RNS Number:9515T
Creative Education Corp Plc
07 January 2004



THE CREATIVE EDUCATION CORPORATION PLC ("CEC" or "The Company")

(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)

FINAL RESULTS
FOR THE YEAR ENDED 31 AUGUST 2003


  The financial results for the year to 31 August 2003 show a loss before
  taxation of #576,795 (2002 - #35,180) equivalent to a loss per share of
  0.49p. At the year end the company's net assets were #3,766,298. In what
  is effectively the first full year of trading this is a creditable
  performance and is in line with the director's expectations.

  The financial year has been a momentous one for your company with the
  listing on the Alternative Investment Market on 7 April, together with the
  acquisition of Primary Steps Limited. During the year Creative Education
  has continued to expand and put in place the financial and operating
  structures to form the foundation of a significant pre-school nursery
  education, with an operating format which can be applied to a number of
  locations throughout the world.
  As you will see since the year end your company has continued to expand
  the number of nurseries in the group and has also acquired an 18.5%
  interest in Academy Childcare Group Plc.

  Current Trading

  Your company currently operates 11 nurseries and one pre-prep school.
  Occupancy levels have risen steadily from an overall average of 56% in
  March 2003 to 68% in November 2003 and further growth is expected through
  2004.

  Your company is very proud to report that the two nurseries which received
  OFSTED inspections this year both achieved the top rating. It is
  particularly pleasing that these nurseries were new openings and confirms
  the level of excellence being achieved in all areas. The Watford nursery
  also received a "Quality in Herts" award.

  Very high standards have been reached in all nurseries and we look forward
  to maintaining these standards throughout the next year.

  The objective of your company is to create one of the leading UK
  pre-school nursery businesses, which provides a high quality of service to
  children and parents and achieves sustainable profit growth by efficient
  management and tight financial control. To achieve these goals, your
  company will continue to invest in the training and development of its
  staff and the individual nurseries, while retaining an efficient and lean
  head office operation.

  Finally I would like to thank David Alexander and his team for their
  efforts over the past year, which have led to your company achieving the
  progress they have made to date.

  C Phillips
  Chairman
  Dated: 12 December 2002


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2003
----------------------------------------------------

  The financial results for the year to 31 August 2003 show a loss before
  taxation of #576,795 (2002 - #35,180) equivalent to a loss per share of
  0.49p. At the year end the company's net assets were #3,766,298. In what
  is effectively the first full year of trading this is a creditable
  performance and is in line with the director's expectations.

  The financial year has been a momentous one for your company with the
  listing on the Alternative Investment Market on 7 April, together with the
  acquisition of Primary Steps Limited. During the year Creative Education
  has continued to expand and put in place the financial and operating
  structures to form the foundation of a significant pre-school nursery
  education, with an operating format which can be applied to a number of
  locations throughout the world.
  As you will see since the year end your company has continued to expand
  the number of nurseries in the group and has also acquired an 18.5%
  interest in Academy Childcare Group Plc.

  Current Trading

  Your company currently operates 11 nurseries and one pre-prep school.
  Occupancy levels have risen steadily from an overall average of 56% in
  March 2003 to 68% in November 2003 and further growth is expected through
  2004.

  Your company is very proud to report that the two nurseries which received
  OFSTED inspections this year both achieved the top rating. It is
  particularly pleasing that these nurseries were new openings and confirms
  the level of excellence being achieved in all areas. The Watford nursery
  also received a "Quality in Herts" award.

  Very high standards have been reached in all nurseries and we look forward
  to maintaining these standards throughout the next year.

  The objective of your company is to create one of the leading UK
  pre-school nursery businesses, which provides a high quality of service to
  children and parents and achieves sustainable profit growth by efficient
  management and tight financial control. To achieve these goals, your
  company will continue to invest in the training and development of its
  staff and the individual nurseries, while retaining an efficient and lean
  head office operation.

  Finally I would like to thank David Alexander and his team for their
  efforts over the past year, which have led to your company achieving the
  progress they have made to date.

  C Phillips
  Chairman
  Dated: 12 December 2002


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

The directors present their report and group accounts for the year ended 31
August 2003.

Principal activities
The principal activity of the company is that of the provision of pre-school
nursery education.

