UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 20-F


(Mark One)

   [ ]    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE
          SECURITIES EXCHANGE ACT OF 1934

                                       OR

   [X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

          For the fiscal year ended December 31, 1997
                                    -----------------

                                       OR

   [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

          For the transition period from ______ to ______


          Commission file number 0-13456
                                 -------

                               Reuters Group PLC
                      (successor to Reuters Holdings PLC)
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


                                    England
--------------------------------------------------------------------------------
                (Jurisdiction of incorporation or organization)


                   85 Fleet Street, London EC4P 4AJ, England
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


Securities registered or to be registered pursuant to Section 12(b) of the Act:
None.
-----

Securities registered or to be registered pursuant to Section 12(g) of the Act:
Ordinary Shares of 25p each.
----------------------------

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: None.
            -----

Indicate the number of outstanding shares of each of the issuer's predecessor's
classes of capital or common stock as of the close of the period covered by the
annual report (which does not reflect the capital reorganization effected
February 18, 1998).

          Ordinary Shares of 2.5p each............... 1,694,222,503

          Founders Share of (pound)1.................             1

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                Yes [X]    No [ ]

Indicate by check mark which financial statement item the registrant has elected
to follow

                           Item 17 [ ]     Item 18 [X]


<PAGE>
                               TABLE OF CONTENTS

                                                                           Page

PART I

ITEM 1.   Description of Business............................................  3
ITEM 2.   Description of Property............................................ 10
ITEM 3.   Legal Proceedings.................................................. 10
ITEM 4.   Control of Registrant.............................................. 10
ITEM 5.   Nature of Trading Market........................................... 13
ITEM 6.   Exchange Controls and Other Limitations
          Affecting Security Holders......................................... 14
ITEM 7.   Taxation........................................................... 14
ITEM 8.   Selected Financial Data............................................ 17
ITEM 9.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations.......................................... 21
ITEM 9A   Quantitative and Qualitative Disclosures About Market Risk......... 22
ITEM 10.  Directors and Officers of Registrant............................... 23
ITEM 11.  Compensation of Directors and Officers............................. 24
ITEM 12.  Options to Purchase Securities from
          Registrant or Subsidiaries......................................... 24
ITEM 13.  Interest of Management in Certain Transactions..................... 27

PART II

ITEM 14.  Description of Securities to be Registered......................... 27

PART III

ITEM 15.  Defaults upon Senior Securities.................................... 27
ITEM 16.  Changes in Securities and Changes in Security for
          Registered Securities.............................................. 27

PART IV

ITEM 17.  Financial Statements...............................................  *
ITEM 18.  Financial Statements............................................... 27
ITEM 19.  Financial Statements and Exhibits.................................. 28

SIGNATURES................................................................... 29

----------------
* The registrant has responded to Item 18 in lieu of responding to this Item.


                                       2
<PAGE>
      As more fully described below in Item 4 of this Report, on February 18,
1998 Reuters Holdings PLC ("Reuters Holdings") consummated a court approved
capital reorganization in which shares of Reuters Holdings PLC were exchanged
for a combination of shares of Reuters Group PLC ("Reuters Group") and
approximately 1.5 billion in cash. As a result, Reuters Holdings is now a
subsidiary of Reuters Group. In all other respects, the business and assets of
the Reuters group of companies have not been affected.

      As used in this Report, "Reuters" refers collectively to Reuters Group and
its consolidated subsidiaries except as the context otherwise requires. 

      The Consolidated Financial Statements of Reuters Holdings incorporated
herein by reference from Reuters 1997 Annual Report to Shareholders (the "1997
Annual Report to Shareholders") are presented in pounds sterling ("pound"). On
December 31, 1997, the noon buying rate in New York City for cable transfers in
foreign currencies as announced for customs purposes by the Federal Reserve Bank
of New York (the "Noon Buying Rate") was $1.64 per (pound)1; on February 18,
1998 the Noon Buying Rate was also $1.64 per (pound)1. For additional
information on exchange rates between the pound sterling and the US dollar, see
"Exchange Rates" in Item 8 of this Report.

      Reuters Consolidated Financial Statements are prepared in accordance with
accounting principles generally accepted in the United Kingdom ("UK GAAP"). UK
GAAP differ in certain respects from accounting principles generally accepted in
the United States ("US GAAP"). The principal differences between UK GAAP and US
GAAP relevant to Reuters are explained in "Summary of Differences Between UK and
US Generally Accepted Accounting Principles" included in the Consolidated
Financial Statements referred to above.


                                     PART I
                                     ------

ITEM 1. DESCRIPTION OF BUSINESS 
------------------------------- 

      Reuters supplies the global financial business and news media communities
with a wide range of products including real-time financial data, transaction
systems, information management systems, access to numeric and textual historic
databases, news, graphics, still photos, television news and news video. It
provides certain electronic brokerage services through Instinet for equities,
and through its Dealing 2000-2 automated matching service for foreign exchange.

      Information is obtained from 277 exchanges and over-the-counter markets,
from some 4,800 subscribers who contribute data directly to Reuters, and from a
network of 2,036 journalists, photographers and camera operators. There are some
435,000 user accesses for Reuters products around the world, including accesses
by clients using equipment not owned by Reuters.

                              Information Sources
                              -------------------

      Reuters gathers exchange and over-the-counter trading data, contributed
data, reference data and general, financial and business news.

      Reuters obtains current trading information for securities, commodities,
options and futures from organized exchanges and over-the-counter markets. The
information is normally transmitted electronically to Reuters databases by a
direct feed from the computerized reporting system maintained by an exchange.
Dealers and brokers in foreign exchange and other financial markets contribute
their latest quotations to Reuters databases using Reuters terminals or their
own computer systems. Data contributed by one contributor is available to all
other subscribers to the same product except those the contributor directs
should be precluded. Reuters also has a number of long-term agreements with
certain brokers and specialist data vendors for the supply of key market data.

      Other numeric data such as corporate and economic statistics and textual
historical information is obtained from a wide range of publications and other
third party sources, including annual reports. Data is gathered in either
electronic or hard copy form and is edited by specialized Reuters staff.

                                       3
<PAGE>

      Reuters staff also report and edit general and specialized news for
business and media subscribers in textual, video and audio form. At December 31,
1997, Reuters journalists, photographers and camera operators were based in
reporting bureaus located in 174 cities in 107 countries. Reuters reporting
staff are supported by part-time staff in almost every country. Many Reuters
text journalists are financial or other market specialists. 

      As it is received, data is automatically processed and stored on a
continually updated basis so that subscribers can retrieve it within seconds.
Reuters information databases range from real-time to over ten years old.

                               Principal Products
                               ------------------

      Reuters products may be categorized into: information products
contributing 64% of total 1997 revenue, transaction products contributing 29%
and media and professional products contributing 7%.

Information Products 
-------------------- 

      Reuters information products include real-time information, historic
information databases, applications products and information management systems.
Real-time information, historic information databases and applications products
are delivered to subscribers through personal computer-based Reuters Terminals
("RTs") or, in the case of real-time data, via datafeeds, through
Reuters-supplied or third-party information management systems. Reuters
databases carry around two million individual instruments. Reuters also supplies
a software-only version of its standard RT, which allows Reuters information
products to be distributed over a subscriber's own local area network and
hardware. In addition, Reuters delivers information via the Reuters Web, which
uses Internet technology, to customer intranets.

      Reuters packages real-time and historical news and prices into products
designed to suit the requirements of subscribers in particular sectors of the
financial and business communities. These products cover the world's foreign
exchange, money, securities, fixed income, commodities, energy and shipping
markets. Reuters foreign exchange and money market products were its greatest
source of revenue in each of the last three years.

      During 1997 Reuters continued the rollout of its new generation "3000"
range of information products. By year end approximately 28,000 accesses had
been installed. Reuters 3000 products combine the real-time features of its
existing "2000" series (described below) with access to historical data, a range
of analytics and graphing capabilities, textual and television news and Reuters
Mail, an electronic messaging facility. Subscribers to the 3000 range also
receive a continuous flow of news stories, as well as background economic data
and analyses, on the relevant instruments. The 3000 range is delivered to
subscribers over a high speed proprietary network using industry standard
Internet protocols. In 1997 Reuters launched PowerPlus 32, a new advanced
financial analytic package that is being marketed in conjunction with the
Reuters 3000 range of products. 

      Reuters 2000 series of real-time international services are carried on its
Integrated Data Network ("IDN"). These products are formed from a series of
content "building blocks", each containing relevant real-time prices and related
data on a particular market. Both the 3000 series and the 2000 series of
products are grouped in different combinations to allow subscribers to select
the product or products specific to their needs. As with the 3000 range, the
2000 range may be supplemented with news stories and analytics. 

      Reuters also delivers textual financial news in more than twenty languages
and offers a specialized financial television service designed for the
professional user.

      In addition to the international products described above, Reuters offers
many domestic information products, focused on the needs of individual
countries. Domestic news services, written in the national language where
appropriate, complement the information products. A range of optional products
produced by third parties to augment Reuters news and market data is also
available to subscribers.

                                       4
<PAGE>
      In 1997 Reuters also introduced several new information products for
intranet and Internet delivery. These included products developed in
collaboration with certain large European banks which enable the banks to
circulate information to their branches and customers over their own private
intranets. In addition, Reuters and Sun Microsystems Inc. launched ReutersFirst
Web, a web browser-based service for the Japanese market that uses "push"
architecture to deliver real-time data in an Internet protocol. 

      Reuters also offers a number of risk management products which encompass
deal capture, position keeping, credit management and risk analysis.

