value of the scheme liabilities (883) 520
Actuarial (loss)/gain recognised in statement of total recognised gains and losses (86) 609
Movement in scheme deficit during the year
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Deficit in scheme at start of year (1,781) (2,340)
Movement in year
Current service cost – (40)
Contributions 100 39
Other finance income (47) (49)
Actuarial (loss)/gain (86) 609
Deficit in scheme at end of year (1,814) (1,781)
The Board has negotiated with the Trustees of the scheme for the Group to pay contributions of £100,000 per annum for the
next 10 years.Additionally, the Group paid the scheme running expenses of approximately £33,000 during the year. Education Development International plc
Annual Report and Accounts
41
26. PENSION SCHEMES (continued)
Historical gains and losses
Years ended
30 Sept 30 Sept
2005 2004
Difference between expected and actual return on scheme assets
Amount (£’000) 797 88
Percentage of scheme assets 10.5% 1.3%
Experience gains and losses on scheme liabilities
Amount (£’000) ––
Percentage of present value of scheme liabilities 0.0% 0.0%
T otal amount recognised in statement of total recognised gains and losses
Amount (£’000) (86) 609
Percentage of present value of scheme liabilities (0.9)% 7.3%
27. RECONCILIATION OF OPERATING (LOSS)/PROFIT TO NET CASH INFLOW 
FROM OPERATING ACTIVITIES
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Operating profit, before exceptional operating items and amortisation of goodwill 816 741
Amortisation of goodwill (216) (188)
Exceptional operating items (718) (430)
Operating (loss)/profit (118) 123
Depreciation of tangible fixed assets 167 113 
Loss/(profit) on the sale of tangible fixed assets 6 (9) 
Amortisation of goodwill 216 188 
Release of deferred licence income – (61)
Working capital movements
Stocks (27) 17
Debtors (790) (258)
Creditors 785 1,079
Net cash inflow from operating activities 239 1,192 42
Notes to the Financial Statements
30 September 2005
28. RETURNS ON INVESTMENT AND SERVICING OF FINANCE
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
Interest received 44 47
29. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Years ended
30 Sept 30 Sept
2005 2004
£’000 £’000
(Decrease)/increase in cash (539) 1,016
Exchange rate effects (4) 3
Opening net funds 2,349 1,330
Closing net funds 1,806 2,349 Education Development International plc
Annual Report and Accounts
43
Five Year Financial Review
2003
2005 2004 As restated 2002 2001
(12 months) (12 months) (18 months) (12 months) (14 months)
£’000 £’000 £’000 £’000 £’000
Turnover 13,185 10,962 8,573 589 97 
Operating (loss)/profit
Before exceptional operating costs, impairment
and amortisation of goodwill 816 741 (1,424) (2,271) (4,507)
Impairment and amortisation of goodwill (216) (188) (2,759) – (150)
Exceptional operating costs (718) (430) (600) – –
Operating (loss)/profit (118) 123 (4,783) (2,271) (4,657)
(Loss)/profit on ordinary activities after taxation (162) 307 (4,473) (2,072) (4,271)
(Loss)/earnings per share
Basic and diluted (0.4)p 0.7p (12.1)p (8.5)p (20.7)p
Excluding impairment and amortisation of goodwill
and exceptional operating costs and deferred taxation 1.5p 1.5p (3.1)p (8.5)p (20.0)p
Intangible assets 3,793 3,754 3,500 – –
Tangible assets and investments 681 171 255 194 338 
Net cash 1,806 2,349 1,330 3,403 5,745 
Stocks, debtors less creditors (487) (598) (529) (346) (760)
Creditors due after more than one year and provisions (1,288) (1,011) (728) – – 
Net assets excluding pension liabilities 4,505 4,665 3,828 3,251 5,323
Defined benefit pension liabilities net of
deferred taxation (1,269) (1,246) (1,638) — —
T otal net assets 3,236 3,419 2,190 3,251 5,323
FRS 17 was adopted during the year ended 30 September 2004; this required the results for 2003 to be restated.
The first FRS 17 valuation was made on 20 December 2002, on the acquisition of the trade and assets of the London Chamber of
Commerce and Industry Examinations Board. 44
Notice of 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, CV3 4PE on
Thursday 26 January 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 2005.
2. To reappoint Richard Price as a Director of the Company
who shall retire in accordance with the Company’s
articles of association.
3. To reappoint Neal Gossage as a Director of the
Company who shall retire in accordance with the
Company’s articles of association.
4. 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:
5. 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
£176,444 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 Resolution 6 as a special
resolution of the Company provided that Resolution 5 has
been approved.
6. THAT, subject to the passing of the resolution proposed
at item 5 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 the resolution referred to at
item 5 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 (i) above
up to an aggregate nominal amount of £26,178.
Dated 23 November 2005
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
45
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 24 January 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. 46 Education Development International plc
Annual Report and Accounts
47
Form of Proxy for use by holders of ordinary shares at the
Annual General Meeting of the Company convened for 26 January 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 
26 January 2006 at 10 am.Your proxy will vote on your behalf on the
Ordinary Resolutions referred to in the Notice of Annual General
Meeting dated 23 November 2005 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,
BE3 4BR by 10 am on 24 January 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 am
on 24 January 2006 or, if the meeting is adjourned, 10 am 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 2005.
2 To reappoint Richard Price as a Director of the Company who shall retire in accordance with the Company’s
articles of association.
3 To reappoint Neal Gossage as a Director of the Company who shall retire in accordance with the Company’s
articles of association.
4 T o reappoint RSM Robson Rhodes LLP as auditors and to authorise the Directors to determine their remuneration.
5 To hereby authorise the Directors pursuant to section 80 of the Companies Act 1985 (the “Act”) generally
and unconditionally 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 £176,444 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.
6 THAT, subject to the passing of Resolution 5 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 5 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 £26,178.
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
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and tuck in flap opposite
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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