Change of the name of the company
On 9 April 2003 the company changed its name from The Creative Educational
Corporation Plc to The Creative
Education Corporation Plc.
Education Corporation Plc.

Review of the development of the business
A full review of the development of the business is contained in the Chairman's
Report.

Results and dividends
The group loss for the year after taxation amounted to #576,795.

The directors do not recommend payment of an ordinary dividend.

Post balance sheet events
Share issues;

On 9 September 2003 the company issued 7,000,000 Ordinary Shares of 1 pence at 5
pence per share.

On 25 September 2003 the company issued 8,100,000 Ordinary Shares of 1 pence at
5 pence per share.

On 3 October 2003 the company issued 5,300,000 Ordinary Shares of 1 pence at 5
pence per share.

On 18 November 2003 the company issued 12,300,000 Ordinary Shares of 1 pence for
5 pence per share.

On 1 December 2003, the company issued 5,043,850 Ordinary Shares of 1 pence at 5
pence per share.

The purpose of the above issues was to raise funds for acquisitions and the
on-going activities of the entity

Conversion of loans;
On 25 September 2003 J Baker Consultancy, a company in which J Baker (a
director) has a controlling interest, converted a loan of #130,000 included
within Directors' current accounts at the year end, to 2,600,000 Ordinary Shares
of 1 pence at a conversion price of 5 pence per share.
On 25 September 2003, a loan of #205,000 included within Directors' current
accounts at the year end from Shortlands Investments Limited, a company in which
L Davis (a director) has a controlling interest, was converted to 4,100,000
Ordinary Shares of 1 pence at a conversion price of 5 pence per share.

Acquisitions;
The following 6 acquisitions have taken place since the year end;

Squirrels Day Nursery, Bedford
Gosford Babies Nursery, Ilford, Essex
Gosford House Nursery, Ilford, Essex
Gosford House Pre- preparatory School, Ilford, Essex
Clarence House Nursery, Ilford, Essex
Academy Childcare Group Plc - 18.5% holding.




THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS
--------------------------------------------------
Directors and their interests

The directors at 31 August 2003 and their beneficial interests in the shares of
the company and other group companies were:
                                           Ordinary Shares
                                               of 1p each
                                           31 August 2003          1 September
                                                                          2002
D Alexander                                    14,000,000                    -
J Baker                                        29,250,230                    -
L Davis                                        26,941,468                    -
R Harris                                        2,600,000              500,000
R Patel                                           500,000              500,000
C Phillips                                              -                    -
J Stirling                                      4,200,000                    -

C Phillips was appointed as a director on 5 September 2002. R Patel was
appointed as a director on 16 October 2002.
D Alexander, J Baker, L Davis and J Stirling were all appointed to the board on
7 April 2003.

In addition subsequent to the year end, on 29 September 2003, G Lumsdon was
appointed as a director.

Creditor payment policy
The company's current policy concerning the payment of trade creditors is to:

a) settle the terms of the payment with suppliers when agreeing the terms of
each transaction.
b) ensure that suppliers are made aware of the terms of payment by inclusion of
the relevant terms in contracts; and
c) pay in accordance with the company's contractual and other legal
obligations.
Trade creditors at the year-end relate to sundry administrative overheads and
disclosure of the number of days' purchases represented by the year end
creditors is not meaningful, due to the nature of the company's activities.
Auditors
On the 20 August 2003 Fisher Corporate Plc resigned as auditors to the company
and H W Fisher & Company were appointed in their place. A resolution proposing
their appointment will be put to the numbers at the next Annual General
Meeting.
By order of the board

R Patel

Company Secretary

Dated 12 December 2003


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS
--------------------------------------------------

Company law requires the directors to prepare accounts for each financial year
which give a true and fair view of the state of affairs of the group and
company of the profit or loss of the group for that period.

In preparing those accounts, the directors are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and estimates that are reasonable and prudent;

- state whether applicable accounting standards have been followed, subject to
any material departures disclosed and explained in the accounts;

- prepare the accounts on the going concern basis unless it is inappropriate
to presume that the group will continue in business.

The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
group and to enable them to ensure that the accounts 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.

THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS
--------------------------------------------------

We have audited the accounts of The Creative Education Corporation PLC for the
year ended 31 August 2003 set out on pages 6 to 18. These accounts have been
prepared under the historical cost convention and the accounting policies set
out on page 9.
This report is made solely to the company's members, 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 members those matters we are required
to state to them in an auditor's 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 members as a body, for our
audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors
As described on page 4 the company's directors are responsible for the
preparation of the accounts in accordance with applicable law and United
Kingdom Accounting Standards.
Our responsibility is to audit the accounts in accordance with relevant legal
and regulatory requirements and United Kingdom Auditing Standards.
We report to you our opinion as to whether the accounts give a true and fair
view and are 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 accounts, 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 regarding directors' remuneration
and transactions with the company is not disclosed.
We read the Directors' Report and consider the implications for our report if
we become aware of any apparent misstatements within it.
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
accounts. It also includes an assessment of the significant estimates and
judgments made by the directors in the preparation of the accounts, and of
whether the accounting policies are appropriate to the company's and 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 accounts 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 accounts.
Opinion
In our opinion the accounts give a true and fair view of the state of the
company's and the group's affairs as at 31 August 2003 and of the group's loss
for the year then ended and have been properly prepared in accordance with the
Companies Act 1985.

H W Fisher & Company
Chartered Accountants
Registered Auditor
Acre House
11-15 William Road
London NW1 3ER
United Kingdom
Dated: 12 December 2003


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

                                                    2003                   2002
                                  Notes                #                      #

Turnover                                         318,042                      -

Administrative expenses                         (894,273)               (35,180)

Operating loss                        3         (576,231)               (35,180)

Other income                                           -                      -
Interest payable and similar          6             (564)                     -
charges

Loss on ordinary activities                     (576,795)               (35,180)
before taxation

Tax on loss on ordinary               7                -                      -
activities

Loss on ordinary activities after               (576,795)               (35,180)
taxation

Accumulated loss brought forward                 (35,180)                     -

Accumulated loss carried forward                (611,975)               (35,180)

Loss per share                        9
- Basic                                         (0.49) p               (0.20) p

- Diluted                                       (0.49) p               (0.20) p

The profit and loss account has been prepared on the basis that all operations
are continuing operations.

There are no recognised gains and losses other than those passing through the
profit and loss account.


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
BALANCE SHEETS
AS AT 31 AUGUST 2003
----------------------------------------------------

                                             Group                 Company
                                            2003      2002         2003      2002
                              Notes            #         #            #         #
Fixed assets
Intangible assets                10    4,249,097         -    4,249,097         -
Tangible assets                  11      454,807         -      454,807         -

                                       4,703,904         -    4,703,904         -

Current assets
Debtors                          13       74,268   100,000       74,268   100,000
Cash at bank and in hand                  42,029   144,170       42,029   144,170

                                         116,297   244,170      116,297   244,170
Creditors: amounts
falling due within one
year                             14   (1,053,903)        -   (1,053,903)        -

Net current assets                      (937,606)  244,170     (937,606)  244,170

Total assets less current              3,766,298   244,170    3,766,298   244,170
liabilities

Capital and reserves
Called up share capital          15    1,171,766   180,000    1,171,766   180,000
Share premium account            16      406,507    99,350      406,507    99,350
Other reserves                   16    2,800,000         -    2,800,000         -
Profit and loss account                 (611,975)  (35,180)    (611,975)  (35,180)

Shareholders' funds - equity     17    3,766,298   244,170    3,766,298   244,170
interests

The accounts were approved by the board on 12 December 2003

D Alexander                                        R Patel
Director                                           Director

THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

                                                   2003                 2002
                            Notes                     #                    #

Net cash outflow from          18              (615,970)            (135,180)
operating activities

Returns on investments and servicing of finance
Interest paid                           (564)                   -

Net cash outflow from returns on
investments and servicing of finance               (564)                   -

Capital expenditure and financial investment
Payments to acquire                 (137,113)                   -
tangible fixed assets
Payments to acquire                  (52,090)                   -
subsidiary
Net overdrafts acquired with        (156,583)                   -
subsidiary
Receipts from sales of                 1,864                    -
tangible fixed assets

Net cash outflow from capital expenditure
and financial investment                       (343,922)                   -

Net cash outflow before financing              (960,456)            (135,180)

Financing
Issue of ordinary share capital      770,000              280,000
Cost of share issue                 (171,077)                (650)

Net cash inflow from                            598,923              279,350
financing

(Decrease)/increase in cash    19              (361,533)             144,170


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

   1   Accounting policies

1 .1   Basis of preparation
       The accounts have been prepared under the historical cost convention and on a
       going concern basis.