      Reuters also designs, installs and maintains digital and video information
management systems. These systems allow access to Reuters real-time information,
information databases and transaction products, products of other data suppliers
and the customer's own in-house computer facilities. Reuters two main products
in this sector, Triarch 2000 and The Information Bus ("TIB"), are digital
systems offering a choice of operating systems and platforms and using local
area networks to distribute the data. TIB is the principal product of TIBCO
Finance Technology Inc. ("TIBCO Finance", formerly TIBCO Inc.), a US company
acquired by Reuters in 1994. In 1997 the business of TIBCO Inc. was
restructured. A new company, TIBCO Software Inc., ("TIBCO Software") was formed
to pursue opportunities for applying TIBCO technology to sectors outside
finance, including the Internet. TIBCO Finance continues to focus on the
financial sector in and beyond the trading room. In connection with this
restructuring, option plans were established under which up to 26% of the
outstanding shares of TIBCO Software (on a fully diluted basis) could be
acquired by employees of TIBCO Software and TIBCO Finance. In addition, TIBCO
Software issued new convertible preferred shares to two outside investors, CISCO
Systems, Inc. and Mayfield Venture Capital Fund, who at the end of 1997 owned 8%
and 5%, respectively, of the fully diluted share capital of TIBCO Software.

      In 1997 Reuters acquired a 49% stake and voting control in Bisnews
Information Services Limited of Thailand, a supplier of domestic real-time
information and news to over 7,600 Thai financial market participants. Reuters
also acquired a 67% equity interest in Marvin S.A., a Paris-based real-time
calculation software specialist company, and has an option to purchase the
remaining 33% by 2001. In addition, Reuters and Jiji Press Limited of Japan
agreed to extend areas of cooperation in the production, distribution and sale
of services for financial and corporate markets.

Transaction Products
--------------------

      Reuters transaction products enable dealers to contact counterparties
through Reuters communications networks in order to effect trades.

      Dealing 2000-1 enables dealers to contact one another directly within
seconds to negotiate and conclude trades in foreign exchange and other financial
markets. Up to four conversations can be conducted simultaneously. The product
also automates the production of "tickets" for foreign exchange deals and
certain other money market instruments. 

      Through its UK subsidiary Reuters Transaction Services Limited ("RTSL"), a
regulated wholesale money market institution, Reuters operates Dealing 2000-2
Spot, an electronic brokerage service for the interbank spot foreign exchange
market. Dealing 2000-2 Spot enables all traders linked to the product to see the
best buy or sell price for a currency pair simultaneously. This automatic,
anonymous service matches bid and offer orders using a central computer,
verifying that the counterparties have sufficient and mutually acceptable
credit.

      In 1997 RTSL launched a modified version of the Dealing 2000-2 Spot
service, known as Dealing 2000-2 Forwards, to cater to the forward foreign
exchange market. 

      Through its subsidiary Instinet Corporation ("Instinet"), a registered US
securities broker, Reuters operates an equity securities market information and
trading system for investment professionals (the "Instinet System"). The
Instinet System provides anonymous two-way computerized transactional capability
and continuously updated market information with respect to equity securities
traded on US national and regional stock exchanges and NASDAQ and with respect
to certain non-US equity securities. 

                                       5
<PAGE>
      In addition to enabling customers to negotiate trades directly with each
other, the Instinet System automatically executes clients' matching buy and sell
orders. Instinet also offers a number of "crossing" services which operate
outside regular trading hours in the markets for the relevant securities, and a
research and analytics product which allows traders and portfolio managers to
monitor and analyze real-time and historical stock price data via traditional,
proprietary and customized technical indicators.

      Affiliates of Instinet are members of the American Stock Exchange, the
Chicago Board Options Exchange, all major regional securities exchanges in the
US, the Toronto Stock Exchange, the London Stock Exchange, the Frankfurt Stock
Exchange, the Paris Bourse, the Zurich Stock Exchange, the Hong Kong Stock
Exchange, the Stockholm Stock Exchange and the European Options Exchange. An
Instinet affiliate has a license from the Ministry of Finance in Japan to
operate as a foreign securities firm with a Tokyo branch. 

      GLOBEX(R), an automated order matching system for trading futures and
options contracts, is operated by Reuters under an agreement with the Chicago
Mercantile Exchange ("CME") and the March Terme International de France
("MATIF"). The agreement, which was due to expire on May 1, 1998, has been
extended to September 30, 1998 and may be further extended to December 31, 1998.
GLOBEX will not continue beyond 1998 as MATIF and CME have announced their
intention to use a different proprietary system.

Media and Professional Products 
------------------------------- 

      Reuters supplies textual news on politics, finance, economics and
business, the arts, sports, science, technology and general human interest
issues to newspapers, radio and television stations, on-line services,
governments and international institutions. Reuters also operates international
news pictures and news graphics services for the newspaper, magazine, television
and on-line markets. Reuters supplies these services either directly to
subscribers or through national news organizations to which Reuters has granted
distribution rights.

      Reuters also operates a large international television news agency,
Reuters Television, and participates in joint ventures that operate three 24
hour radio news stations. It holds minority interests in UK-based Independent
Television News (ITN) and India's ANI news agency. 

      In addition, Reuters provides a range of professional products for
customers outside the financial industry, including business information,
medical and advertising products, and provides multi-media news packages to
Internet-based publishers and redistributors. It is a leading provider of news
on the Internet and operates a specialized sports website with Digital Equipment
Corporation at "http://www.sportsweb.com/. Reuters is also using the Internet to
provide information about Reuters itself, and its products, to existing and
potential customers at "http://www.reuters.com/".

                        Data and Communications Networks
                        --------------------------------

      Reuters operates a number of communications networks, employing various
technologies, for distribution of its products. Reuters is making increasing use
of Internet technology which is being incorporated into the Reuters Web
communications network. 

      Reuters has two global technical centers, two main technical centers and a
number of smaller local data centers. Reuters data centers are linked by
dedicated international communications circuits which rely on satellite links,
optical fiber cables and coaxial cables. These circuits are leased from various
governmental and private telecommunications operators.

      Communications between data centers and Reuters subscribers are usually by
dedicated terrestrial circuits which are leased from telecommunications
operators and are supplemented by a variety of other transmission systems. These
include satellite-based networks for delivery of services to small dish
receivers on customer premises as an alternative to terrestrial lines.

                                       6
<PAGE>
                          Principal Geographic Markets
                          ----------------------------

      Reuters products are distributed to 163 countries. Operations are divided
for financial reporting purposes into three principal geographical areas;
Europe, Middle East and Africa; Asia/Pacific; and the Americas, with the
world-wide operations of Instinet and TIBCO reported separately because it is
impractical to report these operations by geographic area. 

      An analysis of revenue, costs, contribution and assets by market is
provided under the heading "Operating and Financial Review" and in Notes 2 and
15 of Notes on the Consolidated Financial Statements, both incorporated herein
by reference from the 1997 Annual Report to Shareholders.

                           Subscribers and Marketing
                           -------------------------

      In an open systems environment customers can choose their own terminal
hardware. Therefore, Reuters information products are billed by number of user
accesses. User accesses include terminals, accesses to datafeeds, slave screens,
portable data screens and pagers. The number of user accesses at the end of each
of the last three years is set forth below.

                                          At December 31,
                                ----------------------------------
                                1997           1996           1995
                              -------        -------        -------

Information Products          386,000        321,000        292,900
Transaction Products           38,000         33,500         30,100
Professional Products          11,000          7,500          4,100
                              -------        -------        -------

Total                         435,000        362,000        327,100
                              =======        =======        =======


--------------------

(1) Accesses to certain Professional Products, principally in healthcare and
advertising, are not included

      Information relating to user accesses and an analysis of subscribers by
type are provided under the heading "Operating and Financial Review" and in Note
14 of Notes on the Consolidated Cash Flow Statement, both incorporated herein by
reference from the 1997 Annual Report to Shareholders.

      Subscribers are supported by "Front Line Business Units", which are
responsible for the sale, delivery, support and administration of Reuters
products within their territory. Reuters products are generally marketed by
Reuters own sales force.

      The majority of Reuters revenue is recurring and generally covered by
contracts of indefinite term, subject to a two year initial commitment for new
clients. Most services are cancellable on 12 months' notice although certain
services may be cancelled on six or three months' notice. Currently the majority
of contracts with larger, multi-location subscribers generally have terms of
four years and allow the subscriber to cancel a portion of its Reuters services
without incurring liquidated damages. Since the beginning of 1997, upon renewal
of their contracts, such subscribers are asked to sign an indefinite global
contract which is terminable by either party on two years' notice and which also
includes a cancellation allowance. Charges are based upon the particular
products purchased by a subscriber and the number of user accesses. Payment
terms are generally in advance. Charges for certain other Reuters products vary
according to volume of use. These include the Instinet System, Dealing 2000-2
and certain information database products.

      Under its agreements with Dealing 2000-2 subscribers, RTSL accepts
liability for direct net loss incurred by subscribers solely as a result of a
transmission or processing fault that is shown to be caused by the negligence or
wilful misconduct of Reuters. RTSL only accepts this liability in full for
trades with a value of up to $15 million; for trades above $15 million, RTSL
agreements with Dealing 2000-2 subscribers limit RTSL's liability on a pro rata
basis.

                                       7
<PAGE>
                             Development Activities
                             ----------------------

      Expenditures for development, which exclude costs associated with the
Millennium program, aggregated (pound)235 million in 1997, (pound)202 million in
1996 and (pound)191 million in 1995. Of the total amount (pound)162 million
(1996 -- (pound)137 million) was spent on information products and (pound)60
million (1996 -- (pound)50 million) on transaction products. Activities during
1997 included continuing the development of the 3000 series products,
improvements to data collection systems, further development by Instinet and of
other transaction products and development relating to TIBCO and Internet
products.

      The requirements of the forthcoming Millennium and European Monetary Union
deadlines necessitated diversion of development effort to upgrade certain
products and phase out others. For information relating to Reuters Millennium
and European Monetary Union Programs see the discussion included in the
"Operating and Financial Review" incorporated herein by reference from the 1997
Annual Report to Shareholders.

                         Equipment Supply and Servicing
                         ------------------------------

      Reuters central computers are presently supplied by Digital Equipment
Corporation, with a limited number of computers from International Business
Machines Corporation, NCR Corporation and other manufacturers. Reuters central
computers are installed and normally maintained by the supplier. Operation is
carried out by Reuters personnel. Reuters installs and provides first level
maintenance for client site equipment either directly or in some countries via
sub-contractors. Some clients specify and supply such equipment themselves and
may be responsible for its maintenance. All Reuters application software on
central computers and client site systems is maintained by Reuters.

