P ROCESOS SEMÁNTICO COGNITIVOS

Opinion on our audit of the combined financial statements of Reed Elsevier

In our opinion the combined financial statements: ƒ

ƒ give a true and fair view of the state of affairs of Reed Elsevier

PLC, Reed Elsevier NV, Reed Elsevier Group plc, Elsevier Reed Finance BV and their respective subsidiaries, associates and joint ventures (together “the combined businesses”) as at 31 December 2013 and of their profit and their cash flows for the year then ended; and

ƒ

ƒ have been properly prepared in accordance with International

Financial Reporting Standards (IFRSs) as adopted by the European Union.

We have audited the combined financial statements of the combined businesses which comprise the combined income statement, the combined statement of comprehensive income, the combined statement of cash flows, the combined statement of financial position, the combined statement of changes in equity, a summary of significant accounting policies and the related notes 1 to 31. The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the European Union.

Our assessment of risks of material misstatement

The assessed risks of material misstatement described below are those that, in our professional judgement, had the greatest effect on our audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team:

RISK HOW THE SCOPE OF OUR AUDIT RESPONDED TO THE RISK

The assessment of the carrying value of goodwill and acquired intangible assets;

The combined businesses had £4,576m of goodwill and £2,404m of acquired intangible assets as at 31 December 2013. The quantum of these balances together with the inherent judgements required to be made when performing an impairment review have resulted in us considering this a significant risk.

We challenged management’s assumptions used in the impairment model for goodwill and acquired intangible assets, described in note 14 to the combined financial statements, including specifically the cash flow projections, discount rate, perpetuity growth rates and sensitivities used.

The carrying value of internally developed intangible assets in accordance with IAS38 “Intangible Assets”;

The closing net book value of all capitalised development projects is £720m. The quantum of these balances together with the inherent judgements required to be made when performing an impairment review have resulted in us considering this a significant risk.

We challenged management’s assessment as to whether development projects in-progress were still expected to deliver sufficient positive economic benefits to the combined businesses upon their completion, and for completed development projects, considered whether the useful economic lives selected remained appropriate.

Revenue recognition, including the timing of revenue recognition and the accounting for multiple element arrangements; Reed Elsevier’s businesses continue to evolve and new business models can result in new revenue arrangements. This can result in circumstances which require careful consideration to determine how revenue should be recognised.

We performed tests of controls over revenue recognition, including the timing of revenue recognition and the accounting for revenue recognition in multiple element arrangements, as well as substantive testing, analytical procedures and assessing whether the revenue recognition policies adopted complied with IFRS. The valuation of amounts recorded for uncertain tax positions;

Reed Elsevier operates in a significant number of jurisdictions around the world, all with differing tax regimes with complex cross-border arrangements, and is therefore open to challenge from multiple tax authorities.

We considered the appropriateness of management’s

assumptions and estimates in relation to uncertain tax positions, challenging those assumptions and considering advice received by management from external parties to support their position. The above matters are selected from the matters communicated

to the Audit Committees, but are not intended to represent all matters that were discussed with them. The Audit Committees’ consideration of these risks is set out on page 95.

Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the risks described above, and we do not express an opinion on these individual matters.

Our application of materiality

We have considered a number of benchmarks in order to guide our determination of our materiality. We determined materiality for the combined businesses to be £85m, which is around 7% of pre-tax profit and below 5% of equity. Our audit work at the operating locations was executed at levels of materiality lower than the materiality for the combined businesses and was capped at £30m or $50m.

We agreed with the Audit Committees that we would report to the Committees all audit differences in excess of £1.7m, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

An overview of the scope of our audit

Our audit of the combined financial statements was scoped by obtaining an understanding of the combined businesses and its environment, including the entity-wide controls, and assessing the risks of material misstatement at the combined businesses level. Based on that risk assessment, we designed and performed audit procedures responsive to those risks, and obtained audit evidence that is sufficient and appropriate to provide a basis for our opinion. In making those risk assessments, we considered internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. As part of an audit in accordance with the applicable standards, we exercised professional judgment and maintained professional scepticism throughout the planning and performance of the audit.

