Education Development International plc Background Brief, 2008 Interim Results and Future Developments Nigel Snook, Chie

1. Education Development International plc • Background Brief, 2008 Interim Results and Future Developments • Nigel Snook, Chief Executive • Paul Bird, Finance Director 5 June 2008

2. Background Brief Introduction Sector activities Market players Corporate development Organisation structure Business segments Revenue sources Financial trends 2008 Interims (Page 11) Highlights Acquisitions and disposals Segmental performance Surplus leases Income and margins Cashflow Balance sheet Contents Future Developments (Page 19) • Drivers for growth • Operational investment • Business development strategy • Acquisition targets • Prospects • Shareholder support

3. Background Brief

4. Introduction • We are an educational quality assurance body. • EDI is accredited by the Government to award qualifications and is a leading provider of: • - UK vocational qualifications and assessments (Apprenticeships, Diplomas, accredited employers’ programmes and national curriculum based tests) • - International business and English language qualifications (branded London Chamber • of Commerce and Industry) • - Specialist assessment and administration services • Extensive use is made of IT-based operating systems and online delivery platforms.

5. Sector Activities • The Education Services Pyramid Assessment and Examinations Learning Materials Content Publishing Education and Training Programmes Delivery Specialist Administration, Platforms and Distribution Services

6. Market Players • Demand Side • Schools, further education colleges, private training companies, universities, professional bodies, employers, individuals and other awarding bodies. • Supply Side • Governments, public agencies, awarding bodies, professional bodies, universities, publishers, software companies and distribution/outsourcing companies. • Competition • In the UK; Edexcel (Pearson), OCR (Cambridge University), AQA, City and Guilds of London Institute, 100+ specialist awarding and professional bodies, and unapproved bodies. • In overseas markets; national qualifications and UK/US/Australian service providers. • Software and systems development companies.

7. Corporate Development • GOAL plc –AIM float in April 2000. • EDI formed – Merger in December 2002 of GOAL plc and the London Chamber of Commerce and Industry Examinations Board. • Bolt-on acquisitions – Acquisition of four smaller awarding bodies/product lines between October 2004 and October 2006. • Organisation consolidation – Move to single main site and systems modernisation programme during 2005/06 at cost of £1.75m. • eNVQ Limited –Acquisition in May 2007 of innovative ‘e-portfolio’ system for training programme administration. • Fusion Media Networks Limited –Holding increased to 75% in July 2007 of internet service provider (ISP) (eNVQ owned 50% of FMN). ‘Put and call’ contract in place over minority holding. • ASET Group Limited –Acquisition on 19 November 2007 of accredited UK vocational awarding body. Main integration programme completed 31 March 2008. • Educational Resources Pte Limited, Singapore –Disposal on 4 January 2008 of majority stake to long-term local partner, AEC Education plc. New long-term agency agreement completed.

8. Organisation Structure

9. Business Segments • UK Qualifications and Assessment Services (56% of turnover) • 350 nationally accredited vocational qualifications. • 600 specialist awards for employers and training providers. • 1,000+ registered centres. • 140,000+ candidate certifications per annum. • 12% market share for programme funded vocational qualifications in key sectors. • 625 school customers for online national curriculum tests system. • International Qualifications (22% of turnover) • 90 examinations branded London Chamber of Commerce and Industry. • 4,900 registered centres in 120+ countries. • 250,000+ entries per annum. • Support and Internet Services (22% of turnover) • Online testing platforms, qualifications and learner administration systems, printing, logistics and internet service provision (Fusion). • 12 contracts including ACCA, CIMA, CIEH, OCR and RHS.

10. Revenue Sources • Centre registration fees : £250 - £450 per annum. • Candidate registration : £25 - £85 per candidate. • Certification : £5 - £100 per candidate. • Accredited programmes : up to £5,000 initial/annual audit, plus up to £10 per candidate. • Learner administration (eNVQ) : £25 - £100 per candidate. • Support materials : £10 - £25 per book. • Schools’ on-line assessments : from £299 per subject to £5,000 per school per annum. • Software licence fees : up to £6,000 per annum, plus £2 - £8.50 per candidate. • Contract management fees : up to £30,000, plus % of contract value or per candidate charge. • Fusion ISP supply contracts : monthly fixed rate, £250 - £500 per customer. • Development projects : priced on one-off basis.

11. Financial Trends

12. Interim Results : 31 March 2008

13. Highlights • Results reflect the positive impact of 17% organic growth, a revenue contribution of £1.55m from the acquisitions made over the past year and continued improvements in operational efficiency. * Profit on ordinary activities before taxation adjusted for movement in the onerous lease provision and amortisation charge on acquired intangible assets • Cash inflow from operating activities of £1.16m (2007 : £0.48m). • Acquisition of ASET Group Limited on 19 November 2007 and successful integration of ASET operations completed • by 31 March 2008. • Disposal of 50.4% shareholding in Educational Resources Pte Ltd on 4 January 2008. • Management and staff re-organisation to reflect the impact of acquisitions and disposals. • Appointment of new Finance Director. • Achievement of ISO 9001/2000 accreditation on 12 March 2008. • Interim dividend of 0.12p per share declared (2007 0.1p).