                                  Competition
                                  -----------

      Reuters faces competition in all market sectors and geographical areas.
Some rival information vendors compete across a range of markets and in most
major financial centers. Other vendors are more specialized, either in markets
or location. Reuters transaction products compete with similar products from
other vendors, other electronic brokers, and with other trading methods, such as
the use of non-electronic brokers and the telephone.

Information Products 
-------------------- 

      Competitors in the provision of information for the financial markets
include Bloomberg L.P. ("Bloomberg"); Bridge Information Systems ("Bridge"); Dow
Jones Markets (formerly Dow Jones Telerate), a subsidiary of Dow Jones Company,
Inc. ("Dow Jones"); ICV Datastream International Ltd. ("Datastream"), a
subsidiary of Primark Corporation; Quick Corporation of Japan; Automatic Data
Processing Inc.; and Telekurs A.G. of Switzerland. In the provision of
information management systems, Reuters competes with Misys plc; British
Telecommunications plc; CSK Software, a subsidiary of CSK Corporation; Dow Jones
Markets, SunGard Data Systems Inc. and a large number of other vendors.

Transaction Products 
-------------------- 

      The Electronic Broking Service ("EBS"), which includes FX Trader, and Dow
Jones Markets compete with Dealing 2000-1. EBS also competes with the foreign
exchange spot matching service provided by Reuters Dealing 2000-2. The EBS
partnership comprises a number of leading European, US and Japanese banks.

      In the provision of equity transaction products, Instinet competes with,
among others, the SelectNet System of the National Association of Securities
Dealers, Inc. (the "NASD"), which enables NASD members to trade electronically
in OTC stocks, and other so-called "electronic communications networks"
("ECNs"), including Bloomberg Tradebook L.L.C., a subsidiary of Bloomberg, and
the Island System. In December 1997, the NASD filed proposed rule changes
designed to implement a new integrated order-delivery and execution system,
called "Next Nasdaq". Next Nasdaq would, among other things, create a central
limit
                                       8
<PAGE>

order book functionality within the Nasdaq Stock market, Inc. ("Nasdaq").
In January 1998 Nasdaq and Optimark Technologies, Inc. ("Optimark") announced an
agreement in principle to integrate Optimark's order matching technology
directly into Next Nasdaq. In its capacity as a broker-dealer, Instinet competes
with other broker-dealers (including many of its own customers) for
institutional order flow. In addition, the securities exchanges (including the
Tradepoint Investment Exchange in the UK) and other broker-dealers offer
competing crossing services.

Media Products, Television and Professional Products 
---------------------------------------------------- 

      Competition for the supply of news to the media comes from Associated
Press, Bloomberg, Agence France Presse and a number of other news agencies and
national newspapers which syndicate their news. Competition for the supply of
news pictures comes mainly from Associated Press, Agence France Presse and the
European Press Agency. The main competitors to Reuters Television are Worldwide
Television News, an agency controlled by the American Broadcasting Company, and
Associated Press Television. 

      The principal competitors for the supply of professional products are
LEXIS-NEXIS, Financial Times Electronic Publishing, The Dialog Corporation and
Dow Jones News Retrieval.

                             Government Regulations
                             ----------------------

Information Products 
--------------------

      Reuters Limited is regulated as a service company by the UK Financial
Services Authority (the successor regulatory body to the UK Securities and
Investments Board) under the Financial Services Act 1986.

      The use of communications links is subject to government regulation and/or
licensing in every country.

Transaction Products 
-------------------- 

      As registered broker-dealers and members of the NASD and various other
self-regulatory organizations in the US and other countries in which they
operate, Instinet and Instinet affiliates using the Instinet System are subject
to substantial regulation under the US securities laws and their equivalents in
other countries, including net capital requirements.

      In January 1997 the US Securities and Exchange Commission ("SEC")
implemented rules governing market-maker and exchange specialist usage of
Instinet and other ECNs. See "Operating and Financial Review -- Cautionary
Statements -- SEC Rules on ECN usage" incorporated herein by reference from the
1997 Annual Report to Shareholders. 

      RTSL is subject to regulation by the Bank of England equivalent to that
applied to broking participants in the London foreign exchange market, including
capital adequacy requirements. The operations of its Singapore branch are
regulated by the Monetary Authority of Singapore.

                                       9
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY
-------------------------------

      Reuters principal properties are its corporate headquarters in London, its
two global technical centers in London and Geneva and its two other main
technical centers in New York and Singapore. The London and New York properties
are situated on land owned by Reuters, whereas the buildings in Geneva and
Singapore were built by Reuters on leased land. The leases, including periods
covered by options to extend, expire in 2095 and 2050, respectively.

      On February 13, 1998 Reuters entered into a joint venture with Rudin Times
Square Associates, LLC to develop an 855,000 square foot building in the Times
Square section of New York City, to be known as "The Reuters Building". Each
party will invest approximately US$45 million of equity, with other costs to be
funded through a loan. The total cost of the project is estimated to be
approximately US$360 million. In connection with the transaction Reuters expects
to obtain approximately US$25 million in tax incentives from the City and State
of New York to remain in the city, half of which is linked to retention of jobs
and half to growth above 1997 headcount levels.


ITEM 3. LEGAL PROCEEDINGS
-------------------------

      On August 14, 1997, the United States Court of Appeals for the Second
Circuit unanimously upheld an order of the United States District Court for the
Southern District of New York granting summary judgment in favor of Reuters
America Inc. in a previously disclosed lawsuit brought by a former employee,
Timothy F. Scala. No further appeal was timely made. 

      For information concerning a grand jury investigation regarding Reuters
Analytics Inc., a US subsidiary based in Stamford, Connecticut, see "Operating
and Financial Review -- Cautionary Statements -- Reuters Analytics" and Note 31
of Notes on the Consolidated Balance Sheet, both incorporated herein by
reference from the 1997 Annual Report to Shareholders.

      In addition, Reuters and its subsidiaries are parties to legal proceedings
that are considered to be either ordinary routine litigation incidental to their
business or not material to Reuters consolidated financial position.


ITEM 4. CONTROL OF REGISTRANT
-----------------------------

Capital Reorganization
----------------------

      On February 18, 1998 Reuters Holdings consummated a court-sanctioned
capital reorganization under which holders of Reuters Holdings' ordinary shares
of 2.5p each ("Reuters Holdings Shares") on the register on February 17, 1998
received, in exchange for such shares, cash and ordinary shares of 25p each of
Reuters Group ("Ordinary Shares"), on the following basis:

      For every 15 Reuters Holdings Shares held - (pound)13.60 in cash and 13
Ordinary Shares.

      Similarly, holders of American Depositary Shares, each representing six
Reuters Holdings Shares ("Reuters Holdings ADSs") on the register on February
17, 1998 received:

      For every 15 Reuters Holdings ADSs held - $133.17 in cash (the US dollar
equivalent of (pound)81.60 on February 23, 1998) and 13 American Depositary
Shares, each representing six Ordinary Shares ("ADSs")

      In addition, the existing Founders Share of (pound)1 in Reuters Holdings
was cancelled and a new Founders Share of (pound)1 in Reuters Group with
identical rights (the "Founders Share") was issued to Reuters Founders Share
Company Limited (the "Founders Share Company").

                                       10
<PAGE>
General
-------

      The Memorandum and Articles of Association of Reuters Group (the
"Articles") contain two sets of restrictions relating to the ownership of
Reuters Group shares that are intended to ensure continued compliance with the
following principles (the "Reuter Trust Principles") in a manner appropriate for
a public company:

   I.   that Reuters shall at no time pass into the hands of any one interest,
        group or faction;

   II.  that the integrity, independence and freedom from bias of Reuters shall
        at all times be fully preserved;

   III. that Reuters shall supply unbiased and reliable news services to
        newspapers, news agencies, broadcasters and other media subscribers and
        to businesses, governments, institutions, individuals, and others with
        whom Reuters has or may have contracts;

   IV.  that Reuters shall pay due regard to the many interests which it serves
        in addition to those of the media; and

   V.   that no effort shall be spared to expand, develop and adapt the news and
        other services and products of Reuters so as to maintain its leading
        position in the international news and information business.

      For purposes of the Reuter Trust Principles, the term "Reuters" means
Reuters Group and every subsidiary of Reuters Group from time to time supplying
news services. Reuters believes that the observance of the Reuter Trust
Principles is compatible with its ability to achieve its financial objectives
and to operate its business in the interest of its shareholders generally.

      The first set of restrictions contained in the Articles applies to persons
that become "interested" in 15% or more of the Ordinary Shares outstanding at
any time. The term "interested" is defined in the Articles by reference to
provisions of the Companies Act 1985 of Great Britain, as amended (the
"Companies Act"), which require persons to disclose to public companies
interests in voting shares in excess of a prescribed percentage. (At present,
material interests of 3% of the class and other interests of 10% of the class
must be disclosed.) Subject to certain exceptions, all shares held by a person
who reaches the 15% limit will be disenfranchised. Moreover, Reuters Group is
empowered to effect an involuntary disposition of the number of shares by which
a person exceeds the 15% limit if that person fails to do so on demand (which
involuntary disposition may be made, if appropriate, by means of an instruction
to effect an electronic transfer of uncertificated shares). 

      Second, Reuters Group share capital includes the Founders Share which is
held by the Founders Share Company, a company limited by guarantee consisting of
individuals (the "Reuter Trustees") who constitute both its members and
directors. The Founders Share empowers the Founders Share Company to cast such
number of votes as will pass any resolution supported by, and defeat any
resolution opposed by, the Founders Share Company if it believes that any person
or persons have obtained, or are seeking to obtain, control of Reuters. Control
for these purposes is defined as the ability to control the exercise of 30% or
more of the votes that may be cast on a poll at general meetings. The Founders
Share also empowers the Founders Share Company to cast such number of votes as
will defeat any resolution opposed by it that would alter any provision of the
Articles relating to the Reuter Trust Principles or to the rights of the
Founders Share. See "Principal Shareholders -- The Founders Share" below.