1 .2   Compliance with accounting standards
       The accounts have been prepared in accordance with applicable accounting
       standards.

1 .3   Basis of consolidation
       The consolidated profit and loss account and balance sheet include the
       accounts of the company and of its subsidiary undertaking, Primary Steps
       Limited, made up to 31 August 2003. The results of subsidiaries sold or
       acquired are included in the profit and loss account up to, or from, the date
       control passes. Intra-group sales and profits are eliminated fully on
       consolidation.

1 .4   Turnover
       Turnover represents the invoiced value of services provided net of VAT.

1 .5   Goodwill
       Goodwill is amortised over its useful economic life currently estimated to be
       20 years.

1 .6   Tangible fixed assets and depreciation
       Tangible fixed assets are stated at cost less depreciation. Depreciation is
       provided on all tangible fixed assets at rates calculated to write off the
       cost less estimated residual value of each asset over its expected useful
       life, as follows:

       Leasehold property               Over the period of the lease
       Fixtures, fittings & equipment   20% - 33.3% straight line

1 .7   Leasing
       Rental payments under operating leases are charged to the profit and loss
       account on a straight line basis over the period of the lease.

1 .8   Deferred taxation
       Deferred tax is provided in full on timing differences which result in an
       obligation at the balance sheet date to pay more tax, or a right to pay less
       tax, at a future date, at rates expected to apply when they crystallise based
       on current tax rates and law. Timing differences arise from the inclusion of
       items of income and expenditure in taxation computations in periods different
       from those in which they are included in the accounts. Deferred tax is not
       provided on timing differences arising from the revaluation of fixed assets
       where there is no commitment to sell the assets. Deferred tax assets are
       recognised to the extent that it is regarded as more likely than not that
       they will be recovered. Deferred tax assets and liabilities are not
       discounted.

 2   Turnover

     The total turnover of the group for the year has been derived from its
     principal activity wholly undertaken in the United Kingdom.


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

3   Operating loss                                              2003          2002
                                                                   #             #
    Operating loss is stated after charging:
    Amortisation of intangible assets                         90,406             -
    Depreciation of owned tangible assets                     21,263             -
    Operating lease rentals                                  200,357             -
    Auditors' remuneration (company #5,000 ; 2002: #- )       10,000             -
    Remuneration of auditors for non-audit work               28,593             -

4   Directors' emoluments                                       2003          2002
                                                                   #             #

    Aggregate emoluments                                      62,458             -


5   Employees

    Number of employees
    The average weekly number of employees was:
                                                                2003          2002
                                                              Number        Number

    Administration                                                60             -

    Employment costs
                                                                   #             #
    Wages and salaries                                       346,379             -
    Social security costs                                     30,671             -

                                                             377,050             -

6   Interest payable and similar charges                        2003          2002
                                                                   #             #

    Interest payable on:
    Bank loans and overdrafts                                    564             -



THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

7   Tax on loss on ordinary activities                          2003          2002
                                                                   #             #

    Factors affecting the tax charge for the year
    Loss on ordinary activities before taxation             (576,795)      (35,180)

    Loss on ordinary activities before taxation multiplied  (109,591)       (7,036)
    by standard rate of UK corporation tax of 19.00% (2002
    : 20.00%)
    Expenses not deductible for tax purposes                   4,242             -
    Depreciation in period in excess of capital                  737             -
    allowances
    Movement in tax losses                                   104,612         7,036

    Current tax charge                                             -             -

8   Loss for the financial year

    As permitted by section 230 of the Companies Act 1985, the holding company's
    profit and loss account has not been included in these accounts. The loss for
    the financial year is made up as follows:
                                                                2003          2002
                                                                   #             #
    Holding company's loss for the financial year           (576,795)      (35,180)

9   Earnings per share

    The calculation of the basic earnings per share and diluted earnings per share
    is based on the loss attributable to ordinary shareholders of #576,795 (2002:
    Loss #35,180), divided by the weighted average number of shares in issue during
    the year.