Fin an cial s tat eme nt s an d o the r inf or m ati on G ov er nan ce Fin an cial re vie w B us ine ss re vie w w

Based on that assessment, our audit scope for the combined businesses focused primarily on the audits of seventeen operating locations, which represent the principal business units within the combined businesses’ five reportable segments. These locations, together with the combined businesses’ head office functions, which were also subject to a full scope audit, account for 95% of the combined businesses’ total assets, 92% of the combined businesses’ total liabilities, 80% of the combined businesses’ revenue, 84% of the combined businesses’ adjusted operating profit and 87% of the combined businesses’ profit before tax. They were also selected to provide an appropriate basis for undertaking audit work to address the risks of material misstatement

identified above.

The combined businesses’ audit team continued to follow a programme of planned visits that has been designed so that the Audit Partners of Reed Elsevier PLC and Reed Elsevier NV frequently visit the key locations. The Audit Partners also attend audit close meetings with management of each of the combined businesses’ five operating segments, alongside the local auditors of the business units.

We also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there were no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to audit. We obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities to express an opinion on the combined financial statements. We are responsible for the direction, supervision and performance of the combined businesses’ audit. We remain responsible for our audit opinion.

Going concern

The financial statements of the combined businesses have been prepared using the going concern basis of accounting. The use of this basis of accounting is appropriate unless management either intends to liquidate the combined businesses or to cease operations, or has no realistic alternative but to do so.

We have reviewed the Report of the Boards on page 76 where the Board has not identified a material uncertainty that may cast significant doubt on the combined businesses’ ability to continue as a going concern. We confirm that:

ƒ

ƒ we have not identified material uncertainties related to events

or conditions that may cast significant doubt on the combined businesses’ ability to continue as a going concern which we believe would need to be disclosed in accordance with IFRSs as adopted by the European Union; and

ƒ

ƒ we have concluded that the Board’s use of the going concern

basis of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the combined businesses’ ability to continue as a going concern.

Other matters

The separate audit reports on the consolidated financial statements of Reed Elsevier PLC and Reed Elsevier NV, which have been audited under locally adopted auditing standards and which include the other opinions required by local laws and regulations, appear on pages 174 to 175 and 197 to 198.

Respective responsibilities of directors and auditor As explained more fully in the Directors’ responsibilities statement, the Boards are responsible for the preparation of the combined financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and for being satisfied that they give a true and fair view and for such internal control as they determine is necessary to enable the preparation of combined financial statements that are free from material misstatement, whether due to fraud or error.

Our responsibility is to audit and express an opinion on the combined financial statements in accordance with International Standards on Auditing (UK and Ireland) as issued by the United Kingdom Auditing Practices Board and Dutch Law, including the Dutch Standards on Auditing. The standards require us to comply with our respective professions’ ethical requirements, including the Auditing Practices Board’s Ethical Standards for Auditors and the International Ethical Standards Board of Accountants Code of Ethics. We are independent of the group within the meaning of the applicable law and regulation and have fulfilled our other responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

We are required to communicate with the Audit Committees regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We are also required to provide the Audit Committees with a statement that we have complied with relevant ethical

requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable related safeguards.

Scope of the audit of the combined financial statements An audit involves obtaining evidence about the amounts and disclosures in the combined financial statements sufficient to give reasonable assurance that the combined financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the combined businesses’

circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the combined financial statements. In addition, we read all the financial and non-financial information in the annual report to identify material inconsistencies with the audited combined financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Douglas King (Senior statutory auditor) A Sandler

For and on behalf of

Deloitte LLP Deloitte Accountants B.V.

Chartered Accountants Amsterdam

and Statutory Auditor The Netherlands

London, United Kingdom

26 February 2014 26 February 2014

Fin an cial s tat eme nt s an d o the r inf or m ati on G ov er nan ce Fin an cial re vie w B us in es s re view w

Summary

combined

financial

information

in euros

In this section

142 Combined income statement 142 Combined statement of

comprehensive income

143 Combined statement of cash flows 144 Combined statement of

financial position 145 Combined statement of

changes in equity

146 Notes to the summary combined financial information in euros

142

SUMMARY COMBINED FINANCIAL STATEMENTS IN EUROS