REED ELSEVIER NV Balance sheets As at 31 December 2003 Group Parent Company 2003 2002 2003 2002 Note € m € m € m € m Fixed assets Investment in joint ventures 11 Share of gross assets 5,805 6,609 – –  Share of gross liabilities (3,901) (4,429) – – Share of net assets 1,904 2,180 – – Investments 12 – – 2,161 2,161 1,904 2,180 2,161 2,161 Current assets Debtors 13 56 56  56 56  Short term investments 7 15 7 15  63 71  63 71  Creditors: amounts falling due within one year 14 (174) (167) (174) (167) Net current liabilities (111) (96) (111) (96) Total assets less current liabilities 1,793 2,084  2,050 2,065 Creditors: amounts falling due after more than one year 15 (65) (65) (65) (65) Net assets 1,728 2,019 1,985 2,000 Capital and reserves Share capital issued 17,18 47 47 47 47 Paid in surplus 18 1,463 1,460 1,463 1,460 Shares held in treasury 18 (27) (15) – – Reserves 18 245 527 475 493 Shareholders’ funds 18 1,728 2,019 1,985 2,000 Reconciliations of shareholders’ funds For the year ended 31 December 2003 Group Parent Company 2003 2002 2003 2002 € m € m € m € m Profit attributable to ordinary shareholders 242 144  203 152 Equity dividends paid and proposed (221) (221) (221) (221) Issue of shares, net of expenses 3 22  3 22  Increase in shares held in treasury (13) (1) – – Exchange translation differences (310) (303) – – Equalisation adjustments 8 – – – Net decrease in shareholders' funds (291) (359) (15) (47) Shareholders' funds at 1 January 18 2,019 2,378  2,000 2,047 Before prior year adjustment 2,034 2,392 2,000 2,047 Prior year adjustment in relation to the presentation of shares held in treasury 20 (15) (14) – – Shareholders' funds at 31 December 1,728 2,019 1,985 2,000 Group financial statements, reflecting Reed Elsevier NV’s 50% interest in the Reed Elsevier combined businesses, are presented using the gross equity method. 96 REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003