    The weighted average number of shares used on the calculations are set out
    below:
                                                                  2003         2002
                                                             Number of    Number of
                                                                shares       shares

                                                           117,176,560   18,000,000


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

 10   Intangible fixed assets
      Group and company
                                                                    Goodwill
                                                                           #
      Cost
      At 1 September 2002                                                  -
      Additions                                                    4,339,503

      At 31 August 2003                                            4,339,503

      Amortisation
      At 1 September 2002                                                  -
      Charge for year                                                 90,406

      At 31 August 2003                                               90,406

      Net book value
      At 31 August 2003                                            4,249,097

      The Goodwill arises on the acquisition of Primary Steps Limited which
      had net liabilities of #787,413. The company was purchased for
      #3,552,090, being the 70,000,000 Ordinary Shares of 1 pence each issued
      by The Creative Education Corporation Plc at 5 pence per share, stamp
      duty of #17,500 and related legal and professional costs of #34,590.

11   Tangible fixed assets
     Group and company
                                           Short leasehold   Fixtures,   Total
                                            improvements    fittings &
                                                           equipment
                                                       #           #         #
     Cost
     At 1 September 2002                               -           -         -
     Transfer from Primary Steps Limited         307,476      71,887   379,363
     Additions                                   120,750      16,363   137,113
     Disposals                                   (10,952)     (1,864)  (12,816)

     At 31 August 2003                           417,274      86,386   503,660

     Depreciation
     At 1 September 2002                               -           -         -
     Transfer from Primary Steps Limited          12,290      19,384    31,674
     On disposals                                 (4,084)          -    (4,084)
     Charge for the year                          15,520       5,743    21,263

     At 31 August 2003                            23,726      25,127    48,853

     Net book value
     At 31 August 2003                           393,548      61,259   454,807


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

12   Fixed asset investments

     Company

                                                                  Shares in
                                                           Subsidiary undertakings
                                                                                 #
     Cost                                                                        -
     As at 1 September 2002                                              3,552,090
     Additions                                                          (3,552,090)
     Realisation through dividend
     At 31 August 2003                                                           -
     Holdings of more than 20%
     The company holds more than 20% of the share capital of the following
     companies:

Company                             Country of registration      Shares held
                                    or
                                    incorporation
                                                            Class               %
    Subsidiary undertakings
    Primary Steps Limited           England & Wales         Ordinary          100
   
    On 9 April 2003 The Creative Education Corporation Plc acquired the entire
    share capital of Primary Steps Limited for #3,500,000 by issue of 70,000,000
    Ordinary Shares of 1 pence at 5 pence per share.
    In addition #17,500 stamp duty on the transaction and #34,590 of related legal
    and professional costs were capitalised as part of the investment.
    Also on 9 April 2003, the entire trade of Primary Steps Limited was transferred
    to The Creative Education Corporation Plc for #3,552,090, the book value of The
    Creative Education Corporation Plc's investment in Primary Steps Limited.
    Following this, the reserves of Primary Steps Limited were transferred to The
    Creative Education Corporation Plc through a dividend of #3,552,090. This was
    set against the investment in Primary Steps Limited as a realisation of that
    investment.

    The net assets of Primary Steps Limited that were acquired were:
    Fixed assets                                  347,689
    Debtors                                        84,146
    Cash                                              366
    Overdrafts                                   (156,949)
    Creditors                                  (1,062,665)

                                                 (787,413)
    Goodwill                                    4,339,503

                                                3,552,090
                                                ===========
    Satisfied by:
    Issue of shares                            3,500,000
    Cash (costs)                                  52,090

                                               3,552,090
                                               ===========


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
---- ------------------------------------------------
13   Debtors
                                             Group                  Company
                                           2003       2002        2003         2002
                                              #          #           #            #

     Trade debtors                       22,335          -      22,335            -
     Other debtors                       11,750    100,000      11,750      100,000
     Prepayments and accrued income      40,183          -      40,183            -

                                         74,268    100,000      74,268      100,000

     Amounts falling due after more than one year and included in the debtors above
     are:
                                           2003       2002        2003         2002
                                              #          #           #            #

     Other debtors                       11,750          -      11,750            -

     These amounts relate to rent deposits.

