COMBINED FINANCIAL STATEMENTS > NOTES TO THE COMBINED FINANCIAL STATEMENTS Net interest expense 2003 2002 2003 2002 £m £m € m € m Interest receivable and similar income 18 24 26 38 Interest payable and similar charges Promissory notes and bank loans (46) (76) (67) (120) Other loans (139) (152) (201) (242) Other interest and similar charges (1) (2) (1) (3) Total (168) (206) (243) (327) Interest cover (times) 7.0 5.5 7.0 5.5 7 Interest cover is calculated as the number of times adjusted operating profit is greater than the net interest expense. Tax on profit on ordinary activities 2003 2002 2003 2002 £m £m € m € m Current tax United Kingdom 2 (6) 3 (10) The Netherlands 58 62 84 99 Rest of world 57 (14) 83 (22) Total current tax 117 42 170 67 Deferred tax Origination and reversal of timing differences 60 58 87 92 Sub-total 177 100 257 159 Share of tax attributable to joint ventures 6 7 8 12 Total 183 107 265 171 8 The tax charge for the year as a proportion of profit before tax was increased due to non tax-deductible amortisation and reduced by exceptional tax credits arising on prior year disposals. 2003 2002 2003 2002 £m £m € m € m Profit on ordinary activities before tax 519 289 752 460 Tax at average standard rates 152 79 220 126 Net impact of amortisation of goodwill and intangible assets 108 109 157 173 Prior year disposals (76) (100) (110) (159) Permanent differences and other items (7) 12 (10) 19 Origination and reversal of timing differences (60) (58) (87) (92) Current tax charge 117 42 170 67 A reconciliation of the notional current tax charge based on average standard rates of tax (weighted in proportion to accounting profits) to the actual current tax charge is set out below: Equity dividends paid and proposed 2003 2002 2003 2002 £m £m € m € m Reed Elsevier PLC 152 143 220 227 Reed Elsevier NV 152 139 221 221 Total 304 282 441 448 9 Dividends comprise a total dividend for Reed Elsevier PLC of 12.0p (2002: 11.2p) per ordinary share and a total dividend for Reed Elsevier NV of  € 0.30 (2002:  € 0.30) per ordinary share. Dividends paid to Reed Elsevier PLC and Reed Elsevier NV shareholders are equalised at the gross level inclusive of the UK tax credit of 10% received by certain Reed Elsevier PLC shareholders. 54 REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003