REED ELSEVIER NV > NOTES TO THE FINANCIAL STATEMENTS Contingent liabilities 19 Prior year adjustment 20 Principal joint ventures 21 REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003 103 There are contingent liabilities in respect of borrowings of Reed Elsevier Group plc group and Elsevier Reed Finance BV group guaranteed by Reed Elsevier NV as follows: Financial instruments disclosures in respect of the borrowings covered by the above guarantees are given in note 22 to the Reed Elsevier combined financial statements. In accordance with UITF38: Accounting for ESOP Trusts issued in December 2003 by the Urgent Issues Task Force of the UK Accounting Standards Board, the Reed Elsevier combined businesses now present the shares in Reed Elsevier PLC and Reed Elsevier NV held by the Reed Elsevier Group plc Employee Benefit Trust as shares held within treasury, which are deducted within combined shareholders' funds. Previously, such shares were included within the other fixed asset investments of the combined businesses. The group balance sheet as at 31 December 2002 has been restated to reflect Reed Elsevier NV's share of the restatement made in the combined financial statements in relation to the presentation of shares held in treasury. The principal joint ventures are: The "R" shares in Reed Elsevier Group plc and Elsevier Reed Finance BV are owned by Reed Elsevier PLC. In addition, Reed Elsevier NV holds  € 0.14m par value in shares with special dividend rights in Reed Elsevier Overseas BV and Reed Elsevier Nederland BV, both with registered offices in Amsterdam. These shares are included in the amount shown under investments in joint ventures. They enable Reed Elsevier NV to receive dividends from companies within the same tax jurisdiction. A list of companies within the Reed Elsevier combined businesses is filed with the Amsterdam Chamber of Commerce in the Netherlands. M Tabaksblat Chairman M H Armour Chief Financial Officer % holding Reed Elsevier Group plc Incorporated and operating in Great Britain £10,000 ordinary "R" shares – 1-3 Strand £10,000 ordinary "E" shares 100% London WC2N 5JR £100,000 7.5% cumulative preference non voting shares – Holding company for operating businesses involved in science & medical, legal, educational and business publishing Equivalent to a 50% equity interest Elsevier Reed Finance BV Incorporated in the Netherlands 133 ordinary "R" shares – Sara Burgerhartstraat 25 205 ordinary "E" shares 100% 1055 KV Amsterdam, The Netherlands Holding company for financing businesses Equivalent to a 61% equity interest 2003 2002 € m € m Guaranteed jointly and severally with Reed Elsevier PLC 3,822 4,493