14   Creditors : amounts falling due within one year
                                             Group                  Company
                                           2003       2002        2003         2002
                                              #          #           #            #

     Bank overdrafts                    259,392          -     259,392            -
     Trade creditors                    131,816          -     131,816            -
     Taxes and social security           20,500          -      20,500            -
     costs
     Directors' current accounts        349,000          -     349,000            -
     Other creditors                     49,594          -      49,594            -
     Accruals and deferred income       243,601          -     243,601            -

                                      1,053,903          -   1,053,903            -

     The bank overdraft is secured by a mortgage debenture over all the assets of
     the company.
     The directors have converted loans amounting to #335,000 into equity shares at
     5 pence per share since the year-end.


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

15   Share capital                                                          2003            2002
                                                                               #               #
     Authorised
     500,000,000 Ordinary Shares of 1 pence each                       5,000,000       5,000,000

     Allotted, called up and fully paid
     117,176,560 (2002: 18,000,000) Ordinary Shares of 1 pence each    1,171,766         180,000

     On 7 April 2003 4,000,000 Ordinary Shares of 1 pence were issued at 5 pence per share
     pursuant to an application for admission to AIM.
     On 7 April 2003 70,000,000 Ordinary Shares of 1 pence were issued at 5 pence per share in
     consideration for the acquisition of the entire share capital of Primary Steps Limited.
     A further 450,000 Ordinary Shares of 1 pence were issued at 5 pence per share to Walgate
     Trustees Limited, and 300,000 Ordinary Shares to Grant Thornton Corporate Finance in
     settlement of their fees in connection with the admission to AIM and the acquisition of
     Primary Steps Limited.
     In addition 24,426,560 Ordinary Shares of 1 pence were issued at 2.18 pence each pursuant
     to the conversion of convertible loan notes issued to L. Davis, Shortlands Investments
     Limited, Lincoln Trust Company (Jersey) and J. Baker.

16   Statement of movements on profit and loss account
                                                                     Merger       Share premium
                                                                     reserve          account
                                                                              #             #

     Balance at 1 September 2002                                              -        99,350
     Premium on shares issued during the year                                 -       478,234
     Cost of issue of shares                                                  -      (171,077)
     Movement during the year                                         2,800,000             -

     Balance at 31 August 2003                                        2,800,000       406,507



THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

17   Reconciliation of movements in shareholders' funds          2003         2002
     Group                                                          #            #

     (Loss)/profit for the financial year                    (576,795)     (35,180)
     New share capital subscribed                           4,098,923      279,350

     Net addition to shareholders' funds                    3,522,128      244,170
     Opening shareholders' funds                              244,170            -

     Closing shareholders' funds                            3,766,298      244,170

18   Net cash outflow from operating activities                  2003         2002
                                                                    #            #
     Reconciliation to operating loss:

     Operating loss                                          (576,231)     (35,180)
     Depreciation of tangible fixed assets                     21,263            -
     Amortisation of intangible fixed assets                   90,406            -
     Loss on disposal of tangible fixed assets                  6,868            -
     Decrease/(increase) in debtors                           109,878     (100,000)
     (Decrease)/Increase in creditors                        (268,154)           -

                                                             (615,970)    (135,180)

19   Reconciliation of net cash flow to movement in net          2003         2002
     debt
                                                                    #            #

     (Decrease)/increase in cash                             (204,950)     144,170
     Net debt at 1 September 2002                             144,170            -

     Net debt at 31 August 2003                              (217,363)     144,170

20   Analysis of net debt
                                             At 1 September Cash flow   At 31 August
                                                     2002                     2003
                                                        #           #            #

     Cash at bank and in hand                     144,170    (102,141)      42,029
     Bank overdrafts                                    -    (259,392)    (259,392)

                                                  144,170    (361,533)    (217,363)



THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

21   Financial commitments
     At 31 August 2003 the group had annual commitments under non-cancelable
     operating leases as follows:
                                               Land and buildings
                                                        2003            2002
                                                           #               #
     Expiry date:
     Within one year                                  50,500               -
     Between two and five years                       25,000               -
     In over five years                              207,000               -