      The restrictions on "interests" in Ordinary Shares and the extraordinary
voting rights of the Founders Share may be characterized as "anti-takeover"
provisions to the extent they are intended to prevent a bid for control of
Reuters. Tender offers or other non-market acquisitions of shares are usually
made at prices above the prevailing market price of a company's shares.
Acquisitions of shares by persons attempting to acquire control through market
purchases may support the price of shares at market levels higher than otherwise
would be the case. The "anti-takeover" provisions applicable to Reuters may be
expected to preclude such offers.

                                       11
<PAGE>
                             Principal Shareholders
                             ----------------------
Ordinary Shares
---------------

      As of February 18, 1998, after giving effect to the capital
reorganization, there were 1,407,146,996 Ordinary Shares outstanding, excluding
10,184,697 Ordinary Shares owned by certain Employee Share Ownership Trusts. See
Note 18 of Notes on the Consolidated Balance Sheet, incorporated herein by
reference from the 1997 Annual Report to Shareholders. As of that date, no
person or group had disclosed an interest (as defined in the Companies Act) in
the Ordinary Shares of Reuters Group. On that date, to Reuters knowledge, all
directors and officers of Reuters as a group (23 persons) had an interest in an
aggregate of 1,378,948 Ordinary Shares, representing approximately 0.1% of the
total outstanding, excluding an aggregate of 2,396,883 Ordinary Shares that may
be acquired by directors and officers pursuant to the share option and
restricted share and share rights schemes referred to in Item 12 of this Report.

The Founders Share
------------------

      Ownership of the Founders Share is restricted to the Founders Share
Company. Seven of the current Trustees were appointed by four news associations:
The Press Association Limited, NPA Nominees Limited, AAP Information Services
Pty Limited, and New Zealand Press Association Limited, (collectively, the
"Associations"). In accordance with certain 1995 amendments to the Articles of
Association of the Founders Share Company, future Reuter Trustees are to be
nominated by a Nomination Committee consisting of (i) the five longest serving
Reuter Trustees, (ii) the Chairman of the Reuter Trustees (unless included under
clause (i) above), (iii) one person nominated by each of the Associations, (iv)
two persons appointed by the Chairman of Reuters, and (v) two persons appointed
by the Chairman of the Nomination Committee after consultation with (and who are
acceptable to) the European Commission on Human Rights. Notwithstanding clause
(iii) above, none of the Associations may nominate a member of the Nomination
Committee pursuant to that clause while any of its appointments are included in
the Nomination Committee by virtue of clause (i) or clause (ii) above. Reuter
Trustees may not be directors or employees of Reuters.


      The Articles of Association of the Founders Share Company require that the
Reuter Trustees generally act in accordance with the Reuter Trust Principles and
endeavor to ensure compliance with the Reuter Trust Principles insofar as the
Reuter Trustees are able to do so by the proper exercise of their powers,
including the exercise of the voting rights of the Founders Share. Reuters is
required to reimburse the reasonable expenses of the Reuter Trustees and to
indemnify the Founders Share Company in respect of all expenses incurred by it,
including those incurred in enforcing the Reuter Trust Principles.

The Reuter Trustees currently in office are as follows:


Trustee                                                     Since
-------                                                     -----

The Right Hon. the Lord Browne-Wilkinson                    1989
Sir Michael Checkland                                       1994
Claude Neville David Cole CBE                               1983
John Elliott Christopher Dicks                              1985
Pehr Gustaf Gyllenhammar                                    1997
Sir John Gordon Seymour Linacre CBE, AFC, DFM               1986
Kenneth Morgan OBE                                          1984
Sir Frank Jarvis Rogers.(Chairman)                          1989
The Right Hon. The Viscount Rothermere                      1979
Arthur Ochs Sulzberger                                      1994
Ernest James Lyle Turnbull AO                               1993
Richard John Winfrey                                        1987


      All of the current Reuter Trustees were nominated pursuant to the
procedures in force prior to 1995, except for Mr. Gyllenhammar who was nominated
by the Nomination Committee referred to above.

                                       12
<PAGE>
      Each Reuter Trustee is normally required to retire at the Annual General
Meeting ("AGM") of the Founders Share Company following the fifth anniversary of
his nomination or last renomination and will be eligible for renomination
(unless he has reached the age of 75).


ITEM 5. NATURE OF TRADING MARKET
--------------------------------

      The Ordinary Shares are traded on the London Stock Exchange and the ADSs
are included for trading in the NASDAQ National Market System. The ADSs are
evidenced by American Depositary Receipts ("ADRs") issued by Morgan Guaranty
Trust Company of New York, as Depositary under a Deposit Agreement, dated as of
February 18, 1998 (the "Deposit Agreement"), among Reuters, the Depositary and
the holders from time to time of ADRs.

      The table below sets forth, for the periods indicated, (i) the reported
high and low sales prices for Reuters Holdings Shares based on the Daily
Official List of the London Stock Exchange and (ii) the reported high and low
sales prices of the Reuters Holdings ADSs on NASDAQ, except that the price
information included for February 18, 1998 (6.25/6.06 pounds per share;
$65-5/8/$60 per ADS) gives effect to the capital reorganization and is for the
Reuters Group Ordinary Shares and ADSs. The number of Ordinary Shares and ADSs
delivered in the capital reorganization was set to, among other things,
facilitate comparability of share price with the Reuters Holdings Shares and
Reuters Holdings ADSs, respectively. Accordingly, the prices for prior periods
have not been restated. However, see Note (1) to the table of Consolidated
Income Statement Data, Amounts in Accordance with US GAAP in Item 8 of this
Report, with respect to the US GAAP treatment of the capital reorganization and
its retroactive effect on the number of shares outstanding and per share
amounts.



                              The London Stock Exchange          NASDAQ
                              -------------------------    ------------------
                                  Pounds Per Share         US Dollars per ADS
                              -------------------------    ------------------
                                   High      Low            High         Low
                                   ----      ---            ----         ---
1996
First Quarter                      7.28      5.84           66-1/2      54-5/8
Second Quarter                     8.18      7.30           72-3/4      65-5/8
Third Quarter                      7.92      6.64           73-1/2      62-3/16
Fourth Quarter                     8.09      6.50           76-7/8      66-7/8

1997
First Quarter                      7.57      5.98           76-3/4          58
Second Quarter                     7.07      5.73           69-1/2          56
Third Quarter                      7.40      5.55           71-1/2      56-3/4
Fourth Quarter                     7.82      5.90           75-5/8          60

1998
First Quarter (to February 18)     6.94      5.18           67-1/8      50-1/4

      As of February 18, 1998, 510,754 Ordinary Shares and ADRs evidencing
50,314,430 ADSs (representing 301,886,580 Ordinary Shares) were held of record
in the US. These Ordinary Shares and ADRs were held by 105 record holders and
3,155 record holders, respectively, and represented 0.04% or evidenced ADSs
representing 21.3%, respectively, of the total number of Ordinary Shares
outstanding. Since certain of these Ordinary Shares and ADRs were held by
brokers or other nominees, the number of record holders in the US may not be
representative of the number of beneficial holders or of where the beneficial
holders are resident.

                                       13
<PAGE>
ITEM 6. EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS
--------------------------------------------------------------------------

      There are currently no UK foreign exchange control restrictions on
remittances of dividends on Ordinary Shares or on the conduct of Reuters
operations.

      Under English Law and Reuters Articles persons who are neither residents
nor nationals of the UK may freely hold, vote and transfer their Ordinary Shares
in the same manner as UK residents or nationals.

ITEM 7. TAXATION
----------------

      The following discussion of taxation is intended only as a descriptive
summary and does not purport to be a complete technical analysis or listing of
all potential tax effects relevant to the Ordinary Shares or ADRs. The
statements of UK and US tax laws set forth below are based on the laws and the
UK Inland Revenue practice in force as of the date of this Report and take
account of the changes to the tax treatment of dividends resulting from
provisions in the Finance (No. 2) Act 1997, which will become effective in
relation to dividends paid on or after 6 April 1999. The statements herein are
also subject to any other changes in UK or US law, and in any double taxation
convention between the US and the UK, occurring after the date of this Report.


UK Taxation of Dividends -- Refund of Tax Credits 
-------------------------------------------------

Position before 6 April 1999
----------------------------

      General: When paying a dividend on Ordinary Shares, Reuters will be liable
to pay to the UK Inland Revenue advance corporation tax ("ACT") currently at a
rate equal to 25% of the cash dividend paid. UK resident individual shareholders
are entitled to a tax credit equal to the ACT paid against such individual
shareholder's total income tax liability or, in appropriate cases, a cash refund
of the ACT paid.

      Under the terms of the UK/US Double Taxation Convention 1975, a US
resident individual or corporate portfolio holder of an Ordinary Share or ADR
who is not also resident in the UK for UK tax purposes (a "US holder") generally
will be entitled to receive from the UK Inland Revenue payment of a refund
("Refund") of the tax credit available to UK resident shareholders currently at
a rate equal to 25% of the cash dividend. A 15% withholding tax will be imposed
on the sum of the dividend plus the Refund (the "Gross Dividend"). For example,
at current rates, a (pound)80 dividend results in a (pound)20 Refund. The Gross
Dividend of (pound)100 ((pound)80 plus (pound)20) is subject to a UK withholding
tax of (pound)15. Thus, the US holder receives (pound)85.

      These provisions do not apply to (i) shareholders whose holding of
Ordinary Shares or ADRs is effectively connected with a permanent establishment
or fixed place of business in the UK, (ii) under certain circumstances, an
investment or holding company, 25% or more of the capital of which is owned,
directly or indirectly, by persons that are neither individual residents nor
citizens of the US and (iii) under certain circumstances, a corporation which,
alone or together with one or more associated corporations controls, directly or
indirectly, 10% or more of the voting stock of Reuters.