14. Acquisitions and Disposals • Acquisition of ASET Limited : 19 November 2007 • Accredited UK awarding body – sound strategic fit. • 2006/07 revenue £2.23m – mostly from further education colleges. • Consideration, up to £2.9m: • - £2.5m on completion including £800k in shares (2,125m – 3.86% dilution) • - £400k of net assets acquired • - £200k payment in April 2008 on completion of administration handover • - Further payment of £200k in August 2008 if sales target of £2.65m achieved • - Reorganisation costs of £88k through income statement (17 redundancies). • Disposal of majority stake in Educational Resources Pte Limited : 4 January 2008 • Sale of 50.4% shareholding to long-term local partner, AEC Education plc. • Loss on disposal write off £490k after consideration of 2m AEC shares (current market value £270k). • Payment for new open-ended agency agreement, £450k over three years. • Agency manager appointed in Kuala Lumpur. • Put and Call Option over minority holding in Fusion Media Networks : 14 December 2007 • Contract in place for review in 2012 to purchase 25% minority holding based on an independent valuation. • Deferred consideration for eNVQ Limited • Contractual payment of £375k due on 31 May 2008 plus ‘earn out’ consideration based on 75% incremental revenue in first year of EDI ownership.

15. Segmental Performance • UK Qualifications and Assessment Services • Sales up 51% to £5.39m: • - ASET contributes £890k and eNVQ £307k • - Like for like sales growth 17% • Extended products range, new customers, average value per customer. • Positive response to schools’ services re-packaging and range. • £350k NVQ certification levy collected for QCA drops out next year, no bottom line impact. • International Qualifications • Sales up 11% to £2.16m. (Dollar/Euro exchange rate movements net off to £10k gain). • Strong trading in South East Asia (Hong Kong) and Germany. • Strengthened management capacity and focus on agent co-ordination. • Sales biased to second half, positive indications. • Support and Internet Services • Sales up 53% to £1.31m: • - Fusion contributes £355k • - Like for like sales growth of 26% • Long-term contract worth £900k ends in September after five years (mid margin administration). • New long-term contracts agreed with ACCA, OCR and RHS (high margin software).

16. Surplus Leases • Athena House, Sidcup (former LCCI Head Office). Break clause exercised with effect from 31 December 2007 and dilapidations settled. • Marlowe House, Sidcup (former LCCI offices). Arrangements made on behalf of LCCI Trust to re-let vacant space to end of lease as EDI acted as guarantor. • ASET office, York. Surrender negotiated with effect from 31 March 2008. • ASET office, Macclesfield. Lease expires November 2009. • Livingston (i-assess) and Southend-on-Sea (Fusion) offices are on short-term managed facility contracts. • Surplus leases provision will be fully utilised on completion of Marlowe House arrangement.

17. Income and Margins

18. Cashflow

19. Balance Sheet

20. Future Developments

21. Drivers for Growth • Strength of the underlying EDI business, supported by positive investment strategy and acquisitions programme. • Growing global investment by governments, businesses, families and individuals in personal, vocational and English language skills development. • Accredited awarding body status, including for the new Diplomas. • Winning market share with UK further education colleges offers significant opportunities. • Partnerships to accredit employer training programmes. • Increasing acceptance of screen based/online education services.

22. Operational Investment • Lock in quality of service • - ISO 9001/2000 accreditation achieved in March 2008 • - Committed to Investor in People accreditation • Profile raising • - Appointment of marketing consultant and communications agency • - Re-branding to emphasise scale of EDI operations • Building sales capacity • - Strengthen sales management and appointment of further sales staff • - Investment in trade promotion • Comprehensive productdevelopment pipeline • - In-house programme, acquisitions and participant in Government programmes (new Diplomas) • Continuing organisation development programme • - Staff training and development, international agent support and optimising UK • associates network • - Ongoing investment in operating systems

23. Business Development Strategy

24. Acquisition Targets • Service and related sectors qualifications awarding and assessment services. • Publishing of related education and training support materials. • Software for related education and training administration applications. • Agencies and delivery networks in international markets. • Continuing professional developmentprogramme provision for vocational education and training practitioners. • ‘Bolt-on’ internet service providers.

25. Prospects • Committed and experienced Board and management team. • Continuing benefit from infrastructure investment, organic growth and acquisitions. • Focused on strengthening business development and sales capabilities, continuous improvement of service levels and extending the product range. • Constantly reviewing acquisition opportunities to broaden range and scope of services. • Continuing return to investors through share price growth and progressive dividend policy.

26. Shareholder Support • 12 month share price uplift 75% at 4 June - market capitalisation £24.5m. • Total voting rights 57,512,291 at 31 January 2008. • Total share options under contract 4,411,355 (including SAYE options).