                                                     282,500               -


22   Capital commitments
     There were no capital commitments at the year end.

23   Related party transactions
     Conversion of loans;
     On 8 April 2003 J Baker, a director, converted a loan of #221,332 included
     within Directors' current accounts, to 10,152,844 Ordinary Shares of 1
     pence each at a conversion price of 2.18 pence per share. J Baker was owed
     #60,000 (2002: #70,283) at the year-end.
     On 8 April 2003 J Baker Consultancy, a company in which J Baker (a
     director) has a controlling interest, converted a loan of #35,000 included
     within Directors' current accounts, to 1,605,505 Ordinary Shares of 1 pence
     each at a conversion price of 2.18 pence per share. J Baker Consultancy was
     owed #84,000 (2002: #35,000) at the year-end.
     On 8 April 2003 Iron Founders & Allied Trade Nominees Limited, a company in
     which J Baker (a director) has a controlling interest, converted a loan of
     #15,083 included within Directors' current accounts, to 691,881 Ordinary
     Shares of 1 pence each at a conversion price of 2.18 pence per share. Iron
     Founders & Allied Trade Nominees Limited were owed #nil (2002: #15,083) at
     the year-end.
     On 8 April 2003 L Davis, a director, converted a loan of #24,203 included
     within Directors' current accounts, to 1,110,229 Ordinary Shares of 1 pence
     each at a conversion price of 2.18 pence per share. L Davis was owed #nil
     (2002: #24,203) at the year-end.
     On 8 April 2003, a loan of #196,881 included within Directors' current
     accounts from Shortlands Investments Limited, a company in which L Davies
     (a director) has a controlling interest was converted to 9,031,239 Ordinary
     Shares of 1 pence each at a conversion price of 2.18 pence each. Shortlands
     Investments was owed #205,000 (2002: #75,000) at the year-end.
     On 8 April 2003, a loan of #40,000 from Lincoln Trust, a major shareholder,
     was converted to 1,834,862 Ordinary Shares of 1 pence each at a conversion
     price of 2.18 pence each. Lincoln Trust was owed #nil (2002: #40,000) at
     the year-end.
     Leases;
     During the year the Group was charged #21,875 (2002: #nil) for the lease of
     Primary Steps Milton Keynes and #16,779 (2002: #nil) for the lease of
     Primary Steps Hemel Hempstead by Conduit Square Limited, a company in which
     L. Davis and J. Baker are directors and shareholders.
     Also during the year the Group was charged #4,583 (2002: #nil) for the
     lease of Primary Steps East Sheen by Iron Founders & Allied Trade Nominees
     Limited, a company in which J. Baker is a director and sole shareholder


THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE YEAR ENDED 31 AUGUST 2003
--------------------------------------------------

24   Post Balance Sheet Events

     Group and company
     Share issues;
     On 9 September 2003 the company issued 7,000,000 Ordinary Shares of 1 pence
     at 5 pence per share.
     On 25 September 2003 the company issued 8,100,000 Ordinary Shares of 1
     pence at 5 pence per share.
     On 3 October 2003 the company issued 5,300,000 Ordinary Shares of 1 pence
     at 5 pence per share.
     On 18 November 2003 the company issued 12,300,000 Ordinary Shares of 1
     pence for 5 pence per share.
     On 1 December 2003, the company issued 5,043,850 Ordinary Shares of 1 pence
     at 5 pence per share.
     The purpose of the above issues was to raise funds for acquisitions and the
     on-going activities of the entity.
     Conversion of loans;
     On 25 September 2003 J Baker Consultancy, a company in which J Baker (a
     director) has a controlling interest, converted a loan of #130,000 included
     within Directors' current accounts at the year end, to 2,600,000 Ordinary
     Shares of 1 pence at a conversion price of 5 pence per share.
     On 25 September 2003, a loan of #205,000 included within Directors' current
     accounts at the year end from Shortlands Investments Limited, a company in
     which L Davis (a director) has a controlling interest, was converted to
     4,100,000 Ordinary Shares of 1 pence at a conversion price of 5 pence per
     share.
     Acquisitions;
     The following 6 acquisitions have taken place since the year end;
     Squirrels Day Nursery, Bedford
     Gosford Babies Nursery, Ilford, Essex
     Gosford House Nursery, Ilford, Essex
     Gosford House Pre- preparatory School, Ilford, Essex
     Clarence House Nursery, Ilford, Essex
     Academy Childcare Group Plc - 18.5% holding.




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END
FR UBOURSWRARAR