      Arrangements for Payment of Refund: Reuters Group is currently confirming
the application to the reorganized share capital of certain arrangements which
Reuters Holdings had with the UK Inland Revenue. Confirmation is expected before
payment of the final dividend in respect of 1997. On this basis, subject to
certain exceptions, the Refund will be paid by Reuters to a US holder together
with, and at the same time as, the associated dividend. To establish its
entitlement to the Refund, the US holder must complete the declaration on the
reverse of the dividend check and present the check for payment within three
months from the date of its issue. In the case of ADRs or Ordinary Shares held
through The Depository Trust Company ("DTC"), a declaration as to the conditions
entitling the beneficial US holder to the Refund should be completed by the
broker-dealer or bank member of DTC which holds the Ordinary Shares or ADRs on
behalf of such US holder. These arrangements can be terminated without notice by
the UK Inland Revenue.

      A US holder who does not come within these arrangements may obtain the
Refund by filing a claim for refund directly with the UK Inland Revenue, in the
manner and at the time described in US Revenue Procedure 80-18, 1980-1 C.B. 623
and US Revenue Procedure 81-58, 1981-2 C.B. 678, summarized below. 
  
                                     14
<PAGE>

Claims for payment must be made within six years of the UK year of assessment
(generally, the 12-month period ending April 5 in each year) in which the
related dividend was paid. The first claim by a US holder for an Refund must be
made by sending the appropriate UK form in duplicate to the Director of the US
Internal Revenue Service Center with which the shareholder's last federal income
tax return was filed. Forms may be obtained by writing to the US Internal
Revenue Service, Assistant Commissioner International, 950 L'Enfant Plaza South,
S.W., Washington, D.C. 20024, Attention: Taxpayers Service Division. Because a
refund claim is not considered made until the UK tax authorities receive the
appropriate form from the US Internal Revenue Service, forms should be sent to
the US Internal Revenue Service well before the end of the applicable limitation
period. Any subsequent claims by a US holder for payment of a Refund should be
filed directly with the UK Financial Intermediaries and Claims Office, Fitzroy
House, PO Box 46, Nottingham NG2 1BD, England.

      Certain provisions of the UK Income and Corporation Taxes Act 1988 empower
the UK Government to deny the payment of tax credits in circumstances where (i)
a corporate shareholder which, either alone or together with one or more
associated corporations, controls, directly or indirectly, 10% or more of the
voting stock of the UK company and (ii) such shareholder or an associated
company has a qualifying presence in a jurisdiction which operates a unitary
system of corporate taxation. These provisions are only triggered if the UK
Treasury so determines by Statutory Instrument and no such Instrument has yet
been made. However, the UK Chancellor announced in 1994 that the UK will be
retaining its retaliatory powers against the possibility of harm to the
interests of UK-owned companies in the future. 

Position on and after 6 April 1999
----------------------------------
 
      The UK Government has invited comments on a proposal to abolish ACT with
effect from April 6, 1999, so that if the proposal is implemented no ACT would
be payable by Reuters on payment of a cash dividend on or after that date. The
proposal, however, envisages a system of "shadow ACT" to govern the rate at
which companies can utilise surplus ACT.

      On and after April 6, 1999, the tax credit on cash dividends paid by
Reuters on Ordinary Shares would be reduced to one-ninth of the cash dividend
(or 10% of the Gross Dividend). The tax credit may be set off against a UK
resident individual shareholder's total income tax liability, but no cash refund
would be available.

      Accordingly, a US holder would effectively cease to be entitled to any
Refund in respect of dividends, as the 15% withholding tax under the Treaty will
exceed (but will be limited to) the tax credit to which the Treaty otherwise
entitles him. Hence, using the example set out above, a (pound)80 cash dividend
would result in a US holder receiving (pound)80 after deduction of withholding
tax of (pound)8.89.

US Taxation Consequences. 
------------------------

      The Gross Dividend generally will be treated as dividend income for US
federal income tax purposes. Such dividends will not be eligible for the 70%
dividends received deduction allowed to US corporations. However, the
withholding tax will be eligible, subject to certain limitations, for credit
against the holder's US federal income tax. In most cases, such credit should
reduce the US federal income taxes on the dividend by the full amount of the
withholding tax. US Treasury regulations under certain circumstances impose a
special tax return disclosure obligation on holders who claim the benefits of
the US foreign tax credit on their US federal income tax returns. US holders
should consult their tax advisors as to the methods of compliance with such
disclosure obligations. Under recently enacted legislation, a US holder will be
denied a foreign tax credit (and instead allowed a deduction) for foreign taxes
imposed on a dividend if the US holder has not held the Ordinary Shares or ADRs
for at least 16 days in the 30-day holding period beginning 15 days before the
ex-dividend date. Any days during which a US holder has substantially diminished
its risk of loss on the Ordinary Shares or ADRs are not counted toward meeting
the 16 day holding period required by the statute. A US holder that is under an
obligation to make related payments with respect to the Ordinary Shares or ADRs
(or substantially similar or related property) also is not entitled to claim a
foreign tax credit with respect to a foreign tax imposed on a dividend.

                                       15
<PAGE>
Taxation of Capital Gains 
------------------------- 

      The following categories of persons may be liable for both UK and US tax
in respect of a gain on the sale of Ordinary Shares or ADRs: (i) US citizens
ordinarily resident in the UK, (ii) US corporations resident in the UK by reason
of their business being managed or controlled in the UK and (iii) US citizens or
corporations which are trading or carrying on a profession or vocation in the UK
through a branch or agency which constitutes a permanent establishment or fixed
base and which have used, held or acquired the Ordinary Shares or ADRs for the
purposes of such trade, profession or vocation or such branch or agency.
However, subject to applicable limitations, such persons may be entitled to a
tax credit against their US federal income tax liability for the amount of UK
capital gains tax or UK corporation tax on chargeable gains (as the case may be)
which is paid in respect of such gain. US holders who hold Ordinary Shares or
ADRs as capital assets will generally recognize long-term capital gain or loss
if such holder has held the shares for more than one-year on the date of
disposition. Under recently enacted legislation, the tax rate applicable to
long-term capital gains will vary depending upon whether the Ordinary Shares or
ADRs have been held for more than 18 months.

Information Reporting and Backup Withholding 
-------------------------------------------- 

      Payment of dividends and other proceeds with respect to the Ordinary
Shares or ADRs by a US paying agent or other US intermediary will be reported to
the US Internal Revenue Service and to the US holder as required under
applicable regulations. A US holder will not be subject to US backup withholding
tax at the rate of 31% with respect to dividends received or the proceeds of a
sale, exchange or redemption of such Ordinary Shares or ADRs if such holder (i)
is a corporation or other exempt recipient or (ii) the holder provides a US
taxpayer identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with any applicable backup withholding
requirements.

UK Inheritance Tax 
------------------ 

      An individual who is domiciled in the US for the purposes of the UK/US
estate and gift tax convention and who is not a national of the UK for the
purposes of this convention generally will not be subject to UK inheritance tax
in respect of the Ordinary Shares or ADRs on the individual's death or on a gift
of the Ordinary Shares or ADRs during the individual's lifetime. However, the
individual will be subject to UK inheritance tax if the Ordinary Shares or ADRs
are part of the business property of a permanent establishment of the individual
in the UK or pertain to a fixed base in the UK of an individual who performs
independent personal services. Special rules apply to Ordinary Shares or ADRs
held in trust. In the exceptional case where the disposition is subject both to
UK inheritance tax and to US federal gift or estate tax, the convention
generally provides for the tax paid in the UK to be credited against tax liable
to be paid in the US.


UK Stamp Duty and Stamp Duty Reserve Tax 
---------------------------------------- 

      No UK stamp duty will be payable on the transfer of an ADR provided that
the instrument of transfer is executed and remains outside the UK and does not
relate to any matter or thing done or to be done in the UK, nor will UK stamp
duty reserve tax ("SDRT") be imposed in respect of any agreement for such a
transfer of ADRs.

      Ad valorem stamp duty will be charged on conveyances or transfers of
Ordinary Shares at the rate of 50p per L100 (or part thereof) of the
consideration, if any, for the transfer.

      SDRT will be imposed, at the rate of 0.5% of the consideration for the
transfer, if an agreement is made for the sale of Ordinary Shares, unless an
instrument of transfer of the Ordinary Shares in favor of the purchaser or its
nominee is executed and duly stamped on the day that the agreement is made (or,
in a case where the agreement is conditional, on the day that the condition is
satisfied). SDRT is in general payable by the purchaser of Ordinary Shares, but
there are regulations which provide for collection from other persons in certain
circumstances.

                                       16
<PAGE>
      Ad valorem stamp duty or SDRT will be imposed on any instrument
transferring Ordinary Shares to a nominee or agent for a depositary which issues
depositary receipts (such as the ADRs). In these circumstances, stamp duty or
SDRT will be charged at the higher rate of 1.5% of the consideration for a sale
or, otherwise, 1.5% of the market value of the security transferred. This rate
of duty can be reduced to 1% in the case of certain transfers effected by a
qualified dealer in securities (as defined in the UK Finance Act 1986).
Clearance services may elect, under certain conditions, for the normal rates of
stamp duty or SDRT to apply to transfers into or transactions within the service
instead of the higher rate applying to an issue or transfer into the clearance
service. The UK Finance Act 1997 contains provisions which will remove this
reduced rate of duty from the "appointed day" (yet to be determined).

      A transfer of Ordinary Shares from a depositary or its agent or nominee to
a transferee which results in the cancellation of the ADR, which cancellation is
liable to duty as a "conveyance on sale" because it completes a sale of such
Ordinary Shares, will be liable to ad valorem stamp duty, payable by the
transferee, at the rate of 50p per 100 (or part thereof) of the consideration,
if any, for the transfer. A transfer of Ordinary Shares from a depositary or its
agent or nominee to the ADR holder which results in cancellation of the ADR but
where there is no transfer of beneficial ownership is not liable to duty as a
"conveyance on sale", but will be liable to a fixed stamp duty of 50p.


