Sesión 1

19 to the Reed Elsevier PLC consolidated financial statements.

We have audited the parent company financial statements of Reed Elsevier PLC for the year ended 31 December 2007 (“the company financial statements”) which comprise the parent company balance sheet, the parent company reconciliation of shareholders’ funds, the parent company accounting policies, and the related note on page 164. These parent company financial statements have been prepared under the accounting policies set out therein.

We have also audited the information in the parts of the Directors’ Remuneration Report presented in the Reed Elsevier Annual Reports and Financial Statements 2007 (“the Remuneration Report”) that are described as having been audited. We have reported separately on the consolidated financial statements of Reed Elsevier PLC for the year ended 31 December 2007.

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 auditors’ 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

The directors’ responsibilities for preparing the Annual Report and the company financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the statement of

directors’ responsibilities. They are also responsible for the preparation of the other information contained in the Reed Elsevier Annual Reports and Financial Statements 2007 including, together with the directors of Reed Elsevier NV, the Remuneration Report.

Our responsibility is to audit the company financial statements and the parts of the Remuneration Report described as having been audited in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the company financial statements give a true and fair view and whether company financial statements and parts of the Remuneration Report to be audited have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our opinion, the directors’ report is consistent with the company financial statements. The information given in the directors’ report includes the business review that is cross referred from pages 19 to 34, 38 to 41 and 80 to 89 of the Reed Elsevier Annual Reports and Financial Statements 2007.

In addition we report to you if, in our opinion, 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 other information contained in the Reed Elsevier Annual Reports and Financial Statements 2007, as described in the contents section including the unaudited parts of the Remuneration Report, and consider whether it is consistent with the audited company financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the company financial statements. Our responsibilities do not extend to any further information outside the Reed Elsevier Annual Reports and Financial Statements 2007.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the company financial statements and the parts of the Remuneration Report described as having been audited. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the company financial statements, and of whether the accounting policies are appropriate to the company’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 company financial statements and the parts of the Remuneration Report described as having been audited 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 company financial statements and the parts of the Remuneration Report described as having been audited.

Opinion

In our opinion:

> The company financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the company’s affairs as at 31 December 2007;

> the company financial statements and the parts of the Remuneration Report described as having been audited have been properly prepared in accordance with the Companies Act 1985; and

> the information given in the directors’ report is consistent with the company financial statements.

Deloitte & Touche LLP

Chartered Accountants and Registered Auditors London

20 February 2008

Independent auditors’ report

IFRS UK GAAP

2007 2006 2005 2004 2004 2003

Note £m £m £m £m £m £m

Combined financial information

Revenue – continuing operations 2 4,584 4,509 4,265 3,944 3,944 4,027

Reported operating profit – continuing operations 2 888 837 752 699 607 570

Adjusted operating profit – continuing operations 2 1,137 1,081 981 909 995 1,004

Reported profit attributable to shareholders –

total operations 1,200 623 462 459 303 334

Adjusted profit attributable to shareholders –

total operations 852 796 754 687 760 744

Reed Elsevier PLC consolidated financial information

Reported profit attributable to shareholders 3 624 320 235 235 152 169

Adjusted profit attributable to shareholders 4 451 421 399 363 402 394

Reported earnings per ordinary share (pence) 3 49.7p 25.6p 18.6p 18.6p 12.0p 13.4p

Adjusted earnings per ordinary share (pence) 4 35.9p 33.6p 31.5p 28.7p 31.8p 31.2p

Dividend per share (pence) 5 18.1p 15.9p 14.4p 13.0p 13.0p 12.0p

(1) Adjusted figures are presented as additional performance measures and are stated before amortisation of acquired intangible assets and acquisition integration costs, and in respect of attributable profit, reflect a tax rate that excludes the effect of movements in deferred taxation assets and liabilities that are not expected to crystallise in the near term. Profit and loss from disposals and other non operating items are excluded from the adjusted figures.

(2) Revenue, reported operating profit and adjusted operating profit are presented for continuing operations. Net profit from discontinued operations is included in profit attributable to shareholders.

(3) Reported profit attributable to shareholders and report earnings per share are based on the 52.9% share of the Reed Elsevier combined profit attributable to shareholders, adjusted to equalise the benefit of the UK dividend tax credit with Reed Elsevier NV shareholders as a reduction in reported profits.

(4) Adjusted profit attributable to shareholders and adjusted earnings per share are based on the 52.9% share of the Reed Elsevier combined profit attributable to Reed Elsevier PLC shareholders.

168 Report of the Supervisory Board and