ITEM 8. SELECTED FINANCIAL DATA 
------------------------------- 

      The selected financial information set forth below is derived, in part,
from the Consolidated Financial Statements incorporated by reference from the
1997 Annual Report to Shareholders, which is filed as an exhibit to this Report.
The selected data should be read in conjunction with the financial statements
and related notes, as well as the Operating and Financial Review incorporated
herein by reference from the 1997 Annual Report to Shareholders.

      The Consolidated Financial Statements are prepared in accordance with UK
GAAP, which differ in certain respects from US GAAP. A summary of the principal
differences between UK and US GAAP, a reconciliation to US GAAP and a condensed
US GAAP balance sheet are set forth in the Consolidated Financial Statements,
appearing on pages 80 to 82 of the 1997 Annual Report to Shareholders, and are
incorporated herein by reference.

                                       17
<PAGE>
Consolidated Income Statement Data:

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                             -----------------------
                                                                  1997     1996      1995      1994       1993
                                                                  ----     ----      ----      ----       ----
                                                                   (in pound millions, except per share data)
Amounts in accordance with UK GAAP:
<S>                                                             <C>       <C>       <C>        <C>       <C>
Revenue                                                          2,882     2,914     2,703     2,309      1,874

Operating profit before goodwill amortization and interest         592       641       551       461        380

Profit on ordinary activities before taxation (1)                  626       652       558       481        422

Profit on ordinary activities after taxation(1)                    390       442       373       319        282

Profit attributable to ordinary shareholders (1)                   390       442       373       318        281
                                                               =======   =======   =======   =======    =======
Earnings per ordinary share (1)                                  24.0p     27.3p     23.2p     19.9p      16.9p
                                                               =======   =======   =======   =======    =======
Earnings per ADS (1)                                            144.2p    164.0p    139.3p    119.4p     101.4p
                                                               =======   =======   =======   =======    =======
Dividends declared per ordinary share (including UK tax credit)  16.3p     14.7p     12.3p     10.0p       8.1p
                                                               =======   =======   =======   =======    =======
Dividends declared per ADS (including UK tax credit)             97.5p     88.1p     73.5p     60.0p      48.8p
                                                               =======   =======   =======   =======    =======
Weighted average number of ordinary shares (in millions)         1,622     1,616     1,605     1,602      1,665
                                                               =======   =======   =======   =======    =======
</TABLE>

--------------
   (1)  In 1997 Reuters adopted the UK Financial Reporting Standard No 10
        `Goodwill and Intangible Assets'. This Standard requires purchased
        goodwill and intangible assets to be capitalised and amortised through
        the profit and loss account over their useful economic lives.
        Accordingly, all goodwill previously written off against reserves has
        been capitalised and amortised, and prior years have been restated in
        line with the standard's transitional provisions. Amortisation periods
        are consistent with those used under US GAAP, thus goodwill ceases to be
        a US GAAP adjustment except where affected by timing differences in the
        recognition of deferred consideration. (See Note 1 of Notes on the
        Consolidated Profit and Loss Account, incorporated herein by reference
        from the 1997 Annual Report to Shareholders.)
  
                                     18
<PAGE>
Consolidated Income Statement Data (continued):

<TABLE>
<CAPTION>
                                                                                      Year Ended December 31,
                                                                                      -----------------------
                                                                           1997      1996      1995      1994      1993
                                                                           ----      ----      ----      ----      ----
                                                                            (in pound millions, except per share data)
Amounts in accordance with
US GAAP
<S>                                                                     <C>        <C>       <C>        <C>       <C>
Revenue                                                                    2,882     2,914     2,703     2,309     1,874

Income before taxes on income                                                618       645       544       463       389

Net income                                                                   386       440       366       303       259
                                                                         =======   =======   =======   =======   =======
Basic earnings per ordinary share (1)                                      23.8p     27.2p     22.8p     18.9p     15.5p

Diluted earnings per ordinary share (1)                                    23.6p     26.8p     22.5p     18.6p     15.3p

Basic earnings per ADS (1)                                                142.6p    163.2p    136.9p    113.4p     93.2p

Diluted earnings per ADS (1)                                              141.6p    161.0p    134.9p    111.6p     92.1p

Dividends paid per ordinary share (including UK tax credit) (1)            15.1p     12.8p     10.5p      8.6p      7.2p
                                                                         =======   =======   =======   =======   =======
Dividends paid per ADS (including UK tax credit) (1)                       90.8p     76.9p     63.0p     51.4p     43.4p
                                                                         =======   =======   =======   =======   =======
Weighted average number of ordinary shares (in millions) (1)               1,623     1,616     1,605     1,602     1,665
                                                                         =======   =======   =======   =======   =======
</TABLE>
------------------
   (1)  On February 18, 1998 Reuters Holdings consummated a capital
        reorganization (see Item 4 of this Report). Under US GAAP this
        transaction is deemed a share consolidation combined with a special
        dividend and requires retroactive restatement of earnings per share and
        per ADS and dividends per share and per ADS amounts. However, the
        consummation of the transaction was subsequent to completion of the
        financial statements incorporated by reference from the 1997 Annual
        Report to Shareholders in response to Item 18 of this Report, and
        therefore no such restatements appear in those financial statements.
        Moreover, under UK GAAP no restatement would be deemed appropriate as
        the cash payment is considered a repurchase of shares and the number of
        new shares in Reuters Group has been set to facilitate comparability of
        per share amounts with those of Reuters Holdings. If the transaction had
        been effected prior to completion of the financial statements, and the
        retroactive treatment under US GAAP had been reflected above, earnings
        and dividends per share and per ADS presented for each period would have
        been approximately 15% higher. For additional information relating to
        the capital reorganization see Note 30 of Notes on the Consolidated
        Balance Sheet incorporated herein by reference from the 1997 Annual
        Report to Shareholders.
                                       19
<PAGE>
Consolidated Balance Sheet Data:

<TABLE>
<CAPTION>
                                                              Year Ended December 31,
                                                              -----------------------
                                                   1997      1996      1995      1994      1993
                                                   ----      ----      ----      ----      ----
                                                    (in pound millions, except per share data)
Amounts in accordance with UK GAAP:
<S>                                              <C>       <C>       <C>       <C>       <C>
Total assets(1)                                   2,836     2,536     2,369     1,882     1,537
Long-term debt and provisions for charges            65        71       162       109        51
Capital employed before minority interest(1)      1,661     1,458     1,211       973       785  

Amounts in accordance with US GAAP:
Total assets                                      2,830     2,523     2,288     1,828     1,549
Long-term debt                                       86        84       105        68        40
Shareholders' equity                              1,754     1,561     1,299     1,048       865

</TABLE>

-----------------
   (1)  For UK GAAP purposes, total assets and capital employed before minority
        interest for the years prior to 1997 have been restated for the change
        in accounting for goodwill. See Note 1 of Notes on the Consolidated
        Profit and Loss Account, incorporated herein by reference from the 1997
        Annual Report to Shareholders. 

Dividends
---------

      The table below sets forth the amounts of interim, final and total
dividends (excluding any associated UK tax credit discussed in Item 7 of this
Report) paid in respect of each fiscal year indicated. Pound sterling amounts
per share have been translated into US cents per ADS (each representing six
Ordinary Shares) at the Noon Buying Rate on each of the respective payment dates
for such interim and final dividends. The amounts have not been restated for the
capital reorganization consummated on February 18, 1998. See Note (1) to the
table of Consolidated Income Statement Data, Amounts in Accordance with US GAAP,
above.

                            Pence per Share                Cents per ADS
Fiscal year ended           ---------------                -------------
December 31,          Interim   Final     Total     Interim    Final     Total
-----------------     -------   -----     -----     -------    -----     -----

1993                   1.55      4.95      6.50      14.25     44.71     58.96
1994                   1.90      6.10      8.00      17.80     58.56     76.36
1995                   2.30      7.50      9.80      21.39     67.92     89.31
1996                   2.75      9.00     11.75      25.71     87.56    113.27
1997(1)                3.10      9.90     13.00      29.92     

--------------------
   (1)  The final dividend in respect of 1997 will be paid on April 27, 1998 to
        holders of Ordinary Shares on the register at March 20, 1998 and on May
        1, 1998 to holders of ADSs on the register at March 20, 1998, and will
        be translated into US dollars from sterling at the rate prevailing on
        April 27, 1998. 

      Any future dividends will be declared consistent with Reuters policy of
retaining a substantial portion of its earnings for use in its business, and
will be dependent upon Reuters earnings, financial condition and other factors.

                                       20
<PAGE>
                                 Exchange Rates
                                 --------------

      The following table sets forth, for the periods and dates indicated, the
average, high, low and end of period Noon Buying Rates for pounds sterling in US
dollars per (pound)1.

Fiscal year ended
December 31,
                            Average*    High      Low    Period End
                            --------    ----      ---    ----------
1993                          1.50      1.59      1.42      1.48
1994                          1.54      1.64      1.46      1.57
1995                          1.58      1.64      1.53      1.55
1996                          1.57      1.71      1.49      1.71
1997                          1.65      1.70      1.58      1.64
1998 (through February 18)    1.64      1.67      1.61      1.64

* The average of the exchange rates on the last trading day of each calendar
month during the period.

      On February 18, 1998 the Noon Buying Rate was $1.64 per (pound)1.

      Fluctuations in the exchange rate between the pound sterling and the US
dollar will affect the US dollar amounts received by holders of the ADSs upon
conversion by the Depositary of cash dividends paid in pounds sterling on the
Ordinary Shares represented by the ADSs and may affect the relative market
prices of the ADSs in the US and the Ordinary Shares in the UK.

      For the effect on Reuters results of operations of fluctuations in the
exchange rates between the pound sterling and the other major currencies
(including the US dollar) in which revenues are received and expenditures are
made by Reuters, see "Operating and Financial Review" incorporated herein by
reference from the 1997 Annual Report to Shareholders, which is filed as an
exhibit to this Annual Report on Form 20-F.

ITEM 9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
        -----------------------------------------------------------------------

      Reuters discussion and analysis of financial condition and results of
operations appears on pages 36 to 47 of Reuters 1997 Annual Report to
Shareholders under the heading "Operating and Financial Review", incorporated
herein by reference from the 1997 Annual Report to Shareholders.

      The discussion is designed to comply with both the requirements of this
Item 9 and the recommendations of the July 1993 Statement, "Operating and
Financial Review", issued by the UK Accounting Standards Board.

      The focus of Reuters discussion is on the financial statements included in
the 1997 Annual Report to Shareholders, which are prepared in accordance with UK
GAAP. A summary of differences between UK GAAP and US GAAP, a reconciliation to
US GAAP and a condensed US GAAP balance sheet are set forth in the Consolidated
Financial Statements, appearing on pages 80 to 82 of the 1997 Annual Report to
Shareholders, and are incorporated herein by reference. As reported in Item 2
above, Reuters has made certain commitments with respect to the development of a
new building in the Times Square section of New York City.

                                       21
<PAGE>
Cautionary Statements
---------------------

      All statements other than statements of historical fact included in this
Report and the 1997 Annual Report to Shareholders incorporated by reference
herein are, or may be deemed to be, forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 31E of the
Securities Exchange Act of 1934. Certain important factors that could cause
actual results to differ materially from those discussed in such forward-looking
statements are described under "Cautionary Statements" in the "Operating and
Financial Review" incorporated herein by reference from the 1997 Annual Report
to Shareholders, and in the paragraph below. All written and oral
forward-looking statements made on or after the date hereof and attributable to
Reuters are expressly qualified in their entirety by such Cautionary Statements.

      All-Media-Typlan AG, the supplier of key components for certain of Reuters
editorial systems, purported in late February 1998 to terminate its software
license agreements with Reuters for material breach of contract. Reuters does
not accept that Typlan has justifiable grounds for such termination. The
breakdown of this relationship exposes Reuters to various risks associated with
those of its editorial systems which currently depend on Typlan. In particular,
the risks include possible lack of ongoing support and maintenance of the
relevant software by Typlan and potential difficulties that may be encountered
in the implementation of alternative systems.

ITEM 9A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 
------------------------------------------------------------------- 

      Quantitative and qualitative disclosures about market risk are provided
under the sub-heading Treasury Management on pages 44 to 46 of the "Operating
and Financial Review", and in Note 13 of Notes on the Consolidated Cash Flow
Statement, both incorporated herein by reference from the 1997 Annual Report to
Shareholders.

                                       22
<PAGE>
ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT
---------------------------------------------

      Reuters Articles provide for a Board of Directors consisting of not fewer
than five nor more than 15 directors. There are presently 14 directors in
office, including six executive directors. 

      The directors and executive officers of Reuters are as follows:

<TABLE>
<CAPTION>
Name                                    Position                                   Position Held Since
----                                    --------                                   -------------------
<S>                                    <C>                                              <C>
Directors:
Sir Christopher Anthony Hogg            Chairman; Director (1)                            1985; 1984
Peter James Denton Job                  Chief Executive; Director                         1991; 1989
Robert Oscar Rowley                     Finance Director                                  1990
Robert Patten Bauman                    Director (1)                                      1994
Sir John Anthony Craven                 Director (1)                                      1997
Michael Philip Green                    Director (1)                                      1992
Jean-Claude Marchand                    Managing Director of Reuters Europe, Middle East 
                                         and Africa; Director                             1996
Roberto G Mendoza                       Director (1)                                      1998
Richard Lake Olver                      Director (1)                                      1997
John Michael Coldwell Parcell           Director responsible for the Financial 
                                        Information Product Line; Director                1996
Charles James Francis Sinclair          Director (1)                                      1994
David Granger Ure                       Director responsible for Marketing and Technical
                                         Policy; Director                                 1992; 1989
Andre-Francois Helier Villeneuve        Director responsible for Geographical Areas; 
                                        Director                                          1992; 1989
Sir David Alan Walker                   Director (1)                                      1994


Executive Officers:
Patrick Alexander Vellan Mannix         Director of Personnel and Quality Programmes      1992
Gregory Charles Meekings                Managing Director of the Corporate Technology 
                                         Group                                            1996
Jeremy John Harley Penn                 Managing Director of Reuters Asia/Pacific         1997
Michael Otto Sanderson                  Chairman of Reuters America Holdings Inc; 
                                         Chief Executive Officer of Instinet              1995; 1990
Geoffrey Arthur Weetman                 Managing Director of Media and New Business 
                                         Ventures                                         1997
Rosalyn Susan Wilton                    Managing Director, Transaction Products           1992
Mark William Wood                       Editor-in-Chief                                   1989
Philip Kenneth Wood                     Deputy Finance Director                           1994
Simon Anthony Yencken                   Company Secretary and General Counsel             1994; 1993

</TABLE>

-----------------
(1)     Non-executive director.

      The business address of the directors is 85 Fleet Street, London EC4P 4AJ,
England.

      The Chairman and all non-executive directors, except Michael Green and
Roberto Mendoza, served on the Remuneration and Audit Committees of the Board in
1997 and all non-executive directors except Roberto Mendoza served on the
Nomination Committee in 1997. Summaries of the functions of the Remuneration
Committee and the Audit Committee appear on pages 25 and 33, respectively, of
the 1997 Annual Report to Shareholders which is incorporated herein by
reference. During 1997, Reuters maintained insurance for the directors and
certain employees against liabilities in relation to Reuters.

                                       23
<PAGE>
      The Articles require that, in performing their duties, the directors have
due regard for the Reuter Trust Principles insofar as, by the proper exercise of
their powers and in accordance with their other duties as directors, the
directors may do so. For additional information with respect to the Reuter Trust
Principles and the Reuter Trustees, who are charged with ensuring compliance
with them, see Item 4 of this Report.

      The Articles contain provisions that require the Board of Directors to
include at least five non-executive directors before a new executive director
can be appointed.

      At each AGM of Reuters one-third of the directors (or, if their number is
not a multiple of three, the number nearest to but not greater than one-third)
shall retire from office by rotation. A retiring director shall be eligible for
re-election. For additional information see the Report on Remuneration and
Related Matters which appears on pages 25 to 32 of the 1997 Annual Report to
Shareholders referred to above.

      No director is required to hold any shares of Reuters in order to qualify
as a director. A director not holding any shares may nevertheless attend and
speak at general meetings of Reuters.

ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS
-----------------------------------------------

      For the year ended December 31, 1997, the aggregate compensation paid or
accrued by Reuters and its subsidiaries to all directors and officers as a group
(21 persons) for services in all capacities was (pound)7.0 million.

      The aggregate compensation paid to all directors and officers as a group
included (pound)1.1 million relating to an officer's interest in a rolling
four-year profit sharing plan operated by a subsidiary. The remaining executive
directors and officers participated in a bonus plan which, in 1997, provided for
bonuses based one-half on a growth target in earnings per share and one-half on
the number of installations of Reuters new 3000 Series of products. Neither
target was achieved therefore no bonuses were paid under this plan.

      For further information relating to Reuters senior executive remuneration
policy and compensation paid to the Chairman and the executive directors, see
the Report on Remuneration and Related Matters which appears on pages 25 to 32
of the 1997 Annual Report to Shareholders and is incorporated herein by
reference.


ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES
-----------------------------------------------------------------------

      Reuters has established a number of employee share schemes. These include
(i) a long term incentive plan, a performance related share plan and an
international Save As You Earn ("SAYE") plan introduced by Reuters Group in
1997, which have substantially the same terms as Reuters Holdings' 1997 Long
Term Incentive Plan, 1997 Performance Related Share Scheme and 1994 SAYE Scheme,
respectively, referred to below, and (ii) two executive share plans of Reuters
Group (one for use in the US and the other for the rest of the world) which will
be used to provide replacement options to those persons who surrender options
granted under Reuters Holdings' 1984 Executive Schemes referred to below.

      Reuters employee share schemes also include the following plans of Reuters
Holdings in respect of which no further grants of options or rights will be
made, but under which options remain outstanding: (i) a long-term incentive
scheme introduced in 1993 under which non-transferable awards of
performance-based restricted shares or rights exercisable for shares on a one
for one basis (share rights) were made annually to key senior executives (the
"1993 Long-Term Incentive Scheme"), (ii) a long-term incentive plan introduced
in 1997 under which non-transferable awards of performance-based share options
were made annually to key senior executives (the "1997 Long Term Incentive
Plan"), (iii) a long-term incentive scheme introduced in 1995 under which
non-transferable awards of performance-based share rights were made annually to
executives (the "1995 Performance Related Share Scheme"), (iv) a long-term
incentive scheme introduced in 1997 under which non-transferable
performance-based share options were granted annually to executives (the "1997
Performance Related Share Scheme"), (v) a SAYE share option scheme adopted in
1994 (the "1994 SAYE Scheme"), (vi) three SAYE share option schemes adopted in
1984 (the "1984 SAYE Schemes") and (vii) two executive share option schemes
adopted in 1984 (the "1984 Executive Schemes"). For additional information

                                       24
<PAGE>
relating to these plans, see the Report on Remuneration and Related Matters
which appears on pages 25 to 32 of the 1997 Annual Report to Shareholders which
is incorporated herein by reference. 

      In January 1998, in connection with the capital reorganization, mechanisms
were introduced so that, upon exercise of options and rights outstanding under
the Reuters Holdings plans referred to above, the person exercising his option
or right will receive Ordinary Shares of Reuters Group. In addition, the
Long-Term Incentive Scheme referred to in clause (i) above was amended to give
participants the option of taking 40% of their award in cash to enable them to
pay the taxes due on exercise. 

      At an Extraordinary General Meeting to be held April 21, 1998,
shareholders will be asked to approve a new share option plan under which
eligible employees (other than executive directors and part-time staff, whose
participation will be discretionary) will be invited to apply for an option to
acquire up to 2,000 Ordinary Shares at a price equal to the average of the
mid-market value of the shares on the three dealing days immediately preceding
the invitation date. These invitations will be made within six weeks of the
Reuters interim results announcement in July 1998 (and on later announcement
dates for employees who join Reuters after the initial qualification date). No
options under the plan will be granted after July 31, 1999 and no person will
receive an option over more than 2,000 shares. Options will generally become
exercisable on the third anniversary of the date of grant, by holders who have
been employed throughout that three-year period, and will then remain
exercisable for a further four years.

      Reuters also offers an Employee Stock Purchase Plan for most US-based
employees, which Reuters Holdings introduced in 1995 in lieu of implementing a
US version of the 1994 SAYE Scheme. Under this plan, participating employees
authorize after-tax payroll deductions (subject to certain maximum amounts)
which, together with contributions from Reuters equal to 20% of the payroll
deductions, are transferred to a designated broker who, at the end of each pay
period, purchases ADSs at available market prices for the accounts of the
employees.

Outstanding Options and Restricted Shares 
----------------------------------------- 

      All options, restricted shares and share rights outstanding as of the date
of this Report were granted or awarded under the Reuters Holdings schemes
described above. On exercise of these options or rights, an employee will
receive Ordinary Shares in Reuters Group equal in number to the number of
Reuters Holdings Shares he would have received under the relevant scheme.

                                       25
<PAGE>
      Information concerning options, restricted shares and share rights
outstanding under Reuters share option and restricted share schemes at February
18, 1998 is set forth below:

<TABLE>
<CAPTION>
                           Number of Ordinary 
                             Shares Issuable  
                              Upon Exercise       Ranges of Exercise
                          of Options or Subject       Prices per 
                           to Restricted Share      Ordinary Share
                             or Share Right           ((pound)L)           Range of 
Schemes/Plans                  Awards (1)             or ADS ($)       Expiration Dates
-------------                  ----------             ----------       ----------------
Options:
--------
<S>                            <C>              <C>                   <C>
1984 SAYE (2)                    7,084,152         L2.21 -- L3.94        5/98 -- 11/99
                                                 $23.50 -- $34.98       10/98 -- 11/99

1994 SAYE (2)                    9,694,114         L3.51 -- L6.01        4/00 -- 10/02

1984 Executive (3)               2,910,306         L1.17 -- L4.93         2/98 -- 2/04
                                                 $15.94 -- $43.72         3/98 -- 2/04
                                ----------
TOTAL                           19,688,572
                                ==========

Shares subject to 
restrictions or rights:
-----------------------

1993 Long-Term Incentive (4)     1,888,725         Not applicable        2/98 -- 12/02

1997 Long-Term Incentive (5)       518,290            L0 -- L6.40                12/03

1995 Performance Related (6)     1,854,094         Not applicable       12/01 -- 12/02

1997 Performance Related (5)     1,317,122            L0 -- L6.40                12/03
                                 ---------
TOTAL                            5,578,231
                                 =========
</TABLE>

-------------------
(1)     Includes Ordinary Shares represented by ADSs.
(2)     The exercise price of options granted under the 1984 and 1994 SAYE
        Schemes is effectively fixed at 20% below the market price at the start
        of either a three-year or a five-year savings period. In general, these
        options become exercisable at the end of that period and remain
        exercisable for six months thereafter.
(3)     The exercise price of options granted under the 1984 Executive Schemes
        is the market price either at or shortly before the date of grant. Under
        their original terms, these options become exercisable during the period
        commencing on the third anniversary of the date of grant (the second
        anniversary in the case of options issued to US-based employees) and
        ending on either the seventh or the tenth anniversary of the date of
        grant. As a result of the capital reorganization all options expire on
        August 16, 1998, but holders may elect to replace their original options
        with unapproved Reuters Group options that have the same exercise price
        but generally lapse one year later.
(4)     Includes 1,201,296 restricted shares relating to 1993 and 1994 awards
        which are vested. The capital reorganization technically triggered
        immediate release of all vested restricted shares, but as part of the
        terms of the reorganization, all currently employed participants have
        agreed to defer the release of their 1994 awards (510,184 shares) until
        February 1999.
(5)     The 1997 long-term incentive and performance related awards granted in
        the UK (a total of 417,688 shares and 692,064 shares, respectively) have
        an exercise price equivalent to the market value of the underlying
        shares on the date of the grant, and are linked with a cash bonus equal
        to such exercise price. The share rights and linked cash bonus vest and
        are exercisable only in tandem.
(6)     Includes 211,663 options which have vested and are exercisable through
        December 2001.


      Of the total number of Ordinary Shares subject to outstanding options at
February 18, 1998, 191,890 Ordinary Shares were subject to options held by
directors and officers of Reuters, 27,622 of which were granted pursuant to 1994
SAYE Schemes, 13,980 of which were granted pursuant to 1984 SAYE Schemes and
150,288 of which were granted pursuant to the 1984 Executive Schemes. In
addition, Ordinary Shares subject to restrictions or rights held by directors
and officers at February 18, 1998 included 2,109,778 shares awarded

                                       26
<PAGE>
under the 1993 and 1997 long-term incentive plan (929,796 vested) and 95,215
shares awarded under the 1995 and 1997 performance related share plan (20,831
vested).

      At February 18, 1998 options, restricted shares and/or share rights were
held by the Chairman and the executive directors as follows:

                                                            Long-Term Incentive
                                  Savings                      Schemes/Plans
                                  Related     Executive     --------------------
                                  Schemes      Scheme       Vested    Non-vested
                                  -------      ------       ------    ----------

Sir Christopher Hogg               2,065          ---           ---        ---
P.J.D. Job                         2,065          ---       159,976    196,122
J-C. Marchand                      3,098          ---        75,680    115,480
J. M. C. Parcell                   2,065      100,000        66,240     83,286
R.O. Rowley                        2,925          ---        98,936    122,045
D.G. Ure                             ---          ---       109,480    130,550
A-F.H. Villeneuve                  2,065          ---       109,480    130,550


      For additional information concerning options, restricted shares and share
rights held by the executive directors, see the Report on Remuneration and
Related Matters, incorporated herein from the 1997 Annual Report to
Shareholders.

ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS 
------------------------------------------------------- 

      Not applicable.


                                    PART II
                                    -------

ITEM 14. DESCRIPTION OF SECURITIES TO BE REGISTERED
---------------------------------------------------

      Not applicable. However, information responding to this Item has been
filed with the SEC concurrently with this Annual Report on Form 20-F, under
cover of a Form 6-K for the month of March 1998.


                                    PART III
                                    --------

ITEM 15. DEFAULTS UPON SENIOR SECURITIES
----------------------------------------

      Not applicable.


ITEM 16. CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED SECURITIES
--------------------------------------------------------------------------------

      Not applicable.

                                    PART IV
                                    -------

ITEM 18. FINANCIAL STATEMENTS
-----------------------------

      Reference is made to Item 19 for a list of all financial statements filed
as part of this Report.

                                       27
<PAGE>

ITEM 19. FINANCIAL STATEMENTS AND EXHIBITS
------------------------------------------

(a) Financial Statements:
                                                               Annual Report to
                                                                 Shareholders
                                                                 ------------
                                                                       Related 
                                                                        Notes
                                                              Pages     Pages
                                                              -----  -----------
Incorporated by reference from the 1997 
Annual Report to Shareholders:

Report of the auditors                                          35

Consolidated profit and loss account for each of the 
three years in the period ended December 31, 1997               48     49 to 54

Consolidated cash flow statement for each of the three 
years in the period ended December 31, 1997                     55     56 to 61

Consolidated balance sheet as of December 31, 1997, 1996 
and 1995                                                        62     63 to 75

Accounting policies                                          78 to 79

Summary of differences between UK and US GAAP                   80     81 to 82

Report on Remuneration and Related Matters                   25 to 32


      The consolidated financial statements listed in the above index which are
included in the 1997 Annual Report to Shareholders of Reuters Holdings PLC are
hereby incorporated by reference. With the exception of the pages listed in the
above index and the items incorporated by reference in Items 1, 4, 8, 9, 9A, 10,
11 and 12 of this report, the 1997 Annual Report to Shareholders is not to be
deemed filed as part of this Report.

(b) Exhibits
------------

2.1     Memorandum and Articles of Association of Reuters Group

2.2     Deposit Agreement, dated February 18, 1998 among Reuters Group, Morgan
        Guaranty Trust Company of New York, as depositary, and all holders from
        time to time of American Depositary Receipts issued thereunder

2.3     Syndicated Credit Facility Agreement dated December 4, 1997 among
        Reuters Group, Reuters Investments, Chase Manhattan plc, the banks
        listed therein and Chase Manhattan International Limited

2.4     Consent of Price Waterhouse for incorporation by reference in Forms S-8
        of their report dated February 13, 1998

2.5     Consent of Price Waterhouse for incorporation by reference in Forms F-3
        of their report dated February 13, 1998

4.      The 1997 Annual Report to Shareholders of Reuters Holdings PLC

27      Financial Data Schedule

                                       28
<PAGE>
                                   SIGNATURES

      Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.



                                                REUTERS GROUP PLC
                                                (Registrant)

Dated: March 5, 1998                            By /s/ Robert O. Rowley
                                                   --------------------------
                                                   Robert O. Rowley
                                                   Finance Director

                                       29

<PAGE>
                                 EXHIBIT INDEX
                                 -------------
Exhibit 
Number         Description
------         -----------

  2.1          Memorandum and Articles of Association of Reuters Group

  2.2          Deposit Agreement, dated February 18, 1998 among Reuters Group,
               Morgan Guaranty Trust Company of New York, as depositary, and all
               holders from time to time of American Depositary Receipts issued
               thereunder

  2.3          Syndicated Credit Facility Agreement dated December 4, 1997 among
               Reuters Group, Reuters Investments, Chase Manhattan plc, the
               banks listed therein and Chase Manhattan International Limited

  2.4          Consent of Price Waterhouse for incorporation by reference in
               Forms S-8 of their report dated February 13, 1998

  2.5          Consent of Price Waterhouse for incorporation by reference in
               Forms F-3 of their report dated February 13, 1998

  4.           The 1997 Annual Report to Shareholders of Reuters Holdings PLC

  27           Financial Data Schedule